Regent no longer welded to BC Iron
A DAY after hitting the highest share price in its six-year history, BC Iron has been rocked by confirmation that its second-biggest shareholder has begun selling down its 20 per cent stake.
Hong Kong investor Regent Pacific has confirmed it will ask its shareholders for permission to sell its $82 million stake in BC Iron.
While there is no guarantee the stake will be sold, Regent Pacific shareholders will vote in January to give their company a "mandate" to start disposing of its BC Iron shares.
The move comes just 18 months after Regent tried to take over the Pilbara junior, only to be thwarted by BC Iron's other major shareholder, Consolidated Minerals.
The first hints of Regent's departure came when it chose not to participate in a share-purchase plan announced by BC Iron earlier this month, and its exit from the stock now appears imminent.
In a statement to the Hong Kong stock exchange, Regent said now was the right time to exit the stock given its strong value on the back of a good year and a recent deal with Fortescue Metals.
Regent stressed it had not begun the process of finding a buyer for its stake.
"The company is not currently engaged in any discussion with any party to dispose of its holding in BCI and neither does the company have any current intention to dispose of its BCI shares within any particular time frame," Regent said.
"Whether and when the company will embark on such future disposal or disposals will depend on a number of factors, including the prevailing market prices and conditions at the relevant time or times."
Regent's Jamie Gibson resigned from the BC Iron board on the back of the announcement.
The news ends a remarkable winning streak for BC Iron, which has thrived during an otherwise turbulent year for iron ore stocks.
BC Iron was set to be the only iron ore pure-play to finish 2012 with a higher share price than it started the year, until Fortescue shares started an amazing spurt on December 5.
Even allowing for Fortescue's recent rise, BC Iron has dramatically outperformed the rest of the iron ore sector in 2012 after hitting all its targets, surprising the market with a bigger than expected dividend, and doing a value accretive deal with Fortescue to secure a bigger share of iron ore exports.
BC Iron shares hit a record high of $3.42 on Tuesday, but slid 12¢ to $3.30 on Wednesday after the Regent decision was announced.
BC Iron stressed that Regent ultimately might choose not to sell its shares and chairman Tony Kiernan said the two companies had enjoyed a solid partnership.
"I would like to acknowledge the considerable support Regent Pacific has provided to BC Iron over the years, having taking its initial holding in the company some years ago," he said.
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