Fortescue Metals Group Ltd
(ASX:FMG) has denied allegations from its major US shareholder, Leucadia National Corporation, that is has been misleading.
The Australian today reported that Leucadia is suing Andrew Forrest’s company for alleged deceptive behaviour relating to Fortescue’s intention of raising cash with an addition note issue.
The paper reports Leucadia stands to lose US$826 million in expected returns from a US$100 million subordinated loan note, due to the terms of the four year old note promising 4 per cent of revenue after royalties from two of Fortescue’s mines until 2019.
The miner says it has raised the prospect of issuing further notes but has not taken any step to do so, adding that it believes it is able to issue further notes and so will investigate this option.
The miner has argued that it was not given the opportunity to explain its position before Leucadia launched its lawsuit and believes because no notes have been issued the claim for damages is misconceived.
Fortescue Metals Group posted a profit of $626.13 million in fiscal 2009, increasing its profit to US$581 million in fiscal 2010.
