Chinese miner CNMC's stake sale fails to win support from unit's shareholders

[BEIJING] A unit of state-owned China Nonferrous Metal Mining Group Co (CNMC) said on Saturday a proposal for it to acquire shares in an affiliate with African copper and cobalt assets had not received enough support from shareholders.

China Nonferrous Metal Industry's Foreign Engineering and Construction Co, known as NFC, had planned to buy CNMC's 74.52 per cent stake in China Nonferrous Mining Corp Ltd , which has mines in Zambia and the Democratic Republic of Congo, for 7.36 billion yuan (S$1.48 billion) via a share placement.

But at a NFC shareholder meeting on Friday, the proposal was backed by less than 55 per cent of votes from small- and medium-sized shareholders in attendance, according to a filing to the Shenzhen Stock Exchange, meaning it fell short of the two-thirds majority required.

The outcome is a blow to CNMC's hopes of gaining further control over NFC, of which it holds 33.75 per cent, because the share placement would have almost doubled its overall direct and indirect interests in the contractor.

It was not immediately clear why some shareholders voted against the proposal or whether it would be amended.

Those who opposed it included Wanxiang Resources, which holds a 4.14 per cent stake in NFC,and China Mining International Investment Co on 3.11 per cent, the filing showed.

NFC last month posted a net loss of 1.1 billion yuan for 2019, compared with a profit of 119.7 million yuan a year earlier.

REUTERS