Wednesday, December 21

Yancoal knocks on a back door deal

The Chinese approach to Gloucester Coal, proposing a merger with Yancoal Australia, is driven by an interesting mix of necessity and opportunity.

In 2009, Yancoal’s parent, the Chinese state-owned enterprise Yanzhou Coal Mining, acquired Felix Resources and its coal mines in NSW and Queensland for more than $3 billion, the biggest acquisition of an Australian company by China at that time.

The problem for Yanzhou is that to obtain Foreign Investment Review Board approval it committed to offering 30 per cent of Yancoal to public investors before the end of 2012. With the clock ticking and market conditions deteriorating the prospect of a forced selldown against a deadline and into a potentially difficult market next year will have been the focus of significant attention within Yanzhou


Business Spectator.


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