Gujarat secures $66M to help fund production drive

GUJARAT NRE Coking Coal has finalised the introduction of approximately $66 million in new capital to the company through a placement at 20 cents per share to Jindal Steel & Power Group.
Gujarat secures $66M to help fund production drive Gujarat secures $66M to help fund production drive Gujarat secures $66M to help fund production drive Gujarat secures $66M to help fund production drive Gujarat secures $66M to help fund production drive

Image courtesy of Gujarat NRE Minerals.

Lou Caruana

The financing will help the company meet its objectives of production of about 6 million tonnes per annum from its two hard coking coal mines, NRE No 1 Colliery and NRE Wongawilli Colliery in New South Wales.

The financing is a major achievement given the equity and coal market conditions and is a positive step to progress the company to meet its stated objectives,” executive chairman Arun Kumar Jagatramka said.

“The introduction of this capital is important to ensure that the company is able to execute on its plans in a difficult market for coal companies and also weak equity capital market,” he said.

“Jindal has been a strong supporter of the company and its quality assets, both as a shareholder and purchaser of the product, and this investment further extends their commitment to the company.”

As part of the placement, Jindal will receive 328.5 million new shares as well as about 328.5 million unlisted transferable options exercisable for nil consideration within a period of 5 years from the date of issue of the option.

In addition, the company will make an offer to shareholders not associated with Jindal and Gujarat on a pro‐rata basis one new share for every four shares held on the record date plus one attaching unlisted transferable option for every one share subscribed.

The ordinary shares will be issued at 20 cents per new share and each option shall be exercisable for nil consideration within a period of 5 years from the date of issue of the option.

The proposed financing will be subject to the approval of the company’s shareholders at a general meeting.

As part of the whole transaction, the board has been restructured to accommodate Jasbir Singh being the nominee director of Jindal, following the resignation of Mona Jagatramka.

In addition, Jindal and Gujarat will enter separately into new off‐take agreements on normal commercial terms and conditions reflecting the changing ownership structure which will secure the sale of ROM coal from Gujarat.

The company is in negotiation with its existing lenders to finance up to a further $US200 million. To date, approval has been received for $US76 million of this facility from some of the lenders.

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