Major investor pulls out of Fortescue Metals Group

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One of Fortescue Metals Group’s most influential investors has sold almost all of its stock in the company.

Manhattan-based investment fund Leucadia National has reduced its stake in FMG to around one per cent, selling off 100 million shares worth over $US500 million.

Leucadia said the sale would deliver a yield of more than $US417 million on its original investment.

The move follows previous smaller sales by Leucadia, which sold 92.4 million FMG shares in June last year.

Leucadia provided a lot of FMG’s finance for its early developments to link its Pilbara iron ore mines by rail to Port Hedland.

The investment fund was an early believer in the company’s plans to become Australia’s "third force" in iron ore behind Pilbara rivals BHP Billiton and Rio Tinto.

Bell Potter analyst Fleur Grose told The Australian the sale looked primarily to be a profit taking move.

Grose said there was still plenty of interest in FMG’s operations and the stake was likely to be picked up by other investors quickly.

FMG is continuing its ambitious target to triple production within three years.

It recently said it expected approval for a new berth at Port Hedland within the next month, and it is continuing to repair equipment damaged by Cyclone Heidi earlier this month.

Image: Business Standard

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