Indian conglomerate Jindal Group is considering a last-minute move to acquire the debt-ridden UK firm London Mining, a media report said today.
The company has been battling big debts, crashing iron-ore prices and the ebola outbreak in Africa, where it operates a mine.
Its shares closed last week at just four pence after it said it was in talks with a strategic partner, but warned any deal could virtually wipe out investors, The Sunday Times said.
A rescue would be likely to require lenders to accept big losses as well, the report said.
London Mining operates a small mine in Sierra Leone producing high grade iron-ore but is expensive to run.
Sierra Leone is one of the worst-affected African nations by the ebola pandemic.
It has made matters worse for business, with cargo ships charging an extra USD 2 a tonne for docking in Freetown, Sierra Leone’s capital.
A takeover by Jindal, whose operations span cement to oil and steel production, could involve “African Minerals,” the newspaper said without clearly identifying the Indian firm.
The London-listed miner founded by tycoon Frank Timis runs a bigger operation nearby.
Its shares have also been hammered.
Last week it hired Standard Chartered, London Mining’s biggest lender, to arrange USD 500 million in debt to see it through.
African Minerals owns a low-cost rail line and port that would allow London Mining to slash its delivery costs.
Jindal is reported to have approached African Mining for an alliance.