Yesterday, leading Australian conglomerate Wesfarmers agreed to sell its 40% interest in the Bengalla Joint Venture (JV) to its JV partner New Hope Corporation for AUS$860 million. On successful completion of the transaction, Wesfarmers expects to report a pre-tax profit on sale of approximately AUS$670 million to AUS$680 million subject to completion adjustments. Wesfarmers will continue to benefit from earnings and cashflow generated from its interest in Bengalla until completion of the transaction.
Bengalla is currently jointly owned by Wesfarmers (40%), New Hope (40%), Taipower (10%) and by Mitsui (10%). The transaction is subject to regulatory approval and pre-emption rights under the Bengalla JV deed.
According to Wesfarmers, the sale of the interest in the Bengalla JV is expected to close in the fourth quarter of 2018. The Bengalla mine supplies domestic and export markets with thermal coal from its opencast mining operation south west of Muswellbrook in the Hunter Valley region of New South Wales (Australia).
It has regulatory approval for up to 15 million tpa ROM capacity. Bengalla’s coal is used for power generation and is exported primarily to customers based in Japan and North Asia. Wesfarmers Managing Director Rob Scott said the agreement to sell Wesfarmers’ interest in Bengalla followed the completion of the sale of the Curragh coal mine to Coronado Coal in March this year and, subject to completion, would finalise the review of the Wesfarmers resources businesses initiated in 2016.
“We believe this agreement with New Hope is in the best interests of our shareholders and ensures a smooth transition in the ownership structure of the Bengalla joint venture,” Scott said.
“Bengalla has made strong returns for Wesfarmers shareholders since our initial interest was acquired in 1991 and it is pleasing the extensive, disciplined and patient review of our coal businesses has resulted in outcomes which reflect the value of these world-class assets”.
Read the article online at: https://www.worldcoal.com/coal/07082018/wesfarmers-to-sell-stake-in-bengalla-jv/