Murchison to merge with Mercantile
One of the last vestiges of the ill-fated $6 billion Oakajee port and rail project is set to disappear from the boards of the ASX.
Murchison Metals, which was in a joint venture with Japan's Mitsubishi to develop the infrastructure project in the State's Mid West, is set to be folded into its major shareholder, the Sir Ron Brierley-led Mercantile Investment Company.
Under the terms of a scheme implementation agreement, Murchison shares, other than those held by Mercantile, will be cancelled with shareholders offered the option to take their payment in cash, Mercantile scrip or a 50/50 combination of cash and scrip.
Assuming all shareholders elect to convert their Murchison shares to Mercantile scrip, the new merged listed investment entity would have a combined assets of $51.9 million and more than 4000 shareholders.
If all Murchison shareholders accept the scrip offer, they will hold about 21 per cent of the merged entity.
Murchison shareholders will vote on the merger plan at a meeting in June.
Murchison was forced to sell its half stake in the Jacks Hills mine and Oakajee Port and Rail Group to Mitsubishi for $325 million back in February 2012 after it was unable to afford rising costs on the project.
In June last year, Mitsubishi raised the white flag on the Oakajee project on a sliding iron ore price and questions over the viability of the plan.
Hopes that Chinese interests might reinvigorate the stalled project have so far come to nought.
Murchison shares were up 0.7 cents, or 16.67 per cent, to 4.9 cents on the news while Mercantile shares were up half a cent, or 3.7 per cent, to 14 cents.
