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Class action against OZ Minerals

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OZ Minerals has been threatened with a lawsuit over alleged failures to disclose debt refinancing dating back to 2008 when the company was formed.

The move comes despite OZ having settled two similar disputes in 2011 with a payment of $60 million.

Formed in 2008, OZ was as a merger between mining companies Oxiana and Zinifex.

In 2011 the company settled two shareholder class actions for Oxiana shareholders centred around alleged claims of continuous disclosure obligations relating to debt refinancing deals in 2008.

In that case lawyers argued OZ breached its obligation to disclose debt issues which forced it into a trading halt.

The new claim, led by ACA Lawyers, is focused on the same claims, however ACA is representing Zinifex shareholders.

The new claim is based on alleged failure to disclose that Oxiana's debt was "unfavourably refinanced at the height of the global financial crisis" the week before the merger was agreed.

It argues that if Zinifex shareholders been aware of Oxiana’s true debt position, the merger either would not have been approved by, or alternatively approved on more favourable terms.

The proposed claim will seek compensation for Zinifex shareholders based upon the premium paid by Zinifex shareholder for Oxiana’s “inflatedly priced shares” or a “no transaction” theory of loss which assumes the merger did not proceed.

"We contend the near-term loan maturity put Oxiana at risk of insolvency given the extent of global credit rationing throughout 2008," ACA said.

OZ has vowed to “vigorously defend any proceedings that may be commenced”, The Australian reported.

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