A nervous wait

OZ Minerals has been dealt a blow by the Foreign Investment Review Board (FIRB), after it decided to extend its review period of Minmetals' proposed $2.6 billion takeover of the company.

OZ Minerals has been dealt a blow by the Foreign Investment Review Board (FIRB), after it decided to extend its review period of Minmetals’ proposed $2.6 billion takeover of the company.

The extension is for a further 90 days beginning today. Most industry expectation pointed to an extension of only 30 days.

Given its considerable debt levels, OZ was hoping for a swift decision from FIRB that would facilitate Minmetals’ takeover.

With a total debt load of $1.3 billion, $1.1 billion due at the end of March, OZ has sought another extension for the refinancing date of its banking facilities until 15 September this year.

OZ Minerals’ debt credit providers have already agreed to an extension until the end of March to give the company time to complete the takeover deal.

In a statement to the Australian Securities Exchange late yesterday, OZ Minerals said that that an immediate determination on the Minmetals deal was in the best interests of the company, its shareholders, employees and all its stakeholders.

If the takeover bid is denied, there is a risk that the company could be forced into voluntary administration, at the likely cost of up to 6000 jobs.

The decision to extend the evaluation comes after FIRB recently extended the review period of the Rio Tinto/Chinalco deal by 90 days and the Fortescue/Valin deal by 30.

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