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Gujarat's big placement

GUJARAT NRE Coking Coal made a $72 million institutional placement yesterday - roughly 11% of its current issued capital - to help meet its expansion goal of more than 6 million tonnes per annum run-of-mine by the 2014-15 financial year.

Blair Price
Gujarat's big placement

The placement was fully underwritten by the Australian branch of UBS for 100 million ordinary shares at 72c each, a 12.2% discount to the 82c closing price on Tuesday.

“The capital raising was supported by a wide group of new and high‐quality institutional investors, demonstrating the interest in Gujarat and its long‐term prospects,” Gujarat chairman Arun Jagatramka said.

The proceeds will boost investment into the $375 million development program in progress at its NRE No.1 and Wongawilli underground mines in Wollongong.

After completing the bookbuild yesterday, the trading halt on Gujarat shares is expected to be lifted today with the additional shares scheduled for allotment on February 23.

Overall production for the current financial year is expected to be around 1.7Mt, and Gujarat is seeking to hit 2.5Mt run-of-mine for the next year after the $90 million Joy longwall is commissioned at its NRE No.1 colliery by early 2012.

The coal is exported to Gujarat’s metallurgical coke-producing parent company in India.

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