Endocoal has also entered into a 12-month loan facility agreement with U&D to provide interim debt funding of $4 million which will be used for working capital and for the development of the Meteor Downs South project.

Endocoal chairman Rodney Austin welcomed the $71 million bid.

He said the company faced an increasingly challenging operating environment given recent global financial uncertainty and pullback in funding available to junior resources companies.

“The U&D scheme is the culmination of Endocoal’s announced process of 28 May 2012 conducted by Macquarie Capital as its corporate adviser to review all asset and corporate transaction opportunities,” he said.

“A number of proposals were received from a number of parties across a wide range of corporate and asset level transactions.

“After a due and competitive process the board considered the U&D transaction to be the transaction that provided the most value for shareholders.

“The U&D offer allows shareholders to receive a significant value premium to recent trading levels and benefit from the certainty of cash consideration.”

U&D has been established to make investments in the coal sector in Australia and to pursue its international strategy by participating in coal trading and the development, production and operation of Australian coal mines, according to an Endocoal statement.

In February this year, U&D completed the acquisition of EPC 818, a prospective coal exploration tenement in the Isaac region of Queensland.

Following the completion of that transaction U&D has undertaken an extensive process evaluating other opportunities in Australia, with a focus on the Bowen Basin.

Yima sees Australia as an important supplier of coal and pivotal to its international strategy.

The transaction demonstrates the conviction of its strategy to establish its coal operations in Australia.

The offer is subject to regulatory and shareholder approvals in Australia and China.

“U&D’s acquisition of EPC 818 in February 2012 validates a successful track record for executing transactions in Australia,” Austin said.

“Further, U&D have demonstrated willingness to accommodate the interim funding needs of Endocoal by providing the company with an attractive loan facility in good faith.”

Last week Endocoal announced changes to its board, with chief executive and BHP Billiton veteran Tim Hedley assuming the role of managing director while founding MD Rod Austin would be stepping down.

Since joining the company in April 2011, Hedley has been instrumental in leading the development of Endocoal’s Meteor Downs South project as well as overseeing its exploration activities in the Bowen Basin.

Hedley has 35 years experience as a mine manager and general manager for various BHP mines in Queensland and New South Wales and has a strong background in project development and delivery.

Austin said since the company moved its corporate functions from Sydney to Brisbane he would step down to allow the appointment of Brisbane-based directors.

Endocoal’s board has unanimously recommended the election of Ray Miller as a non-executive director at its next annual general meeting.

Miller has more than nine years experience with BHP Minerals in the positions of finance vice president and executive general manager of coal.