NEW Hope Corporation Limited (ASX: NHC) has reached a binding commitment with Wesfarmers Limited (ASX: WES) to purchase a further 40 per cent interest in the Bengalla Joint Venture for $860 million.
New Hope currently boasts a 40 per cent share in the Bengalla Joint Venture.
New Hope’s final interest in the Bengalla Joint Venture will be dependent on the actions of the other joint venture participants, Mitsui and Taipower, during the pre-emptive rights process under the Bengalla Joint Venture Deed.
Following completion of the transaction, which is anticipated to occur in late 2018, New Hope will own up to an 80 per cent interest in the Bengalla Joint Venture.
It is anticipated that the deal will be financed by a combination of cash and new debt facilities.
The transaction will be subject to the usual regulatory processes.
“The acquisition of an additional interest in Bengalla demonstrates New Hope’s long-term commitment to the Bengalla mine and a positive outlook for the global export thermal coal market,” New Hope’s managing director Shane Stephan said.
He also stated that New Hope remains committed to securing approval for the continuation of the New Acland mine and, in doing so, being able to provide ongoing employment for the circa 700 jobs reliant on its operations.
Pitt Capital Partners is acting as corporate advisor and McCullough Robertson is the legal advisor to New Hope.