DataRoom AM: Gina cleans up

Roy Hill looks to have secured another round of finance, while the market holds its breath ahead of Qantas' update.

The Gina Rinehart-backed Roy Hill iron ore project is edging closer to becoming a reality, with billions in financing likely to be sewn up next month with a consortium of banks.

Elsewhere, the rumours flow ahead of Qantas Airways’ strategy update today, Westfield Corporation tilts toward a US listing and the Papua New Guinea government sizes up Oil Search.

Gina Rinehart’s Roy Hill iron ore project in Western Australia is nearing a $7.8 billion financing agreement that should ensure mining begins before the end of next year, according to Reuters. Sources close to negotiations told the news service that financial close would be secured in March, with the project – majority owned by Rinehart’s Hancock Prospecting – to receive around $3 billion worth of funding from 14 commercial banks as well as a $600 million line of credit. The development has already secured close to $5 billion from state-run export agencies in South Korea, the US and Japan.

Meanwhile, the site has overcome a hitch with its processing plant contract as major construction partner Samsung C&T has agreed to take on the share of work allotted to the collapsed Forge Group. Forge had signed a $1.47 billion contract to work with Spain’s Duro Felguera on the plant in December before the group entered liquidation this month.

Qantas Airways faces a D-Day of sorts today, with boss Alan Joyce to update the market on the firm’s strategic review after weeks of speculation on asset sales, government guarantees and job cuts. The asset sale plans are hazy – and might remain that way for a while yet – but divestments of terminal leases in Brisbane, Melbourne and Sydney appear to be the favoured option to pay down debt, potentially reaping $800 million.

Oil Search may offer a 10 per cent stake in its own company to the Papua New Guinea government to fund its latest acquisition, according to The Australian Financial Review. The Pacific nation’s government is believed keen to fund the ASX-listed group’s purchase of a stake in the Elk and Antelope gas fields amid fears it won’t be able to repurchase its 14.7 per cent Oil Search stake, which it offloaded to Abu Dhabi-based International Petroleum Investment Co through a five-year loan deal in 2009.

The Lowy family is confidently pressing on with plans to overhaul their Westfield property empire, though the listing plans for the overseas-focussed Westfield Corporation remain up in the air. The smart money is backing a US listing, as similar businesses are more highly valued on the New York Stock Exchange and chairman Frank Lowy has recently purchased a $13 million property in the Big Apple.

UGL has secured a major construction contract for the Ichthys gas project in Darwin. The structural, mechanical and piping construction contract is worth $640 million, with the money to be split through a joint venture arrangement with UK firm Kentz Corporation.

Speculation continues to swirl around the possibility of a counterbid for control of Aurora Oil & Gas, according to the AFR. The company’s stock is trading above the generous $4.10 a share offer from Baytex Energy, hinting that investors are making a small punt for a rival deal, perhaps from JV partner Marathon Oil.

Finally, Mirabela Nickel noteholders have claimed 54.4 per cent of the former market darling as KordaMentha pursues a recapitilisation plan as the miner’s administrator.

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