MB Holding, a large diversified business group in the sultanate, is planning to buy a 15 per cent stake in UCL Resources Ltd, a natural resources company listed on the Australian Securities Exchange (ASX), according to a disclosure by UCL to ASX on Wednesday.
Confirming the development to Muscat Daily, Sushil Srivastava, chief financial officer of MB Holding Company, said that MB Holding has signed a memorandum of understanding (MoU) with UCL to buy a 15 per cent stake in the company.
He said, "We have signed a non-binding MoU with UCL, which is subject to a short due diligence. Once the due diligence is completed we will decide whether to go ahead for the transaction or not. If we decide to buy the stake then as per the MoU UCL will sell off 15 per cent stake for around US$4.5mn in a placement priced at 30 cents per share."
UCL is currently focused on a Sandpiper marine phosphate project located off the coast of Namibia in which it has a 42.5 per cent stake. UCL also has a 24.5 per cent stake in Iran-based Mediabad Company's lead zinc-silver project near Yazd in Central Iran.
Srivastava said that the Sandpiper marine phosphate project in Namibia involves one of the largest phosphate reserves in the world. "This project is very interesting and has a very simple process as there is not much of material handling involved," added Srivastava.
Under the agreement, MB Holdings would also participate in future fund raising for UCL's contribution to the Sandpiper marine phosphate project in Namibia, according to the UCL statement on ASX.
Ian Ross, chairman of UCL, said in a statement filed with the Australian bourse on Wednesday that the MoU will add MB Holding as a new long-term, cornerstone shareholder in UCL.
Ross said, "UCL has been working on funding its share of the development costs for the Sandpiper project.
"This was a significant step forward towards the development of the Sandpiper marine phosphate project."
© Muscat Daily 2012
