An institutional investor and a group of ultra high-net-worth individuals have taken a punt each way on a multi-billion dollar steel project.
Boulder Steel recently emerged from voluntary administration by raising $2.5 million, following a joint venture agreement and shareholder deed to build the Euroa steel plant in Gladstone, Queensland, priced upwards of $2.5 billion.
Sydney-based private equity business Liverpool Partners supported the capital raising and now holds about a 10 per cent interest in the company.
Perth-based Otsana Capital managing director Faldi Ismail, who was instrumental in pulling the company out of administration, is Boulder Steel’s executive chairman.
Liverpool Partners managing director Jonathan Lim told Business News the new shareholders who contributed to the raising were clients who supported the company’s two-options strategy, meaning they were open to other investment opportunities if the steel plant proved unviable.
The new investors Liverpool Partners brought in collectively make up 62 per cent of Boulder Steel's shareholding.
“Part of the attraction here was the ability to explore opportunities outside of the joint venture for good businesses,” Mr Lim said.
“The IP around the steel plant is quite speculative but does present quite a significant upside.
“The board and shareholders are quite open to looking at any opportunities in sectors outside of steel and resources in the instance that the joint venture doesn’t come off.”
Boulder Steel is finalising an environmental impact study and intends to make a decision on capital raising requirements for the steel plant within the next 24 months.
Mr Lim said if the steel plant project did progress, a capital raising would be staged and likely involve equity investments in exchange for an off-take agreement.
“We’ve got good support from our shareholder base and there’s reasonably deep pockets to assist with capital raising,” he said.
The steel plant’s other 50 per cent joint venture partner is made up of engineers originally involved in designing the project.
Mr Lim said the Boulder Steel Rescue Group was “certainly very passionate” to develop the project, which has the potential to employ 2,200 people.
