Strike hit by market turmoil18th September 2008, 13:00...

Strike hit by market turmoil
18th September 2008, 13:00 WST

Alisher Usmanov

Market turmoil has hit WA coal and iron ore hopeful Strike Resources with a planned $53.4 million capital raising through Russian billionaire Alisher Usmanov now in doubt.

In a statement this morning the group said it had held talks with Mr Usmanov’s investment vehicle Gallagher Holdings regarding the implications of the recent market downturn on the group’s plans to take a 27 per cent stake in the group.

The two-tranche share placement was intended to raise $103 million to advance Strike’s Peruvian iron ore assets.

While the first tranche of the placement has already been completed the fate of the second tranche, worth $53.4 million, now appears unclear.

Although Strike said the parties had agreed “in good faith” to replace share subscription agreement with unsecured convertible notes it also warned that “no binding agreement has been reached between the parties and the company can give no assurance that such an agreement will be reached.”