Fortescue Halted in Sydney Ahead of Deal Completion

By Rebecca Keenan

Aug. 13 (Bloomberg) -- Fortescue Metals Group Ltd., Australia’s third biggest producer of iron ore, is completing a commercial negotiation and asked for shares to be halted in Sydney trading until next week.

Trading will be suspended to Aug. 17 when it expects to release a document regarding the negotiation, the Perth-based company said a statement to the Australian stock exchange. It didn’t provide details.

The company, run by Andrew Forrest, said yesterday it is reviewing financing options for planned expansions of its mine, port and rail operations in Western Australia. Fortescue is in talks with China Investment Corp. to sell convertible bonds worth $1 billion, Reuters reported this week, citing two unidentified people familiar with the deal.

Fortescue may need between $3 billion and $4 billion to proceed with plans to almost double output, Hunan Valin Iron & Steel Group, its second-largest shareholder, said in May. The mill in April put planned expansions on hold amid a cash squeeze.

Fortescue rose 2.3 percent to A$4.45 on the Australian stock exchange before the trading halt. It has more than doubled this year.

CIC, as China’s $200 billion sovereign wealth fund is known, is in talks with Fortescue to invest about $3 billion in the company, three people familiar with the deal said in February. Talks with CIC were continuing, director Chris Catlow said in March.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net;