AFR: Allegiance Coal raising $30m for acquisition


Allegiance Coal Limited is running a $30 million placement via Petra Capital to fund an acquisition.

The raise is split as a two-tranche $25 million placement and a $5 million share purchase plan.

The offer price of 50¢ a share is a 13.8 per cent discount to the last traded price of 58¢ per share, according to term sheets sent to potential investors.

Allegiance will use the funds to acquire premium mid-vol coking coal assets at Short Creek Mine in Birmingham, Alabama for US$4.4 million in cash and
US$11.5 million in a reclamation bond.

It will use the remaining $3.2 million from the $25 million placement for working capital.

Allegiance focuses steelmaking coal projects that are either advanced or near production or producing in countries with low political risk. Its projects include New Elk Mine in Colorado and Tenas Project in British Columbia.

Petra Capital was calling for bids by 4pm.

Source: The Australian Financial Review