Yancoal fails to raise shareholder enthusiasm

PERTH (miningweekly.com) – ASX-listed Yancoal Australia’s pro-rata renounceable entitlement offer to raise funds for the acquisition of mining major Rio Tinto’s Coal & Allied assets, has failed to gain traction with shareholders, with only 42.8% of the shares on offer being taken up.

The 23.6-for-1 entitlement offer was launched in early August, and Yancoal’s holding company Yanzhou had committed to subscribe for A$1-billion of its entitlement under the offer.

Yancoal on Tuesday announced that it had raised just over $1-billion through the entitlement offer, as opposed to the targeted $2.35-billion, with shareholders taking up only 10-billion of the 23.4-billion shares on offer.

Following the close of the entitlement offer, some 13.4-billion entitlements were offered to eligible institutional investors through a bookbuild, with applications received for around $59-million worth of new shares.

Yancoal told shareholders that the entitlements for new shares not taken up under the shortfall bookbuild, representing some $1.28-billion, will now be allocated to the underwriters, China Shandong Investment, Cinda International HGB Investment, and Glencore Coal.

Funds raised would go towards financing the purchase of the Coal & Allied assets, which Yancoal would acquire from major Rio Tinto for $2.69-billion.