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Cockatoo Coal update

World Coal,

Cockatoo Coal Limited has a released a statement announcing that it plans to raise AU$ 408 million to expand its Baralaba mine in Queensland, repay debt and fund a takeover offer for Blackwood Corporation.

Funding solution

The Australian coal producer will issue new shares to raise AU$ 153 million, and has also secured an AU$ 255 million finance facility from ANZ. This bank facility will fund a proposed acquisition of Blackwood Corporation, which holds exploration licences throughout central Queensland.

The proceeds of Cockatoo Coal’s equity raising would allow the company to repay a AU$ 95 million loan facility from KEB Australia, and expand its Baralaba project, where work is on track to meet its stage 1 timetable.

The company has also lined up funds from three Asian firms – SK Networks, Noble Group and Harum Energy - for the AU$ 286 million Baralaba coal mine expansion, in a sign of confidence in long-term demand for coal being used in steel mills.

Blackwood takeover

Cockatoo has entered into a takeover agreement to acquire Queensland coal company Blackwood Corporation.

The company will offer two of its shares for every one Blackwood share, and Blackwood’s independent directors have agreed to recommend the offer to their shareholders.

Blackwood’s major shareholder, Noble Group (51.2%) has indicated its intention to monetise its stake in Blackwood, comprising of more than 94 million Blackwood shares, by accepting the offer, subject to an independent experts report.

The Cockatoo Blackwood merger would be a leading independent Australian metallurgical coal producer with a significant development portfolio and potential to expand capacity to 3.5 million tpa.

Key conditions to the offer include successful completion of Cockatoo's announced capital raising and a 52.1% minimum acceptance condition.

Blackwood is currently focused on coal in Queensland, and has tenure of over 5500 km2 in recognised coal basins including the Bowen, Galilee and Surat Basins.

Edited from various sources by Katie Woodward

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