Bowen Energy Ltd has formalised a partnership with India's third biggest steel maker, Bhushan Steel Ltd, bolstering its confidence in its proposed takeover of coal explorer, Rocklands Richfields Ltd.
Bowen managing director Kevin Nichol described the basis of the agreement with Bhushan, as: "we find it; they develop it."
Under the deal, Bhushan will purchase two million Bowen shares at 32 cents a share, which the companies said represented a significant premium on the current share price of the Brisbane-based uranium and coal explorer.
Bowen shares closed up 3.5 cents, or 14.58 per cent, at 27.5 cents.
Mr Nichol said the partnership will provide Bowen with a cash injection to advance work on its future coal projects.
In return, Bhushan will be able to directly invest in the Australian coal industry and access local technical and management expertise.
Mr Nichol said Bhushan supported Bowen's bid for Rockland, which the Brisbane-based company launched in June.
"Bhushan has very publicly and strongly supported our off-market takeover offer for Rocklands and I'm confident that, with their support, we'll be successful," Mr Nichol said.
"Rocklands has some potentially great coal assets (Rocklands and Hillalong) which, when combined with Bowen's own coal projects at West Rollerston and Middlemount, can transform Bowen into a major new coal producer."
Bowen is offering one Bowen share plus 10 cents for every two Rocklands shares held under the bid.
Rocklands itself is currently attempting a reverse takeover with China Coke & Chemicals Ltd, with Rocklands shareholders due to vote on the deal in September.
BWN Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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