Coalworks rejects moves to change board

MONDAY’S $172 million takeover offer by Whitehaven Coal for Coalworks has prompted the company to renew its recommendation that shareholders vote against resolutions proposed by 7% shareholder Macquarie Bank to remove chairman Wayne Mitchell and chief executive officer Andrew Firek.
Coalworks rejects moves to change board Coalworks rejects moves to change board Coalworks rejects moves to change board Coalworks rejects moves to change board Coalworks rejects moves to change board

 

Lou Caruana

A meeting that will include the resolutions to oust the chairman and CEO is scheduled for June 15.

The unsolicited and conditional offer from Whitehaven came after the implementation of a $5.1 billion merger with Aston Resources and the acquisition of Nathan Tinkler’s Boardwalk Resources which delivered the company a 17.3% shareholding in Coalworks.

Coalworks advised shareholders to take no action on Whitehaven’s $1 per share offer.

“If the Macquarie resolutions are passed, the board will be fully made up of Boardwalk/Whitehaven and Macquarie nominees whose interests are not necessarily aligned with other Coalworks shareholders,” Coalworks said in a statement.

“This is of particular concern in light of the announcement of the unsolicited conditional offer for Coalworks from Whitehaven on 7 May 2012.

“Coalworks considers that the removal of Mr Mitchell and Dr Firek could make it significantly easier for a potential acquirer such as Whitehaven to gain control of Coalworks without paying a price reflecting the value of Coalworks’ assets.

“Coalworks’ board and management led by Mr Mitchell and Dr Firek have overseen a period of significant achievement and share price growth over the past 12 months.”

Coalworks said it continued to build the asset backing of the company through developing a strategic inventory of coal resources, while at the same time increasing the value of its tenements through the achievement of a number of milestones.

On the operational front, Coalworks completed a prefeasibility study at the Vickery South coking and thermal coal project in the Gunnedah Basin of New South Wales, for which it also made a strategic land acquisition to position the project for infrastructure access, with production expected to commence in 2015.

It also announced a maiden JORC-inferred resource of 743 million tonnes at Ferndale in NSW, with production expected to begin in 2016.

Last November, a boardroom coup at Coalworks, engineered by Nathan Tinkler and Macquarie, saw the ousting of two of the company’s directors.

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