Yancoal completes $1.85bn takeover of Kestrel met coal mine
ASX-listed Yancoal Australia has completed the acquisition of an 80% interest in the Kestrel coal mine, in Queensland, for $1.85-billion.
Yancoal announced in April it would acquire the entire share capital of Kestrel Coal Group from vendors including EMR Capital Advisors and Adaro Capital.
Kestrel Coal owned 80% of the Kestrel coal mine, which is a large-scale metallurgical coal asset in the Bowen Basin of Queensland.
Yancoal paid the consideration partly in cash and partly through a five-year syndicated $1.2-billion acquisition loan facility. Another $200-million, five-year committed working capital facility to support Yancoal's liquidity requirements remains undrawn at this time.
A contingent cash consideration up to $550-million will be due once the relevant benchmark coal price exceeds $225/t in any of the first five years after the deal.
Yancoal will recognise its interest in the attributable Kestrel production, revenue and earnings from October 1.
The company maintains that the 80% interest in the Kestrel coal mine is a strong and strategic fit for Yancoal, adding a high-quality and long-life asset to the group's portfolio and a premium metallurgical coal to Yancoal's product mix.
"The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner. We have worked closely with EMR, Adaro and KCG management over the past months to facilitate integration of Kestrel into the Yancoal portfolio. We look forward to working closely with the committed Kestrel employees, and Mitsui, our joint venture partner and owner of 20% of Kestrel, to continue to add value to the mine, local communities and stakeholder," Yancoal CEO Sharif Burra states.
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