Australian pulverised coal injection (PCI) grade producer Cockatoo Coal plans to raise A$125mn ($97.34mn) in new equity capital as part of a refinancing plan. The money will be entirely used to fund the expansion of its Baralaba PCI mine in Queensland to 3.5mn t/yr from 1mn t/yr.
Cockatoo shares have been suspended on the Australian Securities Exchange since 13 November as the debt-heavy coal producer sought fresh financing. Market conditions have made unviable a previous project financing facility from bank ANZ, forcing Cockatoo to cancel it at a cost of A$5.625mn in fees, it said.
PCI prices have fallen by 64pc since the April-June quarter of 2011 and more than 20pc over the past 12 months, Cockatoo said.
The latest fundraising follows the A$408mn secured by Cockatoo through debt and equity in October 2013 when the company had planned to reach full production of Baralaba by 2016.
The new equity will be underwritten by Cockatoo's key investors including Hong Kong-based commodities trading firm Noble Group. Cockatoo and Noble have agreed a new 28.5mn t off-take agreement for 20 years from the Baralaba mine as part of the new funding, Cockatoo said.
Indonesian coal investor Harum Energy, which owned 12pc of Cockatoo before the latest fundraising, is also supporting the share equity placement, along with US private investor Liberty Metals and Mining. Cockatoo's largest shareholder South Korea's SK Networks, with 28.5pc, has given no commitment to support the refinancing. It holds the marketing rights for Baralaba PCI customers in South Korea and Taiwan.
The Baralaba expansion will take place over five years, instead of the three-year period previously budgeted with full capacity targeted in 2018. The expansion was originally estimated at A$328mn, with Cockatoo having spent A$57mn to date, with savings identified of A$76mn. But A$89mn of the planned spending has been deferred and only A$106mn will be spent on the expansion in 2015 and 2016, Cockatoo said.
Cockatoo is also a shareholder in the 27mn t/yr Wiggins Island coal export terminal (Wicet) at Gladstone in Queensland. The Wicet project is more than 98.5pc complete and is scheduled for first shipments in this year's first half.
km/rjd
Send comments to feedback@argusmedia.com
Request more information about Argus' energy and commodity news, data and analysis services.
Copyright © 2015 Argus Media Ltd - www.argusmedia.com - All rights reserved.
