AFR: Bowen Coking Coal raising $41.5m to fund New Hope purchase


ASX-listed Bowen Coking Coal was running a $41.5 million share placement on Tuesday morning to help pay for coal assets it acquired from New Hope Corporation.

The offer was priced at 20¢ a share, a 13 per cent discount the last close or a 17.8 per cent discount the five-day volume-weighted average price, according to term sheets sent to investors.

Bowen Coking Coal’s assets are in Queensland’s Bowen Basin region. Potential investors were told it would spend $19 million on funding Burton Mine and Lenton Project acquisition from New Hope, $16.6 million to help restart Burton project and the remaining $5.9 million in working capital and offer costs.

Burton, previously owned by New Hope, is a 64Mt large open pit resource and New Lenton is 140Mt open pit resource. Investors were told Burton/Lenton had mining leases, established infrastructure and was targeting 5Mtpa production by 2024. It was mined for 18 years until 2016, and replacement value of its infrastructure would be $300 million, the term sheet said.

The acquisition was expected to complete by March, and a share purchase agreement was signed in December.

Petra Capital was the sole lead manager and the book runner.

Bids were due 4pm Tuesday Sydney time for Australian investors and 6pm for offshore ones.

Bowen Coking Coal last raised in November, to fund another acquisition/restart for Bluff coal mine, which it bought from MACA. The $10 million raise was priced at 16¢ a share.

Source: The Australian Financial Review