Turquoise Hill deal to exit Mongolia miner SouthGobi falls through
By Susan Taylor
TORONTO (Reuters) - A deal that would have allowed Canada's Turquoise Hill Resources Ltd (TRQ.TO: Quote) to unload its remaining stake in Mongolian coal miner SouthGobi Resources, a company that was once worth billions of dollars, has fallen through.
Turquoise Hill said on Friday that the agreement with National United Resources Holdings 0254.HK expired on April 30.
The deal's failure marks another setback in Turquoise Hill's effort to sever ties with SouthGobi SGQ.TO, a company hit by a slowing Chinese economy, weaker coal prices, accounting problems and funding woes.
Turquoise Hill, a unit of global miner Rio Tinto (RIO.L: Quote), said it could not complete the transaction with Hong Kong-listed National United Resources 0254.HK for 56.1 million SouthGobi SGQ.TO shares, a 23.3 percent stake, under the terms of the agreement.
The C$12.8 million ($10.5 million) deal was announced in July 2014.
Vancouver-based Turquoise Hill also owns an about 66 percent stake in the massive Oyu Tolgoi copper-gold mine in Mongolia.
"Our focus is Oyu Tolgoi and we are looking at alternatives for divesting our remaining stake in SouthGobi," Turquoise Hill spokesman Tony Shaffer said in an email.
Last week, Turquoise Hill closed a deal with private Chinese company Novel Sunrise Investments Ltd to sell 48.7 million shares in SouthGobi for about C$17 million. Continued...