Fortescue Metals Group Limited (FMG) said it would hold a shareholder meeting to change its constitution so it could raise more funds to meet expansion plans. Fortescue said it had received a subscription application for preference shares for an aggregate of $140 million.
The issue is conditional on a successful extraordinary meeting of shareholders, to be held 30 September.
The miner said preference shares were just one of the funding options being advanced as part of an overall program to fund the expansion of its operations in the Pilbara region of Western Australia state.
Fortescue also advised it had received product prepayment commitments for US$275 million from five Chinese steel mills for Fortescue's expansion production.
"These funds will be returned in line with product deliveries, amortised over a five year period from the scheduled first delivery date," Fortescue said.
"To date, proceeds of US$68 million have been received with the balance due progressively over the next few months.
The company said proceeds from the prepayments would be used for general project liquidity.
At 1558 AEST, Fortescue was trading 27c higher to $7.67.