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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (32233)	2/4/2009 9:18:41 PM
From: LoneClone	Read Replies (1) \| Respond to of 195938

CMB, Fortescue Metals in ships-for-shares deal mining-journal.com Publishing Date 04 Feb 2009 11:44am GMT Author Mining Journal Belgian dry shipper CMB said it would tie up with Australia's Fortescue Metals Group, trading a new shipping deal for US$50 million in shares in the struggling Perth-based iron ore miner. The move illustrates a new strategy for dry shippers facing cancelled contracts in the global downturn. The sector has seen a near-collapse in recent months due to excess capacity and weaker demand for coal and iron ore, particularly from China. Through the partnership, Fortescue Metals will charter three large Capesize ships from CMB's Bocimar unit for 10 years, in return for US$28 million in Fortescue Metals shares based on their market value on Dec. 31, 2009. The deal also gives Bocimar US$22 million in Fortescue Metals shares in exchange for letting Fortescue -- which stock has plunged more than 80% since June -- cancel a five-year and a 10-year shipping contract signed in February 2008. That US$22 million in shares will be valued according to Fortescue Metals' A$1.93/sh closing price on Dec. 31, 2008. In a preliminary earnings statement last week, CMB booked a €35 million euro (US$45.6 million) writeoff on its share portfolio due to exposure to financial group Fortis and Fortescue Metals. CMB was enthusiastic about the partnership. "We indeed think that Fortescue Metals is a good stock," said CMB Financial Controller Frank Geerts. "We consider the current deal on the table a very good one." (Reuters, Feb 4)