Cockatoo Coal Ltd. (Cockatoo) has agreed to sell its 30% interest in Hume Coal Ptd Ltd to POSCO Australia Pty Ltd.
Cockatoo will sell its 30% shareholding in Hume Coal for US$ 9.74 million, as well as the cancellation of POSA’s 134,807,307 shares held in Cockatoo. These shares represent a 13.26% interest in Cockatoo.
The proposed sale will also result in the cancellation of Cockatoo’s management agreement with Hume Coal and termination of all further cash call requirements for Cockatoo to fund the exploration and development of the Hume Project.
Cockatoo has also received a non-binding letter of intent from POSCO for the procurement of 1 million tpa of metallurgical coal from the Baralaba Expansion Project once the expansion has occurred.
Cockatoo originally purchased its 30% interest in Hume Coal from POSA in December 2010. It has subsequently spent US$ 9.74 million to fund its 30% share of exploration and development expenditure of the Hume project.
The proposed sale is expected to take place by August 2013, provided that all terms and conditions have been met.
Completion of the transaction is dependent upon a number of conditions precedent, which include the approval by the treasurer of the Commonwealth of Australia, as well as POSA obtaining all necessary approvals from any relevant Korean Government agencies. An independent report opining on the fairness and reasonableness of the deal must also be completed. The report will be dispatched to all Cockatoo shareholders, who must approve the transaction at a general meeting expected to be held in late July 2013.
Cockatoo’s Managing Director, Mr Andrew Lawson, said, “The sale of Cockatoo’s 30% of Hume represents the continuation of Cockatoo’s strategy to concentrate on Baralaba as our core project and divest non-core assets to generate cash inflows in the near term.”
POSCO’s Managing Director, Soo-Cheol Shin, said, "The purchase by POSA of the remaining 30% interest in Hume Coal reflects POSCO’s desire to focus on a 100% owned operation in preference to holding a broad interest in Cockatoo’s portfolio of projects that POSA’s current shareholding in Cockatoo provided.”
Cockatoo plans now to focus its resources on developing the 3.5 million tpa expansion of the existing operating mine at Baralaba.
Adapted from press release by Samuel Dodson
Read the article online at: https://www.worldcoal.com/coal/31052013/cockatoo_coal_sells_30_stake_in_hume_coal_211/