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Fortescue Metals acquires stake in Oil Basins
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Friday, 16 Nov 2012

Business Spectator reported that Fortescue Metals Group Ltd has acquired an 18% cornerstone stake in Oil Basins Ltd, the iron ore miner's first investment in the upstream energy sector.

Oil Basins said that it would use the proceeds from the sale to support future funding requirements at its Canning Basin assets and assist in further expanding its portfolio.

It shares surged on news of the deal. At 1020 AEDT, Oil Basins shares were 41.94% higher at 4.4 cents, against a benchmark index fall of 0.8%.

Oil Basins in a statement to the Australian Securities Exchange said that the Fortescue investment will come through a placement of 120 million new Oil Basin shares.

The placement will be priced at 3.5% share, which represents a 40% premium to Oil Basin's recent seven day volume weighted average price. The placement is expected to raise USD 4.2 million, free of costs.

It sad that "In addition, FMG will be issued 100 million new 9% unlisted options, exercisable on or before 30th June 2016 of which 54 million OBLAI options will be issued immediately and a further 46 million OBLAI options will be subject to an affirmative vote at an Extraordinary General Meeting of OBL Shareholders to be held on or before 15th January 2013."

The investment is significant as it represents the first investment by Fortescue in the upstream energy sector and first investment by the company outside of its core business of iron ore mining and development.

Source - Business Spectator


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