BHP Group PLC Divestment of BHP Mitsui Coal interest (5752R)
November 08 2021 - 1:00AM
UK Regulatory
TIDMBHP
RNS Number : 5752R
BHP Group PLC
08 November 2021
NEWS RELEASE
Release Time IMMEDIATE
Date 8 November 2021
Release number 26/21
BHP announces divestment of BMC interest
BHP today announced it has signed a Share Sale and Purchase
Agreement to divest its 80 per cent interest in BHP Mitsui Coal
(BMC), an operated metallurgical coal joint venture in
Queensland.
Stanmore SMC Holdings Pty Ltd, a wholly owned subsidiary of
Stanmore Resources Limited (Stanmore Resources), has agreed to
acquire 100 per cent of the shares in Dampier Coal (Queensland) Pty
Ltd from BHP Minerals Pty Ltd, the subsidiary which holds BHP's
interest in BMC, for cash consideration of up to US$1.35
billion.
The purchase price comprises US$1.1 billion cash on completion,
US$100 million in cash six months after completion and the
potential for up to US$150 million in a price-linked earnout
payable in the 2024 calendar year. Excluding the price-linked
earnout, this represents an Enterprise Value/EBITDA multiple of
6.9x(1) .
The sale is subject to the satisfaction of certain conditions,
including customary competition and regulatory approvals. This
includes approval from the Foreign Investment Review Board.
Stanmore Resources has agreed to a break fee payable where certain
conditions are not satisfied.
Stanmore Resources would assume economic and operating control
of BMC on completion of the sale, including its share of all
current and future liabilities of BMC subject to certain limited
exceptions. Completion is expected to occur in the middle of the
2022 calendar year.
BHP will continue to operate BMC until completion and work
closely with Stanmore Resources to ensure a successful transition
of ownership. BHP will provide certain transitional services to
Stanmore Resources for a short period of time after completion.
BHP's President Minerals Australia Edgar Basto said: "This
transaction is consistent with BHP's strategy, delivers value for
our company and shareholders and provides certainty for BMC's
workforce and the local community.
"As the world decarbonises, BHP is sharpening its focus on
producing higher quality metallurgical coal sought after by global
steelmakers to help increase efficiency and lower emissions.
"South Walker Creek and Poitrel are well-run assets that have
been an important part of our portfolio for many years and we are
grateful for their contribution to BHP.
"Under this agreement, BMC will transition to Stanmore
Resources, an ASX-listed company that has established relationships
with Traditional Owners and strong engagement with their workforce
and local communities.
"Stanmore Resources share our focus on safety performance and
culture and support Australia's commitments under the Paris
Agreement."
Net proceeds will be incorporated into and evaluated in
accordance with our capital allocation framework to determine the
appropriate manner to maximise value to shareholders via future
dividends, share buybacks or combination of both.
Stanmore Resources is an Australian Securities Exchange listed
business with operations in Queensland's Bowen Basin and has
committed to oversee and operate BMC in compliance with industry
best practice in relation to safety and environmental performance,
as well as regulatory, community and workforce engagement.
Golden Energy and Resources Limited, a Singapore Exchange listed
company and Stanmore Resources' major shareholder, guarantees
Stanmore Resources' obligations to pay the purchase price and any
break fee obligations to BHP up to US$600 million.
The review process for New South Wales Energy Coal is
progressing, in line with the two-year timeframe announced in
August 2020. BHP remains open to all options and continues
consultation with relevant stakeholders.
(1) Based on an unaudited EBITDA of US$174 million (80% basis)
for the 12 months to 30 September 2021.
About BMC
BHP Mitsui Coal (BMC) comprises the Poitrel and South Walker
Creek operations, Red Mountain Infrastructure and the Wards Well
development in Queensland, Australia. BHP Group Limited operates
BMC as part of an 80:20 joint venture with Mitsui.
Further information on BHP can be found at: bhp.com
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
Media Relations Investor Relations
Email: media.relations@bhp.com Email: investor.relations@bhp.com
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