The discount will be about 19% to the last closing price on March 5, and rights issue shares will rank equally with existing ordinary shares. Shareholders who accept the offer will be able to apply for additional shares at the offer price.

Rights trading will start on Friday and finish on March 30. The closing date for payment in full will be April 6 and normal trading of new shares will start on April 20.

Macarthur said the funds raised would be used to partially repay its acquisition of an additional 23.3% interest in the Coppabella mine in December; for working capital for the proposed increase in attributable coal production at Coppabella and Moorvale, and to evaluate other growth projects.

The issue is being underwritten by ABN AMRO Morgans and ABN AMRO Rothschild.

Macarthur Coal shareholders will receive the rights issue prospectus by March 23.

The share offer follows the declaration of force majeure and the $2 million downgrade to Macarthur's forecast 2003-04 net profits after the Dalrymple Bay incident in February, in which a reclaiming machine became derailed.