Golden Energy and Resources (GEAR) has, through its subsidiary Stanmore Resources, acquired BHP Minerals’ 80% interest in BHP Mitsui.
This is done through the acquisition of all the shares in Dampier Coal (QLD) by Stanmore SMC Holdings, a newly-incorporated wholly-owned entity under GEAR.
A share purchase agreement (SPA) was signed by Stanmore Resources and BHP Minerals on Nov 6.
Upon the completion of the acquisition, Stanmore will pay US$1.1 billion ($1.48 billion), and another US$100 million six months after the acquisition.
Stanmore will also pay up to a maximum of US$150 million based on a revenue sharing mechanism if the average sales price achieved is above a certain threshold over a two-year period from the completion of the acquisition.
See: GEAR fails to win bid for Stanmore Coal
This is payable within three months of the end of the testing period, which is estimated to be in 2024.
BMC owns metallurgical coal assets in Queensland, Australia. The assets comprise the South Walker Creek and Poitrel mines, with a combined production of around 10Mt per annum.
The assets also include the undeveloped Wards Well coal project.
According to GEAR, Stanmore intends to fund the acquisition via a partially underwritten pro-rata entitlement offer of ordinary shares in Stanmore, a new US$625 million acquisition debt facility and internal sources.
The acquisition is expected to be completed by mid-2022.
The acquisition is subject to approval from the Australian Foreign Investment Review Board, as well as the shareholders of PT Dian Swastatika Sentosa Tbk (DSS), GEAR’s controlling shareholder.
Approval from certain merger control authorities is also required.
Stanmore has agreed to pay a deposit of US$30 million on execution of the SPA, which will be refunded once the DSS shareholder approval is obtained. Should the shareholder approval not be required, it will pay a break fee in the event that the conditions relating to the DSS shareholder approval or the merger control authorities are not satisfied.
GEAR has committed to subscribe up to US$300 million of its entitlements in the entitlement offer.
Shares in GEAR closed flat at 33.5 cents on Nov 5.