http://www.commodity.at/index.php?topic=ticker&id=27559&lang=en¢...

http://www.commodity.at/index.php?topic=ticker&id=27559&lang=en

¢ Cockatoo Coal (COK AU) Agreement to sell 30% interest in Hume Coal COK has agreed to sell its 30% interest in Hume Coal to JV partner POSCO, for A$9.74m cash and the cancellation of 134.8m shares. The management agreement will also be terminated, leaving POSCO to run the development. Source: Company

Investec view: The deal essentially reverses COKs acquisition of the 30% interest back in September 2010, with the cash element refunding expenditure to date. The Hume project is located in NSWs Southern Highlands and was always going to be politically challenging, so the sale is a sensible outcome in our view. COK needs to secure funding for its Baralaba expansion and also needs to refinance A$100m of debt maturing in June so capturing value from non-core assets that the market attributes no value to is likely to continue. In the current market, we would expect the Bylong option to be the next deal. COK has an option to acquire 30% of the Bylong project for A$157m by the end of 2013. Clearly, COK cant fund that option at present, but may surprise the market by realising some value from the sale of the option. Concentrating on its Queensland operations would also help manage corporate overheads.