Ann: Underwritten Entitlement Offer - Update, page-4

fyi - Tinkler returns for Australian PacificCoal, new bid at $1 a share

There’s a new twist in the battlefor Hunter Valley coal miner Australian Pacific Coal.

SuitorNathan Tinkler is understood back, this time as part of a $1 a share takeoverbid from a private syndicate called Pacific Premium Coal.

PPC, which is backed by a number of former senior Peabodyexecutives and Tinkler, has lobbed its offer, which is nearly three times theprice of previous bids from Matt Latimore’s M Resources and Tinkler’s now defunct Nakevo consortium. It’s also about three-times the price of an underway equity recapitalisation.

Thebid is understood to have Shaw and Partners behind it, offering to underwriteboth the acquisition and restart funding, and law firm DLA Piper.

FormerPeabody executive John Canavan is understood to be involved

Sourcessaid the PPC deal would also allow lender Trepang Services to convert its debtand stay directly involved with the asset, so they could see it brought backinto production.

Trepang,an entity controlled by Nick Paspaley and John Robinson, was another partytrying to get its hands on Australian Pacific Coal’s Dartbrook mine. It had adeal to swap the asset for the $60 million or so in debt they were owed.

Coalkings tussle

The dealcomes as Australian Pacific Coal’s board had moved past the Trepang, MResources and Nakevo offers, and instead gone to market with a $100 millionentitlement offer to recapitalise the company.

Theentitlement offer involved some of the major players behind both the MResources and Nakevo bids, but not Tinkler, and is still being finalised. Itwas also subject to a side-deal with M Resources, which would see it oepratethe mine in return for half of the economics.

Theentitlement offer structure would see it hand half the equity value of the mineaway to M Resources, while raising $100 million to finance the other 50 percent of the mine.

The bidwould see the company sold for $1 a share at a time when its shares are at 34¢.

Theboard has a big call on its hands.

It’sthe second time in less than a decade that Tinkler has turned up at AustralianPacific Coal. The last time was in 2015, when he was appointed managingdirector, and he resigned in February 2016.

Whileit was a short stay for Tinkler, it was during his tenure that AustralianPacific Coal signed a deal to acquire Dartbrook. “Dartbrook is a high qualityasset and we look forward to progressing our plans further in consultation withthe local community,” Tinkler said in a statement to investors at the time.