Guangdong Foreign Trade Group to buy Kagara stake

Guangdong Foreign Trade Group announced to the Australian stock exchange that it will take a 15% stake in copper and zinc miner Kagara for US$50.7 million, the South China Morning Post reported. Guangdong Trade’s purchase would be part of a larger sale of Kagara shares worth up to US$212.5 million. The shares are expected to be sold at 60 Australian cents (US$0.49) each, 49.37% less than the stock’s last traded price of A$1.185 (US$0.96) on May 29. Guangdong Trade has also agreed to provide Kagara a loan of US$8.1 million and would be entitled to nominate one member to the firm’s board. The deal is the latest in a string of investments in overseas miners by Chinese firms; China MInmetals yesterday had its US$1.39 billion bid for Australian miner OZ Minerals approved by OZ shareholders.