Gordon Brothers Snaps Up Cliffs Assets


Originally published in The Australian Financial Review

American miner Cliffs Natural Resources' retreat from the Australian iron ore market is one step closer, after cutting a deal to sell all of its mining equipment.

Street Talk understands Cliffs has finalised a deal to sell the equipment to global investment and asset advisory firm Gordon Brothers, which set up an Australian office early last year.

It is understood the deal has seen Gordon Brothers take control off Cliffs' 300-odd major assets, which were purchased from the miner's Koolyanobbing iron ore mine in Western Australia.

Gordon Brothers is expected to seek to offload the equipment to other miners in the near future.

It is believed to be among a handful of deals Gordon Brothers has done in Australia. The first was debt funding for the rebadged McAleese Transport, renamed Rivet after emerging from administration.

Gordon Brothers managing director Matt Aubrey declined to comment on the Cliffs transaction but stressed the firm was stepping up its presence in Australia. "Using our industry and asset expertise we are prepared to take risk to provide liquidity to companies, whether by buying or financing assets, to support growth or the restructure of businesses," he told Street Talk.

"With the exit of asset-backed lenders like GE and curtailment of traditional forms of finance and liquidity in certain sectors and situations, we think the entry of Gordon Brothers to Australia has been timed perfectly."

Cliffs announced earlier this year it was likely to retreat from the Australian iron ore market, after unveiling a loss for the six months to December 31.