UPDATE: Gloucester Coal Seeks To Raise Around A$300 Million-Sources
May 13 2011 - 3:25AM
Dow Jones News
Australian coal miner Gloucester Coal Ltd. (GCL.AU) hopes to
raise around 300 million Australian dollars (US$320 million) from
an equity raising accompanying its A$600 million-plus bid for
privately-owned Donaldson Coal Ltd., two people familiar with the
matter said Friday.
Still, the raising could fall short of that mark, one person
familiar with the situation said. Some investors have shown
skepticism about the merits of the deal, which will switch
Gloucester from a former strict focus on coking coal to a broader
range of products.
A source close to the transaction said that the deal was now
expected to close by Monday morning, but could not go ahead if
Gloucester's independent directors were not convinced of the
raising price.
"They will only do it at the right price. Otherwise they won't
go ahead with the transaction," the person said.
The deal is part of Hong Kong-based commodities trader Noble
Group Ltd.'s (N21.SG) long-standing attempts to build a significant
presence in the Australian listed coal mining sector. Australia,
the world's largest exporter of coal, is experiencing booming
demand due to voracious energy demand from China's and India's
industrialising economies and an expected medium-term rise in
demand from Japan as a result of lower usage of nuclear power
following the Fukushima Daiichi nuclear accident.
Gloucester went into a trading halt Monday pending the
announcement of two acquisitions and a capital raising, which has
since been extended twice. Citigroup Inc. (C) and UBS AG (UBS) are
leading the raising.
Gloucester is looking to acquire Donaldson, which operates three
thermal coal mines and has two mining leases in the Hunter Valley
coal region in New South Wales state; and Ellemby, a company with
historic links to Donaldson which holds two more mining leases
close to Cessnock in the Hunter Valley.
The deal would also give Gloucester a prized stake in the
Newcastle Coal Infrastructure Group, a company dominated by BHP
Billiton Ltd. (BHP) which operates one of two terminals at
Newcastle, the world's largest coal export port.
A stake in one of the two terminal operators is seen as a vital
element of developing coal in the Hunter Valley, which is
constrained by its lack of sufficient rail and port capacity.
"The current management believe this is a cracker of a
transaction that's encouraging in terms of diversity, in terms of
moving to multiple assets, multiple geographies and getting
infrastructure," the source close to the transaction said.
Noble wholly-owns Donaldson and also has a controlling stake in
Gloucester, and interests associated with Gloucester's chief
executive Brendan McPherson own 20% of Ellemby.
Two of Gloucester's six-member board are senior Noble
executives, and chief executive Brendan McPherson and two of the
board's independent directors are former directors of
Donaldson.
-By David Fickling, Dow Jones Newswires; +61 2 8272 4689;
david.fickling@dowjones.com
Gloucester Coal (ASX:GCL)
Historical Stock Chart
From May 2024 to Jun 2024
Gloucester Coal (ASX:GCL)
Historical Stock Chart
From Jun 2023 to Jun 2024