Debt-laden Australian miner OZ Minerals announced on Tuesday it had signed a US$1.21 billion takeover deal with China Minmetals which would leave it with Australian $500 million (US$366 million) in cash.

The revised bid is well below Minmetals' original US$1.7 billion offer, and excludes the flagship Prominent Hill mine and other "sensitive assets".

"Once implemented this transaction will provide a complete solution to our financing issues and see shareholders retain their OZ Minerals shares and therefore exposure to the Prominent Hill operation and its long-term growth profile," said Andrew Michelmore, OZ's chief executive officer.

OZ said it expected the deal, which is yet to be approved by Chinese regulators and Australia's foreign investments review board as well as its shareholders, to go through in late June.

To ensure a smooth acquisition, OZ pledged not to voluntarily make contacts with other third parties that also intend to bid for it, and in turn Minmetals agreed to pay OZ some US$12 million in compensation if the deal eventually collapses, China Securities Journal reported on Wednesday.

Australian authorities turned down Minmetals' takeover bid for OZ on March 27, citing national security concerns. The current agreement was based on a revised proposal produced by Minmetals on April 1.

(chinadaily.com.cn April 16, 2009)