Flinders stock plummets amid takeover by Russian steelmaker

Shares in Australian iron exploration company Flinders Mines plummeted when a trading halt was lifted following a court injunction filed in Chelyabinsk.

The injunction was filed by a minority shareholder in Russian steelmaker Magnitogorsk Iron & Steel Works over the company’s proposed $554 million takeover of Flinders, according to TheAustralian.com.au.

Shares of Flinders were down 9.09 percent on Tuesday, closing at 22.5 cents. Flinders was the most traded stock by volume yesterday, with almost 49 million shares changing hands over the course of the day.

The court injunction was secured by minority shareholder Elena Egorova, who argued that the proposed acquisition would create operational and financial risks to MMK, and thus adversely affect her investment.

Flinders announced that MMK had filed a motion in the Arbitration Court of Chelyabinsk Region of Russia seeking a discharge of the injunction.

“As a consequence of the injunction, MMK has postponed its decision in relation to the execution of a loan facility agreement proposed to complete the scheme of arrangement,” Flinders said, according to TheAustralian.com.au.

Reuters reported that the Urals court where the injunction was filed has set a preliminary hearing date for April 25 in Chelyabinsk, Russia.

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