Iron ore crash puts pressure on Fortescue
Those likely to look at it as a takeover target include Chinese steel makers and commodities giant Glencore
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Melbourne
AUSTRALIA's Fortescue Metals Group has two stark choices to deal with a crash in the iron ore market and cut its US$9 billion debt pile - sell off stakes in its mines or transport infrastructure, or sell new shares.
Investors say the quickest capital-raising option for the world's No 4 iron ore miner would be a rights issue, although that could lead to the dilution of the one-third stake held by chairman Andrew "Twiggy" Forrest. "There's no question, all of those things, in a challenging environment, get a run," said a person close to the company who asked not to be identified. "You've always got them on the agenda." Fortescue, which has been ramping up output and cutting costs, updates its quarterly production and costs on Thursday, with investors anxious to see if it is burning through its US$1.6 billion in cash as iron ore prices hover around US$50 a tonne.
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