Bumper pay day for ConsMin after offloading BC Iron stake
The $111 million transaction was completed on Thursday night and has delivered a handsome pay day for ConsMin, which is controlled by Ukrainian billionaire Gennadiy Bogolyubov.
The buyers are unknown at this stage, but BC believes a mix of institutional investors have paid $3.90 per share via a sale process run by Macquarie.
The stock was fetching $4 on Friday afternoon, well below its record high of $4.50 on Monday.
ConsMin was the biggest shareholder in BC for most of its seven-year history, after it vended some Pilbara tenements into the company that listed on the ASX in late 2006.
BC's first days on the ASX saw the stock fetch about 24¢, meaning the value of ConsMin's stake had increased more than 18-fold by the time it hit this week's record high.
ConsMin has also received more than $12 million in dividend flows from BC over the past 13 months, thanks to the miner's consistently strong performance and generous dividend policy.
The success of BC has vindicated ConsMin's decision to fight Hong Kong fund manager Regent Pacific when it sought to take over BC in 2011. BC Iron managing director Morgan Ball said the ease of the selldown showed the high regard in which BC was held.
"The fact Macquarie was able to get away a parcel of that size speaks wonders for us in terms of the institutional view of us," he said.
The exit inevitably raises the question of whether the peak of the BC Iron journey has now passed.
Mr Ball assured shareholders there was a strong chance the 2014 financial year would be better for the company than the previous year's, given its joint venture with Fortescue would export 20 per cent more iron ore this year.
"We have derisked the project and we are very comfortable that we will ship the full 6 million tonnes in full-year 2014," he said.
Frequently Asked Questions about this Article…
ConsMin completed a $111 million sale of its stake in Pilbara exporter BC Iron. The transaction was completed on a Thursday night and was run through a sale process managed by Macquarie.
The exit delivered more than a 16-fold return on ConsMin’s initial investment over about 30 months. In addition to the sale proceeds, ConsMin received more than $12 million in dividend payments from BC Iron over the past 13 months.
The buyers are not publicly identified. BC Iron said it believes a mix of institutional investors bought the parcel at about $3.90 per share through the Macquarie‑run sale process.
BC Iron said the sale price was $3.90 a share. The stock was trading around $4 on the Friday after the sale, below a record high of $4.50 reached earlier that week.
BC Iron listed in late 2006 at roughly 24 cents a share and has since climbed substantially, hitting a record high of $4.50. Its strong operational performance has supported a generous dividend policy.
ConsMin was the biggest shareholder for most of BC Iron’s seven‑year history after vending Pilbara tenements into the company at listing. It also successfully resisted a takeover approach from Hong Kong fund manager Regent Pacific in 2011.
The exit raised questions about a potential peak, but BC Iron’s managing director Morgan Ball said there’s a strong chance FY2014 could be better than the prior year. He pointed to a derisked project and a joint venture with Fortescue that should lift exports.
BC Iron said its joint venture with Fortescue should result in about 20% more iron ore exports this year, and management expressed confidence they will ship the full 6 million tonnes planned for full‑year 2014.
Call 1300 880 160
Start a chat
Schedule a call
