OZL - Oz Minerals

[TheAbyss]

Big issue here is what will the banks do? They hold the future in their hands.

Do they cut their risk, seize the assets and sell them to get their money back or do they play the waiting game?

What do Minmetals do with the banks if they increase the interest rate charges in order for being patient?

So long as the banks agree to new repayment periods etc then all will be ok.

Why cant OZL sell Matarbe? The board do not seem to be able to complete a project of any description which has caused me to take some profits off the table this week as i am becoming a tad edgy on this one.

 

[nizora]

Swan blocks Chinese takeover of OZ mineJamie Freed
March 27, 2009 - 4:46PM
The Federal Treasurer, Wayne Swan, has prohibited China Minmetals from buying the Prominent Hill mine from OZ Minerals, in a move that is likely to scupper the Chinese company's $2.6 billion bid for the company.

Prominent Hill is OZ's most valuable asset, and Mr Swan's ruling that its location in the Woomera Prohibited Area in South Australia means it is too sensitive to be owned by a Chinese state-owned company is likely to leave the OZ board searching for alternative options to avoid administration.

OZ needs to repay or extend the deadline on $1.3 billion of debt due on Tuesday to avoid administration. Now, its options would be appear to be rather limited, short of a last-minute offer from Barrick Gold, BHP Billiton or another mining company

 

[jackson8]

Swan blocks Chinese takeover of OZ mineJamie Freed
March 27, 2009 - 4:46PM
The Federal Treasurer, Wayne Swan, has prohibited China Minmetals from buying the Prominent Hill mine from OZ Minerals, in a move that is likely to scupper the Chinese company's $2.6 billion bid for the company.

Prominent Hill is OZ's most valuable asset, and Mr Swan's ruling that its location in the Woomera Prohibited Area in South Australia means it is too sensitive to be owned by a Chinese state-owned company is likely to leave the OZ board searching for alternative options to avoid administration.

OZ needs to repay or extend the deadline on $1.3 billion of debt due on Tuesday to avoid administration. Now, its options would be appear to be rather limited, short of a last-minute offer from Barrick Gold, BHP Billiton or another mining company

wow who saw that coming
who would have thought about the aspect of the mine being on military ground being a hinderance to the takeover
its the first ive heard of it

 

[gfresh]

full article: http://business.theage.com.au/business/swan-blocks-chinese-takeover-of-oz-mine-20090327-9d1x.html

Politics at it's finest.. I thought Woomera hadn't been used for decades?

I guess there is a small hope for the company to survive as copper prices are picking up from the bottom, but odds can't be too good.

 

[nunthewiser]

"Treasurer Wayne Swan said today the proximity of the company’s Prominent Hill copper and gold mine in South Australia to the government’s Woomera Prohibited Area weapons testing range meant the takeover would breach national security.

But the government has left the door open for negotiation saying it would reconsider the proposal if Prominent Hill was not part of the deal.

Mr Swan said the Woomera Prohibited Area weapons testing range made a unique and sensitive contribution to Australia’s national defence.

He said the Minmetals bid could not be approved if it included Prominent Hill.

Discussions between the Foreign Investment Review Board and Minmetals were continuing in relation to Oz Minerals’ other businesses and assets.

The government said it was willing to consider alternative proposals relating to those other assets and businesses "

http://www.thewest.com.au/default.aspx?MenuID=159&ContentID=132701

 

[magiceye]

This is the biggest load of hypocritical crap I've heard in a long time. It's ok for our dishonourable defence minister Fitzgibbon to accept gifts from some Chinese business woman and not declare them to the parliament, K. Rudd to have secret meetings last week with Chinese officials but not this?? Now they're costing people jobs and their life savings!

 

[Pager]

With its debt refinancing issues and with the takeover being knocked back i would say its know a basket case.

Looks like another client for the administrators next week.

 

[jman2007]

Er...

Isn't this a really bad outcome for the company? Sounds like they FIRB have basically just dusted their hands of these guys and chucked them into the arena with the lions. I wonder why the FIRB need another 90 days?

If the banks don't play along with this, then isn't administration a real risk here?

jman

Well I have to admit the Prominent Hill ruling came straight out of left-field, never would have imagined in my wildest dreams that a missile testing site would have come into the equation.

Unfortunately the most likely outcome from here will be a break-up of the company and a selling-off of its assets. Quite likely that it wont come out of its trading halt imo. A real shock for everyone involved I guess, OZL had a great plan, but was just caught in the wrong place at the wrong time.

jman

 

[UPKA]

I can sense the panic has set in. Those who bought in OZL should've already taken these factors into account already, e.g. failure to get approval from FIRB, or failure to get extension on loans.


here's a good article for a read:
http://www.forexpros.com/news/financial-news/analysis-tough-choices-for-oz-as-minmetals-rescue-misfires-39978

 

[edliw]

If P/H is that important that China cann't have it, dose this mean indirectly that the Gov is going to prop up the finances for Oz. Instead of throwing $900.00 dollars every where, which the effect will last for a couple of weeks, if they put some money into some projects like this , I am sure the benefit would last a lot longer. It's only a Billion dollars which seems to be small change now days

 

[Boggo]

Map below may give you an idea of just how much area the military rent out to any country that wants to rent a rocket or military testing ground.

The SFC to FL999 means Surface to 100,000 feet above sea level.

(click to enlarge)

 

[jman2007]

If P/H is that important that China cann't have it, dose this mean indirectly that the Gov is going to prop up the finances for Oz. Instead of throwing $900.00 dollars every where, which the effect will last for a couple of weeks, if they put some money into some projects like this , I am sure the benefit would last a lot longer. It's only a Billion dollars which seems to be small change now days

It's a nice thought edliw, but very unlikely to eventuate.

Any government that dabbles in the affairs of a publicly-listed company is playing with fire. There is just no way to draw a line in the sand and set any kind of precedent. Would that also mean that BHP's Ravensthorpe Ni mine should be resurrected to save jobs?...or Monarch Gold's Davyhurst operation bailed out by the taxayer too?

Never going to happen.

 

[fighting41]

It should never have got to this stage in the first place. The blame should be laid squarely at the feet of the people who got us into this situation.

 

[sammy84]

This decision has just confirmed to me what poor leader Swan is. Somebody should inform Swan that prominent hill was previously part owned by a US firm. Furthermore, why announce such a decision when OZ minerals is about to seek debt refinancing. This decision will ultimately result in the loss of more jobs and revenue. If the man couldn't handle this decision correctly how is he entrusted to run our economy?

 

[nunthewiser]

It should never have got to this stage in the first place. The blame should be laid squarely at the feet of the people who got us into this situation.

Good post and entirely correct .......... cant blame the guvvermint for the shape that OZL is in , they didnt put it there

 

[sammy84]

Good post and entirely correct .......... cant blame the guvvermint for the shape that OZL is in , they didnt put it there

Hey nun

Whilst on principal you cant blame the government, they still have to face the practicalities that the biggest loser in this decision is Australian jobs, which is the govs responsibility.

Every firm that has been bailed out to date(e.g Citi), or has been allowed a lenient merger (e.g Merrill & BoA) hasn't been due to the fault of the respective governments. However the decisions have had to be made bearing in mind what is in the best Interests for the economy of the country.

Swan is nothing but a bureaucrat. He has been one his whole life. The man has an arts degree and handles our economy.

 

[nunthewiser]

Hey nun

Whilst on principal you cant blame the government, they still have to face the practicalities that the biggest loser in this decision is Australian jobs, which is the govs responsibility.

Every firm that has been bailed out to date(e.g Citi), or has been allowed a lenient merger (e.g Merrill & BoA) hasn't been due to the fault of the respective governments. However the decisions have had to be made bearing in mind what is in the best Interests for the economy of the country.

Swan is nothing but a bureaucrat. He has been one his whole life. The man has an arts degree and handles our economy.

Totally agree re swan .better of giving him the position of arts and farts director........the OZL thing is NOT a bailout it was a full takeover by a forein nation which frankly i agree on for being knocked back ....too many potential ramifications involved

i DO have sympathy for OZL shareholders and know quite a few that will be hurt by this ...... and sincerely hope an AUSTRALIAN shining knight comes striding in before its over

 

[Iron Man]

I bought OZL on a punt to go short then got stopped out when banks extended the loan. Then went long and kept a tight stop, that got stopped out too last week. So the moral of the story is keep risk under control you never know what could happen and in this case who knew about a test site next door?.

 

[johenmo]

i DO have sympathy for OZL shareholders and know quite a few that will be hurt by this ...... and sincerely hope an AUSTRALIAN shining knight comes striding in before its over

I had and sold mid-last week. Thought I'd collect enough to take the family to Maccas before I had nothing left. Got hurt and finally withdrew.

A little bit of something is better than all of nothing has been my philosohpy on quite a few thing.

Not trying to down ramp. Risk is too high for my liking. DYOR.

 

[aleckara]

This baby was too much risk as soon as the FIRB approval was required in order for the deal to go through. As much as I thought they may approve it you can't trade the stock technically or fundamentally anymore. You almost have to flip a coin to predict the decision of one person.

A relative was heavily invested in OZL. I suggested to them to buy put options at $0.5 for 5c per share (only because he was very unwilling to sell). The takeover was offering something like 82c? while the loss was potentially everything from the treasurers decision IMO. Since government is often unpredictable I figured at least limit the downside if you want to hold.

Most countries are being protectionist a little with their resources nowdays and China is a huge culprit. I actually think its Australia's fault - we should never have been in a situation where we have to sell the farm to pay the bills. Every country has an advantage - I saw an article that even China has established an almost monopoly on rare earth metals for electronics.