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Comment (FORTESCUE Metals Group, the iron ore producer controlled by Australia's richest man Andrew Forrest, plans to sell preference shares for the first time to fund expansion.
The company will ask shareholders at a meeting on September 30 to vote to change its constitution to allow the sale of the shares, the Perth-based company said in a statement. It did not say how many preference shares it proposed to sell. They will pay a yield of 9 per cent and have a term of 8.5 years.
Fortescue wants to almost triple output to feed rising demand from steel mills in China and benefit from record prices. The first expansion stage to 120 million metric tonnes a year may cost $3.9 billion, Patersons Securities Ltd's Alex Passmore said.
"The preference shares are a small step in the overall financing," said Mr Passmore, head of metals and mining research at Patersons. "There are a lot of people in the US who would like a 9 per cent coupon rate at the moment."
Fortescue rose as ...
