Chinese Investment in Kagara Approved

9 July 2009 (Last Updated July 9th, 2009 18:30)

A Chinese firm will become the biggest shareholder in Australian diversified miner Kagara, after the Australian Government approved the transaction. Chinese state-owned Guangdong Foreign Trade Group (GFTG) is now free to invest up to 19.9% in copper and zinc miner Kagara, after Australi

A Chinese firm will become the biggest shareholder in Australian diversified miner Kagara, after the Australian Government approved the transaction.

Chinese state-owned Guangdong Foreign Trade Group (GFTG) is now free to invest up to 19.9% in copper and zinc miner Kagara, after Australia’s Foreign Investment Review Board gave the deal the green light.

GTFC will initially buy A$57m-worth Kagara shares at A$0.60 apiece, to gain a 15% stake in the company.

GFTG can increase the stake up to 19.9% by buying additional Kagara shares at A$0.80 apiece by 10 August, subject to shareholder approval.

The initial share purchase increases total funds from capital raising to A$226m and will allow the company to reduce its debt and improve its future funding flexibility, Kagara said in a statement.