Yancoal shareholder lodges complaint over raising for $2.69 billion Rio coal deal

reuters.com Company,  International 2017-08-09 17:55:00

Hedge fund Senrigan Capital Management has asked Australian regulators to intervene in Yancoal Australia's efforts to fund its $2.69 billion purchase of the Coal & Allied division of Rio Tinto, saying it is unfair to minority shareholders, Reuters reported on August 9.


Senrigan is seeking an order from Australia's Takeovers Panel that a proposed renounceable entitlement offer to raise up $2.35 billion be prevented from proceeding in its current form without shareholder approval.


A second minority shareholder, commodities trader Noble Group is also considering taking the deal to the Takeovers Panel, a source close to Noble said recently.


The Takeovers Panel said in a statement it had made no decision whether to conduct proceedings. The entitlement offer is due to run from August 10 to August 25.


The purchase of the Rio assets would give Yancoal, which is 78% owned by Chinese coal giant Yanzhou Coal Mining Ltd, majority interests in three of the 10 largest low-cost thermal coal mining operations in Australia.


The panel said Senrigan had submitted that the 23.6 for 1 renounceable entitlement offer priced at $0.10 per share, a deep discount to Yancoal's share price before the announcement, was "unnecessarily highly dilutive and value shifting."


The offer was also underwritten by two groups that were associates of Yanzhou, which could take its voting power in Yancoal from 78% to 89.15%, Senrigan said.


The offer does not allow existing minority shareholders a "reasonable and equal opportunity to participate and is prejudicial to the ongoing ownership interests of existing minority shareholders," the fund said.


Senrigan and Noble argued successfully before the Takeovers Panel in 2014 that a rights offer by Yancoal was part of a strategy to enable Yanzhou to convert notes into shares to allow for the compulsory acquisition of minority shareholdings without a shareholder vote.


Separately, Glencore has agreed to buy a 49% interest in a key part of Coal & Allied, comprising a 16.6% stake directly from Yancoal and 32.4% from Mitsubishi Development Corp contingent on the deal going through.


(Writing by Becky Du  Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China 5th 100 Mt coal rail channel to start operation in 2019 2018-07-19

Shaanxi Coal and Chemical Industry Group will put China's fifth coal rail channel with shipment capacity above 100 million tonnes per annum into operation before end-2019, joining government's years-l

2 Rising hydropower generation will further crimp China's coal demand growth 2018-07-19

With demand softening recently, bearish sentiment ripples through China's thermal coal market. Among all factors involved, fast-growing hydropower can't be ignored. Hydro power generation

3 China Coal Daily Track (Jul 19) 2018-07-19

Thermal coal Domestic market Key production regions saw the prices slip further as a whole. In Shenmu county in Yulin city, Shaanxi province, coal prices decreased 5-15 yuan/t on J

4 CHN Energy's 150 Mt long-term coal contracts to sooth nerves of Chinese utilities 2018-07-19

China Energy Investment Corporation (CHN Energy) will sign 30 million tonnes of long-term thermal coal contracts with leading power firms during a national coal trade fair, which will last three ye

5 Shanxi Jun power output increases 13.9% on yr 2018-07-19

Shanxi province in North China generated 24.78 TWh of electricity in June, rising 13.94% from a year earlier, showed data from the provincial commission of economy and information technology.

6 China traders shun import thermal coal trades on weakening yuan 2018-07-19

Traders tended to avoid trades on import coal into China for the time being, as the depreciating yuan pushed up cost in a market that has already started weakening amid slack buying from Chinese utili

7 China thermal coal prices slide further; stocks remain high at N ports 2018-07-19

China's thermal coal market showed no sign of pickup with prices continuing to step down, duo to thin demand as most buyers are waiting for a lower price to take position. During the past

8 Fenwei Analysis: impact of Tangshan production curbs on coal, coke & steel markets 2018-07-19

1 Background The top steelmaking city of Tangshan in northern China's Hebei province registered the worst air quality among 74 cities during April and May this year, according to air quality ra

9 Shanxi Jun outbound rail coal sales hit 17-mth high 2018-07-19

China's coal-rich Shanxi province sold 27.92 million tonnes of coal via railway to end users outside of the province in June, touching a new high since last February. It posted a 0.2% tic

10 CR Power Jun production down 1.8% on yr 2018-07-19

China Resources Power Holdings Company Limited ("CR Power", stock code: 0836) saw total electricity generation of subsidiary power plants decrease 1.8% from the same period of 2017 to 13.37 TWh in Jun

Most Read Articles

1 Indonesian coal ships stranded after regulating policy introduces 2018-07-10

Traders with old Tanda Registrasi and associated Ekspor Terdaftar licences to export coal since July 1, 2018 have been forbidden to do so, according to Wood Mackenzie. "Market rumours sug

2 China June power coal price index up 2.56% MoM 2018-07-12

China's monthly-issued price index of power generation coal increased 2.56% month on month to 528.57 yuan/t in June, rebounding from three-month falls, and 7.67% higher from a year ago, showed data

3 China's port restrictions cause berthing disruptions 2018-07-12

A wave of stricter port restrictions in south China has left steel producers searching for alternative ports to allow them to berth vessels carrying their imported metallurgical coal cargoes.

4 China's Jun coal imports rise 17.9pct on robust buying demand 2018-07-13

China's coal imports climbed by 17.9% from a year earlier to 25.47 million tonnes in June, showed data from the General Administration of Customs (GAC) on July 13, as coal-fired power plants accelerat

5 CHN Energy slashes Jul-term contract coal prices, sources 2018-07-11

China Energy Investment Group, also known as CHN Energy, has reduced its monthly contract prices of thermal coal for July delivery, market sources said. The coal giant asked its subsidiar

6 Rising supply, trade tensions expected to depress iron-ore market 2018-07-09

Iron ore is starting to buckle after a series of warnings that prices are set to drop as global supply rises, and as investors fret about the potential impact of escalating trade tensions between the

7 China coastal coal freights rebound as demand from utilities climbs 2018-07-09

China's coastal coal freight rates started to rebound in recent days, as shipping demand showed signs of recovery from utilities which saw rising coal burns amid hot days. Noticing that t

8 China import coal trades below expectations; offer prices mixed 2018-07-09

Few trades were heard clinched on import coal for China, with most cargoes in the hand of traders who gave varied offer prices. Low-CV Indonesian coal of 3,800 Kcal/kg NAR was offered at

9 Indonesian low-CV thermal coal prices firm amid supply shortage 2018-07-12

Coal supply from Indonesia, the world's top thermal coal exporter encountered a slowdown recently, due to continuously rainy weather, supporting prices of the power generation material to stay firm.

10 High offers crimp Chinese thermal coal import trades 2018-07-10

China's import trades of thermal coal remain tepid as foreign offers keep at a high level, even after Chinese yuan started to strengthen. Coal prices have been stable in recent days, said