Former high-flyer Coalspur takes 2.3c offer

Rescued or euthanised?

That's the question Coalspur (CPL) shareholders will be pondering today following the news of a takeover bid for their beleaguered company at 2.3c a share.

On one hand, the offer represents a 44 per cent premium to Coalspur's share price of yesterday. But on the other, it values the company at just $15 million.

Coalspur shareholders will hardly need reminding that this is just a fraction of what their one-time share market darling was worth when the stock was orbiting above $2 four years ago.

Of course, the world was a different place back then and the coal universe was unrecognisable compared with today's charred remains.

The offer comes from an affiliate of private company Cline, an acquisitive coal group which took the Donkin coal mine in Nova Scotia off Glencore's hands. Cline says its various arms control more than four billion tonnes of coal reserves.

Coalspur's glory days were underwritten by its Vista thermal coal project in Canada. The story, like all successful bulk commodity yarns, was based on access to infrastructure.

But as the thermal coal market collapsed, this effectively became the train to nowhere and the share price tracked its fortunes.

The offer is the culmination of a process put in place by Coalspur in an effort to end its share market demolition. Every project development, asset sale sand M&A option was on the table.

The board is backing the Cline deal, which requires the approval of Coalspur shareholders.

"The agreement with KCE (Cline) is the best option for our shareholders in the context of the company's upcoming obligation to repay its debts," Coalspur chief Gill Winckler said.


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