Sanjeev Gupta’s Havilah bid stymied by shock vote

Perry Williams
Senior Business Writer

Australian Business

12 September 20019

Billionaire Sanjeev Gupta has been forced to abandon a $100 million investment in Adelaide iron ore and copper miner Havilah Resources after one of the junior company’s directors and major shareholder shocked the board by voting against the deal.

The British industrialist, who rescued South Australia’s Whyalla steelworks from administration, had proposed to plough $100m into Havilah in a move giving his GFG Alliance arm a 51 per cent stake in the company.

While Havilah co-founder Bob Johnson had publicly opposed the tie-up, his fellow founder Chris Giles surprised the company by killing off the transaction on Thursday after voting his 19.2 per cent shareholding against the deal.

Mr Gupta’s GFG will look to recover from Havilah and Dr Giles costs incurred since May 1, when it announced the capital injection. GFG is yet to calculate the amount involved, but said the conduct of Dr Giles was inconsistent with his original support for the deal.

“GFG Alliance is disappointed with the outcome of the shareholder vote held today by Havilah Resources turning down the proposed arrangement with SIMEC Mining, a member of the GFG Alliance,” the company said in a statement.

“Given the initial unanimous support of the Havilah Board, GFG was looking forward to a long and close working relationship with Havilah, bringing substantial and sustained value to all stakeholders for generations to come.”

Business tycoon Mr Gupta said GFG would consider alternative options for ore and copper development “as part of our long-term ambitions for a substantial industrial future for Whyalla, including extensions to SIMEC Mining’s existing operations”.

Havilah’s chairman Mark Stewart said it was a significant setback for the miner’s ambitions.

“My view is that the founding shareholders have been firmly in control of Havilah since it was listed and were not prepared to lose their control even, though the proposed deal was probably a once in a lifetime opportunity to turn Havilah into a mid-tier miner,” Mr Stewart said. “To say we are disappointed is a complete understatement.”

Havilah’s chairman Mark Stewart said it was a significant setback for the miner’s ambitions.

“My view is that the founding shareholders have been firmly in control of Havilah since it was listed and were not prepared to lose their control even, though the proposed deal was probably a once in a lifetime opportunity to turn Havilah into a mid-tier miner,” Mr Stewart said. “To say we are disappointed is a complete understatement.”