The Australian reported that HONG Kong's Wah Nam has warned it is facing a loss because of the falling value of iron ore assets obtained in its takeover of Brockman Resources.

The Australian's Sarah-Jane Tasker reports said that it expected to record a loss for the 18 months to June 30, largely because of a "significant impairment" of the Brockman assets because of recent unfavourable market conditions.

It is not clear how significant the writedown will be. The West Australian iron ore assets are not in production or close to production, so it will be interesting to see what value Wah Nam put on the Brockman tenements at the time of the deal, and what it sees the value as in today's market.

The complex and drawn-out structure of the takeover deal, which was tainted by controversy from the start, makes it difficult to measure how significant the loss is.

Wah Nam secured 55.3% majority ownership and control of Brockman last year through a controversial hostile scrip offer that was opposed by the Brockman directors.

Source - The Australian

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