30th Apr 2015 07:23
LONDON (Alliance News) - Ferrexpo PLC Thursday said it has agreed to sell its entire 15.51% stake in Brazilian iron ore company Ferrous Resources Ltd for USD41.8 million in cash to IEP Ferrous Brazil.
Ferrous Resources has operating assets in the Minas Gerais region of Brazil. In 2014, the company produced 5.6 million tonnes of iron ore. In September, Ferrexpo fully impaired its investment in Ferrous, but Thursday said it expects to reverse the impairment if the deal goes through, meaning the entire cash consideration would be profit.
The impairment came after Ferrous reported a large pretax loss for the year ended September 30, 2014. Of its loss that year, Ferrexpo's share totalled a USD9.7 million loss which contributed to Ferrexpo's USD62.6 million pretax loss in the same year.
Ferrexpo said all the proceeds will be used for general corporate purposes. The deal must be approved by the Brazilian antitrust regulator.
Ferrexpo shares were up 5.7% to 82.25 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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