PERTH (miningweekly.com) – Coal miner Stanmore Coal has completed the retail entitlement component of a A$694.1-million capital raise initiative, to fund the acquisition of an 80% interest in the BMC metallurgical coal joint venture (JV) in Queensland from major BHP.
Stanmore on Thursday announced that it had raised A$38-million under the retail component of its seven-for-three entitlement offer, which had been priced at A$1.10 a share.
Some 21.1-million shares were subscribed for under the retail entitlement offer, raising A$23-million, with more than 4.4-million shares taken up under the shortfall facility. The remaining 8.6-million shares offered under the retail entitlement offer will be acquired by underwriter Petra Capital.
The completion of the retail entitlement offer was the second and final stage of Stanmore’s entitlement offer to raise A$694-million, announced in March, and followed an institutional component which closed earlier this month.
“The response by the market to both the institutional entitlement offer and the retail entitlement offer shows the support for this acquisition, which is transformative for Stanmore. The current market outlook for metallurgical coal is very positive with historically peak prices and strong demand, including for PCI coals where demand is exacerbated by global supply disruptions, which helps underpin the value of this transaction for Stanmore,” said MD Marcelo Matos.
Under its agreement with BHP, Stanmore will acquire 100% of Dampier Coal from the diversified miner, which holds its interest in BMC for $1.35-billion. The purchase price comprises $1.1-billion cash on completion, $100-million in cash six months after completion and the potential for up to $150-million in a price-linked earnout payable in the 2024 calendar year.