White Energy Ditches Planned Merger For A$100 Million Raising
November 10 2009 - 11:28PM
Dow Jones News
White Energy Co. Ltd. (WEC.AU) said Wednesday it has walked away
from its planned merger with a U.S.-listed cash box, turning
instead to equity markets to fund its coal upgrade projects with a
A$100 million raising.
In July, White Energy announced it was to receive a cash
injection from Asia Special Situation Acquisition Corp. of between
US$100 million and US$140 million through a merger of the two
companies, which was effectively a friendly reverse takeover of the
Sydney-based group.
But with the terms of the deal being reworked several times
since then and equity markets recovering strongly, White Energy
said both parties have now agreed to withdraw from the deal.
"It has become clear to the board that a number of the
conditions precedent and other matters fundamental to the
successful completion of the merger transaction were unlikely to be
achieved," White Energy said in a statement.
With the merger deal stalled, Southern Cross Equities took the
initiative and made an unsolicited approach to White Energy
proposing a capital injection by way of a placement to
institutional investors.
White Energy said Wednesday it has agreed to proceed with the
placement of 41.67 million shares to institutional clients of
Southern Cross at A$2.40 a share to raise A$100 million.
The funds raised will go toward the roll out of the company's
Binderless Coal Briquetting technology which upgrades the quality
of coal by crushing and drying it and then compacting it into high
density briquettes.
It already has one plant operating, in joint venture with Bayan
Resources (BYAN.JK), at a rate of about one million metric tons a
year at the Tabang mine in Indonesia and plans to ramp this up to
an annualized rate of five million tons in 2010.
White Energy has also struck a deal with U.S. coal group Peabody
Energy Corp. (BTU) to build briquetting plants with capacity of up
to 20 million tons a year in the Powder River Basin.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com
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