Yancoal Australia Ltd. has completed its acquisition of an 80 per cent controlling interest in Queensland’s Kestrel coal mine from vendors including EMR Capital Advisors and Adaro Capital.
Yancoal paid an upfront cash consideration of US$1.85 billion (AU$2.66 billion) upon completion, subject to customary adjustments and deducting an initial US$40 million deposit.
The acquisition was funded through a combination of Yancoal’s existing cash reserves and an initial draw on a five-year syndicated US$1.2 billion acquisition loan facility. A separate US$200 million committed working capital facility remains undrawn.
The deal, which was originally announced in April, sees Yancoal acquire the entire share capital of Kestrel Coal Group Pty Ltd. Located in the world-class Bowen Basin, Kestrel is a large-scale, long-life metallurgical coal operation. Japanese conglomerate Mitsui retains the remaining 20 per cent joint venture interest in the mine.
The transaction also includes contingent cash payments capped at US$550 million, which will trigger if benchmark coal prices exceed US$225 per tonne in any of the first five years post-completion. Yancoal will recognise its share of Kestrel’s production, revenue, and earnings from October 1.
Yancoal CEO Sharif Burra said: “The acquisition of an 80 per cent interest in the Kestrel Coal Mine represents a strong strategic fit for Yancoal and adds a high-quality, long-life metallurgical coal asset to our portfolio.
“Kestrel delivers increased scale and diversification to Yancoal’s portfolio; it adds a premium metallurgical coal to our product mix.
“The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner.”
