New World takes a 25% Ferrexpo stake

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It said it has taken a 25% stake in Ferrexpo, the Ukrainian iron-ore producer whose coruscating share-price rise earlier this year took it into the FTSE 100, but whose shares have since burnt out in value.

Today's acquisition represents an opportunistic bit of deal-doing by Czech tycoon Zdenek Bakala and mining veteran Mike Salamon, whom Bakala brought in to run NWR.

Bakala, who created NWR after buying state-owned coalmining assets off the Czech government on the cheap earlier this decade, snapped up the near-21% of Ferrexpo owned by Ukrainian magnate Kostyantin Zhevago a fortnight ago after the Ukrainian was forced into the sale by his bankers. Bakala's RPG Industries, the controlling shareholder of NWR, has since been buying more shares in Ferrexpo, and today said the stake now amounting to 25% of Ferrexpo had been acquired by NWR at 86p a share, a knockdown £126 million.

"This was a unique buying opportunity but also a unique opportunity to buy access to a tier one iron-mining company, which is extremely complementary to us in terms of customers in the steel industry," said Salamon.

The NWR executive chairman expects to sign an alliance with Ferrexpo in which each company will put members on the other's board.