DGAP-News: ICHOR Coal N.V. / Key word(s): Offer/Acquisition
ICHOR Coal N.V.: CASH OFFER MADE BY ICHORCOAL TO ASX-LISTED UNIVERSAL
30.09.2015 / 08:25
CASH OFFER MADE BY ICHORCOAL TO
ASX-LISTED UNIVERSAL COAL SHAREHOLDERS
30 September 2015: Ichor Coal N.V. (IchorCoal) has today provided its Offer
document in relation to its cash offer for the entire issued and to be
issued share capital of ASX-listed Universal Coal that it does not
currently own ("Offer").
On 21 August 2015, South African-based IchorCoal announced its intention to
make an offer at A$0.16 a share, valuing Universal Coal's entire issued
ordinary share capital at approximately A$80.9 million. IchorCoal is
currently a 29.99% shareholder in Universal Coal.
The Offer document circulated to Universal Coal shareholders sets out the
detailed terms of the Offer and explains the reason and benefits as to why
IchorCoal believes Universal Coal shareholders should accept the Offer.
Salient points in the Offer document include:
The A$0.16 offer per share represents a significant premium
The Offer price of A$0.16 per share is an attractive proposition that
represents a significant premium of 46.5% over the 60-day volume-weighted
average price on the ASX of A$0.109 per share on 20 August 2015 (the last
business day prior to the firm intention announcement) and a premium of
45.5% to the closing price of A$0.11 per share on that day.
The offer price premium of 45.5% to the closing price at that time is
significantly higher than the 30% premium paid by IchorCoal in September
2014, based on its average subscription price at that time. Prior to the
announcement on 21 August 2015, the shares had not traded at or above the
offer price since 2012.
The market value of the shares, based on the price at which they were
traded on the ASX as at the date of the offer, was A$0.18 a share. The last
trade at this price was made on 29 September 2015. A reasonable person
would assume that this new market price has been influenced by IchorCoal's
offer announcement on 21 August 2015 and the indicative proposal received
as announced on 21 September 2015.
Attractive Offer metrics
Universal Coal reported Group net profit after tax for the 2015 financial
year of A$1.19 million. The equity value of A$80.9 million implied by the
Offer consideration represents an NPAT multiple of 67.81x.
Universal Coal also reported Group EBITDA for the year ended 30 June 2015
of A$14 million. This represents an EV/ EBITDA multiple of 9.60x based on
the equity value of A$80.9 million implied by the Offer consideration and
net debt of ~A$27.42 million .
The offer allows Universal Coal shareholders to receive cash for their
The cash offer price allows Universal Coal shareholders an opportunity to
realise their investment at an attractive premium in a highly-illiquid
share, which has not paid a dividend since its listing on the ASX in 2010.
The cash offer is fully funded
The offer will be fully funded by IchorCoal through a capital increase that
is fully underwritten by Sapinda Invest. Further, IchorCoal's capital
increase and the offer to Universal Coal is supported by IchorCoal's major
shareholder, Sapinda Holding, which is fully supportive, providing its
irrevocable commitment to vote in favour of both the Offer and the capital
A formal recommendation from the Universal Coal Board has not been sought,
and the conditions to the Offer are customary for a transaction of this
The first closing date of this offer is 13h00 (London time) on 3 December
The Offer document contains full details of the Offer, including
instructions on how shareholders can accept. A copy of the offer document
will be available on IchorCoal's website - www.ichorcoal.com - by 12h00
(Sydney time) on 01 October 2015.
IchorCoal will continue to keep shareholders advised of progress made.
Universal Coal shareholders are also free to call an information service
that has been established to answer any questions pertaining to the Offer.
The number for the UK Receiving Agent in the United Kingdom is +44 (0) 208
639 3399 or the Australian Share Registry in Australia can be reached on
+61 130 065 3497.
NOTES TO EDITORS:
Background to and reasons for the Offer
- Universal Coal started trading on the ASX on December 2010 at an IPO
price of A$0.26 per share, with a target at IPO to achieve first coal
at its Kangala coal mine in 2011. Kangala commenced production in
February 2014 and achieved technical completion in December 2014.
- Universal Coal's next key asset is the NCC/Roodekop mine complex, where
Universal Coal announced the acquisition of NCC in February 2014 and
for which approval in terms of Section 11 of the South African Minerals
and Petroleum Resources Development Act was received from the
Department of Mineral Resources in July 2015.
- Universal Coal, along with other coal companies, has been impacted by
the price of seaborne thermal coal, which has fallen more than 28% in
the last 12 months, as well as by a worsening in investor sentiment for
South African resources companies by global investors.
- In this context, Universal Coal has seen a significant fall in its
share price since listing and as at 20 August 2015, being the last
business day prior to the date of the firm intention announcement, had
a closing price on the ASX of A$0.11 and a 60-day volume-weighted
average price of A$0.109, on limited trading volumes equivalent to less
than A$21,000 average per day over the period.
- Universal Coal has accordingly sought a series of strategic investors
to finance the development of its project portfolio, including most
recently a A$24.5 million investment by IchorCoal in October 2014.
- IchorCoal believes in the long-term fundamentals of the South African
thermal coal market and anticipates a recovery in the global seaborne
market in the medium to long term.
- In the context of challenging market conditions IchorCoal believes that
the consolidation of its interests in Universal Coal with its existing
South African coal mining interests provides the most robust platform
to manage the uncertainty in the prevailing and forecast market
IchorCoal is an international mining company with a focus on thermal coal
production in South Africa. Incorporated in the Netherlands, IchorCoal is
listed on the German stock exchange. IchorCoal owns and operates its own
coal resources as well as holding equity positions in various coal mining
entities. Apart from its 29,99% holding in Universal Coal, it also owns
45.2% in Mbuyelo Coal and controls the producing Vunene mine. IchorCoal has
attributable mineable resources of approximately 400 millon tonnes of coal
on 16 properties.
About Universal Coal
Universal Coal is a United Kingdom incorporated company focused on South
African thermal coal whose securities are listed on the ASX. Universal
Coal's projects in South Africa contain over 2 billion tonnes of coal
resources at three thermal coal projects in the Witbank coalfield and two
coking coal assets in the emerging Soutpansberg and Tuli coalfields.
Universal Coal's first operation, the Kangala mine, with an annual
production capacity of 2.8 mtpa ROM was successfully commissioned in
The directors of the management board of IchorCoal accept responsibility
for the information contained in this announcement, other than information
relating to Universal Coal. To the best of the knowledge and belief of the
directors of the management board of IchorCoal (who have taken all
reasonable care to ensure that such is the case), the information contained
in this announcement for which they are responsible is in accordance with
the facts and does not omit anything likely to affect the import of that
Ichor Coal N.V.
30 Jellicoe Avenue
Tel: +27 11 2681100
Ichor Coal N.V. Chief Executive Officer Nonkululeko +27 11
Macquarie First Financial adviser to Sean Chilvers +27 11
South Capital IchorCoal 2000
Birney Corporate Australian media agent to Matt Birney +61 8
matt@birneycorpor +61 4
Aprio Strategic South African media agent Julian Gwillim +27 11
Communications to IchorCoal 0037
30.09.2015 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
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