Yancoal’s Chinese parent company considers a $US1.8bn bid to capture the remaining shares in the company, in what could be the first major test of foreign investment rules for incoming federal treasurer Jim Chalmers.
Yankuang Energy Group told the Hong Kong Exchange on Wednesday night it was considering offering convertible bonds to mop up the 37.7 per cent stake in Yancoal it does not own, worth about $US3.60 a share, which would convert to Yankuang shares on the Hong Kong exchange.
Alternatively, Yancoal holders could elect to hang onto the bonds and take fixed interest and principal repayments over time, Yankuang said.
The Hong Kong-listed energy major would only have to convince three major Yancoal shareholders to take its scrip through the offer, given only about 10 per cent of Yancoal’s ASX-listed shares are held by institutional or retail investors.
Yankuang already owns 62.3 per cent of Yancoal, Australia’s biggest listed coal miner. China Cinda Asset Management owns about 15.9 per cent of Yancoal stock, with Glencore holding 6.4 per cent and China Shandong Investments 5.4 per cent.
Acceptance by all three could take Yankuang to around the 90 per cent threshold needed to acquire the rest of Yancoal stock through compulsory acquisition rules.
But the acquisition may also pose the first major test of relations for the incoming government of Anthony Albanese, given Yankuang is a listed arm of Chinese state-owned mining groups and would like need the approval of the Foreign Investment Review board – and a sign-off from new treasurer Jim Chalmers – to close the transaction.
Yancoal called a halt to trading in its shares early on Thursday. Yancoal shares last traded at $6.08.
