Coronado seeks to raise A$1.4b

HONG KONG: Coronado Global Resources Inc, a miner backed by private equity firm Energy & Minerals Group, and current investors are seeking to raise as much as A$1.4 billion (RM4.21 billion) in what would be Australia’s largest coal initial public offering (IPO).

The company and existing holders were offering Chess Depository Interests (CDIs) at A$4 to A$4.80 each, according to a prospectus lodged yesterday with the nation’s regulator.

That will give Coronado, the biggest United States metallurgical coal producer, an enterprise value of as much as A$4.4 billion. Trading was scheduled to start October 23 on the Australian stock exchange, it said in a statement.

Coronado’s IPO is set to top Aston Resources Ltd’s A$400 million listing in 2010 as Australia’s largest coal firm float, data compiled by Bloomberg show.

A total of 290 million CDIs would be available under the offer, according to the prospectus. Energy & Minerals will retain a 69 per cent stake, new shareholders will own 30 per cent and the rest will be held by management.

A rebound in coal prices is helping producers generate significant returns again after a prolonged slump forced many to shut operations, shelve development projects and cut jobs.

Coronado, which has mines in the Central Appalachian region of the US, expanded into Australia last year with an agreement to purchase Wesfarmers Ltd’s Curragh mine for A$700 million.

The entry into Australia gives Coronado easier access to some of the world’s top steelmakers in China, Japan and South Korea.

About 76 per cent of its last year’s output was met coal, which was used to make steel, according to the statement.

Coronado had a total met and thermal coal production capacity of about 20 million tonnes annually, including about 12 million tonnes from Curragh in Queensland’s Bowen Basin, according to a March statement.