Australian Pacific raises concerns around Tetra/Javelin offer
PERTH (miningweekly.com) – Takeover target Australian Pacific Coal has called in the help of a third-party financial adviser to assist the company in an independent assessment of proposals, after raising some concern around the most recent offer from Tetra Resources and Javelin Private Capital.
Australian Pacific’s major shareholder and creditor Trepang Services recently threw its support behind the Tetra/Javelin bid, which is proposing the formation of a joint venture (JV) under which Tetra would hold a 40% interest and Australian Pacific Coal would hold a 60% interest over the Dartbrook coal project, in New South Wales.
The proposal also includes a marketing agreement between Javelin and the Dartbrook JV participants, and a $65-million pre-pay loan agreement between Javelin and the JV participants.
Australian Pacific on Monday pointed out Trepang’s support to a moratorium on debt and funding, which would be conditional and reliant on Australian Pacific progressing the Tetra/Javelin proposal. However, Australia Pacific noted that if the Tetra/Javelin proposal did not proceed, the offer of the moratorium and further debt funding from Trepang would likely be withdrawn.
“The offer received from the Trepang Parties is therefore restrictive, since it does not, among other things, provide the company with the opportunity to consider all of the other proposals before it, which may be, if they were able to be progressed, in the best interest of shareholders,” Australian Pacific said on Monday.
Australian Pacific also expressed concern that the Tetra/Javelin proposal would see the company and the Dartbrook project being burdened with additional debt, without its existing debt being paid off first.
Trepang has an existing relationship with Tetra, with Tetra representatives being nominee directors to the Australian Pacific board under a previous notice lodged by Trepang.
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