Gloucester outlines acquisition plans

Finance

Publishing Date: 16 May 2011 11:09am GMT
Author: Mining Journal

Gloucester Coal Ltd plans to become one of Australia’s leading coal miners through the acquisition of Donaldson Coal Holdings Ltd and Monash Group.

To help fund the acquisitions, Gloucester said it was undertaking a A$230 million equity raising at A$9/share through a fully underwritten entitlement offer.

Gloucester has agreed to buy Donaldson from its major stakeholder, commodities trader Noble Group Ltd, for A$585 million.

The deal includes A$360 million in new Gloucester share issued to Noble at A$9.75/share, subject to a 12-month escrow period on all shares issued.

Gloucester would take on the remaining A$225 million in debt, including A$186 million to Noble and A$39 million to a third party lender. Donaldson owns one open cut and two underground mines producing thermal coal and semi-soft coking coal 25km west of Newcastle in New South Wales.

The company also owns a 11.6% founding shareholding in NCIG Holdings Pty Ltd, a new coal-export terminal at the Newcastle port.

To acquire Monash, Gloucester has agreed to pay Elemby Holdings and its associated entities A$30 million plus a number of new converting shares (subject to reaching certain milestones).

A completed deal would see Gloucester gain control of the Monash thermal and semi-soft coking coal project in the Hunter Valley region of New South Wales.