Banpu PCL, Thailand’s biggest coal mining company, reported Wednesday that its shareholders had approved its offer for Australian miner, Centennial Coal Company. Banpu PCL now has the go ahead to undertake its Australian investment pegged at A$2.17 billion. The Thai company has always reiterated its intention for expansion offshore and the shareholder approval confirms its drive for regional growth.
Earlier on, Banpu PCL had reported that its Australian investment would be financed by bonds issue, for about A$678 million. In addition, the company’s chief executive was quoted saying that some part of the bonds will be issued at a later date this year. According to the chief executive, Chanin Vongkusolkit, the company has planned the bond sale to coincide with the tender offer for the Australian miner.
He further said that Banpu is hopeful the tender offer will be concluded by the end of October at the latest or September at the earliest. Banpu PCL currently controls about 19.9% of the Australian miner but in July, the Thai firm decided to up its stake by offering to buy the remaining 80.1% stake that it does not currently have in Centennial. The offer stood at A$6.20 for each share, and the buyout is still pending confirmation from the Foreign Investment Review Board.
Analysts believe Banpu stands to make considerable gains out of this deal. The Australian coal miner has around 400 million tons of coal reserves and the takeover would put these reserves under Banpu, subsequently resulting in positive earnings and even potential upgrades.
However, on its part, the Thai company has said it intends to have Centennial as its footing for further acquisitions in Australia. It is understood that Australia is one of Banpu’s target growth markets amongst others such as Indonesia and South Africa. According to Chanin, part of the revenue to be earned from the Australian acquisition may consolidate in Banpu’s 2010 financial statement if the tender procedure is concluded in time.
However, as it is, Banpu is currently relying on its 2010 forecasts that place revenue at over 58 million baht, and targeted coal sales of about 23 million tons. Banpu’s acquisition comes amidst a host of others in the Australian mining sector with foreign companies being at the helm of the acquisitions. The deal between the two miners contains a bid implementation binder that is inclusive of an A$24 million break.
11 Aug 2010