Debt Fears Dig into Fortescue Mining Share Prices

Fortescue Metals (ASX:FMG) is seeing debt fears affect its share price on the ASX stockmarket. The shares closed yesterday at a three year low, down 48 cents to $2.99.

• Share prices fell as reports hit the market about Fortescue requesting waiver for all debt covenants for the next 12 months.
• After ASX stockmarket closed, FMG released an announcement:
• "Fortescue is in the process of talking to its lenders about potential waivers in the events that covenants are put under pressure by extended volatility in the iron ore market."
• "The company has a supportive banking group and this is a prudent measure that has been taken well in advance of the next reporting date and in response to market volatility."
• Fortescue has gross debt of around $9 billion.
• If Fortescue were to breach its loan agreements (debt covenants), it would mean all debt would be payable immediately.
• Yesterday marks the biggest single day decline in share price for FMG.
• The share price fall cut the value of Chairman Andrew Forrest's holdings of 32 percent of the company by about $500 million. Andrew Forrest's stock holdings peaked in 2008 where his stocks were valued at $12 billion. Today it has fallen to about $3 billion.