According to investment banking sources on October 15, the world's No. 5 steel company decided to sell off its shares in Sandfire Resources, a diversified Australian resource company, and has selected Bank of America as the principal underwriter of the deal. POSCO is a second largest shareholder in the company with a 15.52-percent (23.7 million shares) stake.

 

After taking the equity stake in May 2008 by paying US$35.2 million, it has dispatched an executive to participate in the company's management affairs. The stake is attached with "offtake" rights for POSCO to purchase copper ore produced by Sandfire at a discount of 7.5 percent for every $100-million shipment for up to 30 percent of Sandfire output.

 

The most likely candidate to take over the stake was LG International, a trading arm of LG Group. But POSCO recently shifted its strategy to sell it on the open market by selecting an underwriter.