Mineral Resources to acquire Resource Development Group assets
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The news: Mineral Resources has executed a binding asset and share sale agreement with the administrators of collapsed garnet miner Resource Development Group (RDG).
RDG was led by Andrew Ellison who is the brother of MinRes managing director Chris Ellison.
The context: Under the agreement, MinRes will acquire RDG assets, including the Lucky Bay garnet mine in Western Australia, following creditor approval of MinRes' Deed of Company Arrangement proposal.
MinRes said it will be assessing options to best realise value from the assets for the company's shareholders.
It noted that "all decisions relating to RDG and the acquisition have been undertaken by the MinRes board, with managing director Chris Ellison and MinRes nominees on the RDG board not involved in deliberations".
RDG had become wholly reliant on MinRes to maintain solvency, burning through almost all of a $135 million loan by December and remaining cash-flow negative, according to a report to creditors by administrators McGrath Nicol.
What they said: "The board and I sought to ensure that MinRes shareholders could realise some value from their investment, and that there were no perceived conflicts in our decisions on RDG's future," said MinRes chair Malcolm Bundey.
"I want to thank RDG's employees to continuing to operate safely and productively during this process."
The source: ASX
