adani share issue closes wednesday (today), page-7

SYDNEY (Dow Jones)--Market speculation is firming that Linc Energy Ltd. (LNC.AU) will succeed in its third attempt to offload non-core coal assets in Queensland state after bankers said potential buyer India's Adani Enterprises Ltd. (512599.BY) on Wednesday raised US$850 million via a share issue.

The news sent Linc's shares up 18% to A$1.535 by 0440 GMT.

Investors, however, aren't getting too carried away, with Adani yet to confirm precisely why it's raised the money and given the collapse of two previous attempts by Linc to sell coal assets to separate Chinese buyers.

Adani on Tuesday successfully completed the institutional share sale to expand its coal mining operations and repay loans, two bankers with direct knowledge of the matter said. The bankers wouldn't provide more details on how the funds will be used.

An offer document posted by Adani on its website says proceeds will be used toward capital expenditure, including spending in its coal mining business; working capital requirements; investments in subsidiaries or joint ventures; the acquisition of mining licenses; and general corporate purposes.

Linc last week confirmed an Indian press report that it's talking to Adani about selling its Galilee thermal coal property in Queensland state, recently valued by Linc at over A$1 billion.

Brisbane-based Linc's shares have risen 46% in the past week but are well down on their September 2008 highs, when they trading above A$5.00.

"I can tell you we are talking to Adani and we are deep in negotiations with them," Linc Chief Executive Peter Bond told Dow Jones Newswires last week, adding that Linc is also talking to a few other groups that have expressed an interested in the same asset.

Linc said last month that it had received a number of "written indicative" offers for all three coal properties it wants to sell: Emerald, Galilee and Pentland.

Separate attempts to sell the Emerald tenement to China's Xinwen Mining Group for A$1.5 billion and all three properties to Yanzhou Coal Mining Co. (1171.HK) failed.



-By Ross Kelly and John Satish Kumar, Dow Jones Newswires; 61-2-8272-4692; [email protected]



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