Denham-backed Pembroke buys Australia coal field

Peabody said in a statement that it would receive immediate cash proceeds of A$65 million, with a further A$22 million to come before the end of the third quarter once certain approvals are granted. The remaining proceeds are tied to the sale of assets held by the Coppabella-Moorvale joint venture, also based in Queensland, which requires approval from the JV partners.

The primary asset in the transaction comprises metallurgical reserve tenements in the Bowen Basin, with proven and probable reserves of around 165 million tons. Peabody has six active mining operations in Queensland and none of these are currently for sale.

Sales from the company's Australian business - which includes three mines in New South Wales as well as the Queensland-based assets - amounted to 35.8 million tons of metallurgical and thermal coal in 2015, while it controls 861 million tons of coal reserves. While the US operations have filed for bankruptcy, the Australian business remains solvent.

Peabody recently posted a net loss of $165.1 million for the first three months of 2016, largely unchanged from the same period in 2015, although revenue dropped to $879.8 million from $1.4 billion. Total liabilities stood at $10.7 billion, including $6.8 billion in long-term debt. Full-year revenue for 2015 came to $5.6 billion, down from $6.8 billion, while the net loss grew to $1.9 billion from $787 million.

Denham seeded Pembroke with $200 million in 2014 for the development of a portfolio of coal assets across Australia, New Zealand and Indonesia. The company is led by Barry Tudor, who as CEO of Gloucester Coal completed a string of acquisitions to triple its market capitalization in the space of three years. Senior management departed when Gloucester was bought by Yanzhou Coal, but the team stayed together to found Pembroke.

Denham makes direct investments in the energy and resources sectors, including businesses involving mining, power generation and oil and gas, across the globe and all stages of the corporate lifecycle.

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• Topics
• Australasia
• Buyouts
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• Denham Capital
• Australia
• Commodities