Guess Who Made $500 Million in 2 Minutes?

SYDNEY -- Andrew "Twiggy" Forrest's paper fortune ballooned by $500 million this morning, after Fortescue's share price surged, jumping 51 cents within the first 2 minutes of trading.

The company has secured a credit facility of up to US$4.5 billion that will be used to refinance all existing bank facilities and provide Fortescue with additional liquidity. As the owner of more than 1 billion of Fortescue Metals Group (ASX: FMG.AX) shares, representing 32% of the company, Twiggy's fortunes are closely tied to the company he founded. This could be the turnaround the company needs, while the spot iron ore price remains volatile.

In more good news, the iron ore price posted its second day of gains overnight, rising to US$105 a tonne. Although it's still volatile, Fortescue, Rio Tinto (ASX: RIO.AX), Atlas Iron Limited (ASX: AGO.AX) and Mount Gibson Iron (ASX: MGX.AX) will be watching the price on a daily basis.

Fortescue is now out of the woods from a debt perspective, given the earliest it has to repay any debts is November 2015. Previously, it had US$1.5 billion due to be repaid in December 2013. The news should make it easier for Twiggy to sleep at night, and will also give reassurance to other miners.

Last week, Fortescue had asked its lenders to waive all covenants on its debt for 12 months, as the low iron ore price could have seen the miner breach those debt covenants in December this year.

If you're in the market for some high-yielding ASX shares, look no further than our report, "Secure Your Future with 3 Rock-Solid Dividend Stocks." In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favorite income ideas. But hurry -- the report is free for only a limited time.

More reading:

Motley Fool writer/analyst Mike King doesn't own shares in any company mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, while it's still available. This article contains general investment advice only (under AFSL 400691). Authorized by Bruce Jackson.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2024777, ~/Articles/ArticleHandler.aspx, 10/28/2016 10:14:28 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,209.01 39.33 0.22%
S&P 500 2,133.41 0.37 0.02%
NASD 5,218.65 2.68 0.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes