Fortescue says it now has enough capital

(AAP) - Fortescue Metals Group Ltd has called off plans to raise further capital after its $558 million equity investment deal with a leading Chinese steel maker, saying it now has enough funds.

Fortescue on Tuesday confirmed Hunan Valin Iron and Steel Company Ltd would take a
strategic stake of up to 16.5 per cent in the iron ore miner.
It would 225 million new Fortescue shares at a discount $2.48 per share and acquire
some of the miner's scrip from existing shareholder and US hedge fund Harbinger
Capital.
Fortescue on Wednesday evening requested that its trading halt be lifted.
This happened just hours after it had earlier requested a continuation of the
trading halt entered into on Monday to consider what it said were additional capital
raising initiatives.
The iron ore miner was expected to provide further details on talks with sovereign
wealth fund China Investment Corp regarding a hybrid security raising, reported to
be for more than $1 billion.
It also said recently that it was in discussions with multinational resources giant
Anglo American plc.
"Following the success in signing an agreement for a capital raising with Hunan
Valin Iron and Steel Company Ltd and, taking into account the company's strengthened
balance sheet and continued strong revenue from iron ore sales, Fortescue's board
decided today to not pursue those opportunities," the miner said in a statement
after market close on Wednesday.
Capital raising initiatives that Fortescue said it was considering this week
included an institutional placement that observers say could raise $500 million,
joint ventures and direct investment.
Analysts recently said Fortescue could seek a total of $3 billion from its capital
raising initiatives to fund its ambitious expansion program.
It is unknown whether Fortescue has further scaled back its expansion plans after
having done so several times last year.
Valin on Wednesday secured 275 million of the 444 million Fortescue shares held by
Harbinger, bringing the state-backed entity's total investment in Fortescue to $1.2
billion and delivering it a stake of 9.79 per cent.
The share subscription agreement is subject to conditions including approval by ASX
Ltd and the Foreign Investment Review Board.
After Fortescue's new shares are issued, Harbinger's remaining interest will be
diluted to 5.5 per cent.
Fortescue chief executive Andrew Forrest has reportedly said Harbinger would hold on
to its remaining stake until a "recommended" takeover of the iron ore miner.
Shares in Fortescue last traded at $2.83.