Ann: Dividend/Distribution - WHC, page-44

Extract AUST today:
BHP MINES A BREEZE FOR CASHED-UP WHITEHAVEN


UBS continued the conversation on Tuesday about the prospects of Whitehaven Coal buying BHP’s two coal mines for more than $US3bn.
After thrashing out valuation estimates a day earlier for the two mines up for sale, the bank’s analysts are now discussing funding options for a deal involving Whitehaven, which looks to be the frontrunner to buy both mines.
The analysts say they assume Whitehaven likely partner with a customer or trading house that funds 25 per cent of the deal.
A day earlier, the analysts said their base case valuation for both the mines – Daunia and Blackwater – was $US3.3bn.
Based on these assumptions, they estimate Whitehaven could potentially fund the acquisition 50 to 70 per cent with cash, requiring $US800m to $US1.3bn of debt with an overall debt level for the company of between 18 and 30 per cent.
The assets could lift Whitehaven’s revenue share from metallurgical coal from less than 20 per cent to 60 per cent.
“Our analysis indicates Whitehaven has an array of options available to fund a potential Blackwater and or Daunia acquisition, with commodity prices and transaction multiples the key driver of the debt and cash required.”
Whitehaven has confirmed it is bidding for both the Blackwater and Daunia mines in Queensland’s Bowen Basin, owned by BHP and Mitsubishi.
With more than $2bn of cash on its balance sheet, it has told shareholders it would only acquire the assets if a deal did not dilute its earnings.
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