A deal to sell 100 percent of Australia’s Flinders Mines iron ore company to Russian steel giant MMK for $537 million was suspended due to a legal action by an MMK minority shareholders, the Russian company said on Tuesday.
A Russian commercial court blocked the deal after a minority shareholder filed a suit, on the grounds the transaction involves certain financial and operation risks for the works and would affect the return on his investments.
MMK “regards the plaintiff’s action as ungrounded,” the company said in a statement.
Flinders Mines shareholders approved the deal on March 30.
“MMK has notified Flinders Mines Limited of the court’s order. The parties are currently in the process of jointly assessing the above circumstances and their probable consequences,” MMK said.
The Russian steel giant made the $537 million takeover offer to Flinders Mines in November 2011.
MMK plans to borrow up to $600 million, part of which might be used to finance the deal, MMK told Prime news agency in March.