One question that a number of mining suppliers may be asking is how will a sound company that is supplying one of the few growing sectors go in this climate.

The fact that a little more than 60% of Runge’s business is in the coal sector will not hurt. This is a good place to be given the recent trebling and doubling of prices for coking and thermal coal respectively.

Runge also has been an aggressive acquirer over the past few years, which has given it good geographical diversity. It now has representation in China, the UK, Asia and the Americas, as well as its native Australia.

As a result of those acquisitions the company has about $18 million debt. That will be paid down to about $10 million with some of the float proceeds. Other proceeds will go towards providing working capital and covering float costs of just over $3 million.

One of the main reasons for the float is to give Runge better access to the capital markets to, among other things, help gain funding for further acquisitions. According to the prospectus it will also allow employees to take more equity in the company and give the vendor shareholders some liquidity.

These vendor shareholders will be selling down some of their holdings for the float. This includes largest shareholder AMP Capital and staff.

Runge executive director Christian Larsen said it had been decided that the raising be split $20 million from new money and the rest from the selldown.

He said he had not wanted to sell down his stake but it had been necessary to make the float work.

So why float now? According to Larsen the float has been about 18 months in the making.

“It’s already been delayed a number of times,” he said.

“This was the point we were able to get good interest at a good price.”

Larsen admitted that the market downturn had caused a few tense moments but said there had been some good wins along the way.

“It was all so easy when we started this about six months ago,” he laughed.

But while the market took a downward turn, the coal price increases provided a fillip at a crucial time.

Larsen said the announcements came right in the middle of the book build.

“Fundamentally our business has never seen better times,” he said.

“The market may not be in great shape but our business is in very good shape. Demand is very high.”