PERTH (miningweekly.com) – ASX-listed Australian Pacific Coal’s major shareholder and creditor Trepang Services has thrown its support behind a new bid for the Dartbrook coal project, from Tetra Resources and Javelin Private Capital Group.

The two companies were proposing the formation of a joint venture (JV) with Australian Pacific, 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 included a debt moratorium and funding agreement between Australian Pacific and its major shareholder Trepang Services, with the bidding parties indicating Trepang’s support to the debt moratorium and funding agreement. However, Australian Pacific has not been provided with evidence of this support.

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.

The proposed transaction is subject to a number of conditions, including JV documentation, a coal marketing agreement, the pre-pay loan agreement, management agreements with Tetra, and a debt moratorium agreement with Trepang.

The offer from Tetra and Javelin comes amid other offers from Nakevo and M Resources, as well as Australian Pacific’s plans to raise A$100-million in a 5.83-for-1 fully underwritten renounceable pro-rata entitlement offer, priced at 34c a share.

Trepang said in a statement to Mining Weekly on Friday that the company was of the view that the JV proposal received from Tetra and Javelin was superior to other proposals currently being considered by Australian Pacific, in particular a highly dilutive entitlement offer proposed by the coal miner.

“Trepang believes the JV proposal by Tetra/Javelin promises the highest value and the most accretive outcome for Australian Pacific shareholders and for the development of the Dartbrook project.

“Australian Pacific’s current plan results in the economic interest of existing shareholders in Australian Pacific being slashed to an immaterial level of approximately 7%, before the mine restart is funded, which would almost certainly result in further dilution. This contrasts to the proposal tabled by Tetra/Javelin, which would result in existing Australian Pacific shareholders retaining a 60% economic interest in the project, and this includes the mine restart being fully funded,” Trepang said.

“As a result, in order to progress the Tetra/Javelin proposal, and subject to reaching a binding agreement and no superior proposal being received, Trepang has agreed to a moratorium on its debt, and a funding agreement between Australian Pacific and Trepang Services and its associated parties.”