Coalspur receives $15m takeover offer

Shares in Canada-focused coal developer Coalspur Mines surged after the company announced it had received a $15 million takeover proposal from KC Euroholdings.

Under the terms of the Australian scheme of arrangement, Euroholdings will acquire all outstanding Coalspur shares for a cash payment of 2.3 cents per share, representing a 44 per cent premium over the company’s closing price yesterday.

Coalspur is dual-listed on the ASX and the TSX.

Euroholdings, the parent company of Kameron Collieries, which owns the Donkin coal mine in Nova Scotia, will fund the acquisition form internal cash sources.

Coalspur said the transaction was the culmination of a strategic review process that was flagged in June last year.

Coalspur chief executive Gill Winckler said the company was pleased to have entered into an agreement with Euroholdings after a running a comprehensive process.

“Despite the challenging environment for thermal coal exporters globally, and limited capital market access for single asset developers of thermal coal projects, we have managed to run a competitive process and secured a positive outcome for all stakeholders,” Mr Winckler said.

He said the agreement was the best option for the company’s shareholders as it approaches due-date for the repayment of its debts with EIG Global Energy Partners and Borrowdale Park.

The board has unanimously approved the deal and has recommended shareholders vote in favour of the scheme.

Euroholdings has also agreed to take on Coalspur’s EIG-related debt and is in the process of securing a deal to take ownership of the debt Coalspur owes Borrowdale.

As a result of the scheme of arrangement, Coalspur has flagged a non-cash impairment charge in its full-year accounts, but did not specify the exact amount.

Coalspur is being advised by Deutsche Bank, and is being legally counselled by Perth-based Hardy Bowen Lawyers.

Coalspur shares were up 25 per cent to 2 cents per share at 12:15pm.