Target $18.72, page-8168

US$1b or AU$1b

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Reduces payback time by 6-9 months.

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Takes pressure off the debt obligations, especially as we move into a low point for thermal... I think it's a sensible move to sell down. I reckon we'll only see 20% sell down with very little chance of 30% and only one partner. The coal is very different to the remaining BMA operations which have 50/50 ownership BHP/Mitsubishi. BMA primarily has one prime super high quality product, while WHC will now have numerous met products of variable qualities. I think the 80/20 split will be determined as the point because it gives the 80% owner leverage into the market... I haven't thought to far down this path to explain in more detail, but, I'm ultimately forming the vision that divestment of more than 20% will weaken WHC negotiating power into the market.

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The market already knows this transaction is taking place and can estimate how it'll impact fundamentally on price, so, I don't expect wild swings on the news, unless the team at fairfax/news/UBS can whip up a narrative for y'all to chase the dream. Trend is currently down, thermal about to experience pain and met is rolling off its highs as we speak. Summer is coming for the northern hemisphere and they're well stocked after last year's warm winter plus high levels of blast furnace utilisation. Supply & demand should see lower prices and better entry points over the next six months. I'm holding tight through the next 6-9 months looking for periods of weakness to add.

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Interesting times.