PERTH (miningweekly.com) – The battle for control over ASX-listed Australian Pacific Coal has seen another contender enter the ring, with the company receiving yet another conditional non-binding indicative proposal, this time 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.
Australian Pacific on Tuesday said that it would seek advice from Trepang as to whether it was willing to support the proposal.
The Tetra offer is just one of several on the table at Australian Pacific.
Australian Pacific and Trepang had previously agreed to an offer that would result in Australian Pacific Coal’s consolidated liabilities reducing by some A$65-million, and the company receiving royalties from the net profits of the Dartbrook project of between A$2.50/t and A$5/t, based on the average coal price per quarter.
However, the transaction, which had been subject to shareholder approval, had been derailed by a non-binding alternative proposal from Nakevo, which was proposing to provide Australian Pacific Coal with immediate funding by way of an equity subscription for 19.97% shares in the company, at a price of 30c each for a total investment of A$3.78-million.
Nakevo would also arrange to refinance Australian Pacific Coal’s debt owed to creditors John Robinson, Nicholas Paspaley and Trepang Services, and would make a takeover bid for Australian Pacific Coal of up to 30c a share, allowing existing shareholders to liquidate their investment once the refinancing has been completed.
The company subsequently also received another non-binding indicative proposal from M Resources, offering immediate funding to Australian Pacific by way of a subscription for 14.99% of the company’s shares, for a total investment of A$2.7-million.
The M Resources offer also included Australian Pacific and its lenders agreeing to refinance or restructure the company’s current debt, and an all-cash consideration of 36c a share for Australian Pacific, valuing the takeover offer at A$18.2-million.
Australian Pacific last month launched a 5.83-for-1 fully underwritten renounceable pro-rata entitlement offer, priced at 34c a share, to raise A$100-million, the proceeds of which would be used to fully repay the Trepang debt and to fund general working capital.
The entitlement offer will close on September 23.