Bandanna Energy cancels sale process after bids fall short - Report

Saturday, 08 Oct 2011

Dow Jones quoted a person familiar with the matter said Bandanna Energy Ltd has failed to ride the wave of consolidation taking place in Australia coal sector closing its books to potential suitors after a sales process didn't generate adequate bids.

It comes just six weeks after Bandanna told investors it was in discussions with several parties over possible transactions including asset sales, and had received new interest from companies with big mining operations in Australia and overseas. Bandanna which holds several exploration permits in the Bowen and Galilee basins of coal-rich Queensland State appointed UBS AG earlier this year to advise on the sales process.

The person told Dow Jones Newswires that "There's no longer a formal process going on"

Bandanna failed sales process underscores how buyers are prioritizing deals for companies with producing mines and the ability to export coal to high-growth markets in North Asia in the near term.

(Sourced from Dow Jones)

Race for resources - GMR opts out from Bandanna Energy coal mines

Wednesday, 03 Aug 2011 |By ET

GMR Infrastructure has opted out of the race to acquire Australia based Bandanna Energy's coal mines after it found that a new local law prohibited foreign companies from mining on agricultural land.

A person close to the development said that "The transaction is not working out. While doing due diligence, GMR found that the regulation would impact the mining lease.”

In June, GMR, a developer of airports, power stations and roads said that it had progressed into the second stage of the transaction process for acquiring the mines, whose valuation was expected to range between USD 850 million and USD 1.5 billion.

Other companies in the Bandanna shortlist include India's largest power producer NTPC, Jindal Power and Steel and Aditya Birla Group's Essel Mining, besides four Korean and Chinese firms.

Another person close to the transaction said that "The coal in Bandanna is largely underground and the subsequent capital expenditure of USD 2.3 to USD 3 billion on setting up 500 km of railway line and other infrastructure is also of concern to companies bidding for project.”

India's Jindal Steel shortlisted for Bandanna bid-executive

Thu Jul 28, 2011

NEW DELHI, July 28 (Reuters) - India's Jindal Steel & Power has been shortlisted for a bid by Australian coal explorer Bandanna Energy , its deputy managing director Sushil Maroo said on Thursday.

Bandanna said earlier this month it had asked potential bidders for the company to provide binding offers after shortlisting parties as part of a strategic review. The proposed bids included individual project assets and corporate-based transactions.

Indian state-run power utility NTPC has already said it has been shortlisted.

India's Aditya Birla, JSW Steel , and China's CITIC Resources Holdings are among interested parties looking at the company, sources had told Reuters in May.

(Reuters)

Indian suitors eye Australia's Premier Coal

With Lanco looking to build on its recent Griffin Coal purchase, a new turf war is set to emerge between Indian suitors and some Chinese firms for the $500m assets of Premier Coal.

Mar18, 2011
By Shivom Seth

MUMBAI - Following Lanco Infratech $830 million for Griffin Coal's adjacent mines last year, Premier coal mine, which supplies Western Australia's electricity network, is up for grabs.

In 2007, UBS valued Premier Coal at $500m. Officials at Lanco, who are also said to be eyeing Premier Coal, said that owning both the mines ``made perfect sense'' as the company could ensure efficiencies of scale.

The mine is located near Collie, 200 km south of Perth. India's GVK Power is also said to be amongst the forerunners in the bid.

A reliable company official said that since GVK has lost out to Lanco in the Griffin auction race, it was very keen to ``hold on to this prize catch''.

Reports indicated that last year, the Perth-based Wesfarmers considered adding Premier Coal to the Griffin Coal pitch, but certain circumstances had ensured that the company pulled out of the bidding process in September.

Wesfarmers executives were reportedly shocked at how much Lanco was willing to pay for Griffin. Now, with Lanco looking to build on its recent purchase, a new turf war may emerge between Indian suitors and some Chinese firms.

Although the world's second-largest economy is at a strategic inflection point in terms of its commitment to become more energy efficient and reduce the carbon intensity of its economy, coal will continue to play an important part, analysts said and market sources indicate that several Chinese firms have shown interest in the project

Though China's new five-year plan proposes to cap the country's energy use at 4 billion tonnes of coal equivalent a year by 2015 (up from 3.25 billion in 2010), companies are scouting Australian shores.

Wesfarmer officials have been quoted as saying that they fielded enquiries from both Chinese and Indian firms.

Interestingly, three Indian corporates have thrown their hats into the ring for the coal assets of one of Australia's largest thermal coal explorers, Bandanna Energy.

In a deal reportedly valued at $1.5 billion, GVK, state-owned consortium ICVL and Reliance Power are said to have bid for the assets. Analysts said that the Bandanna Energy is estimated to have reserves of over 1.3 billion tonnes of thermal coal.

Bandanna Energy had initiated an auction process to sell the assets and had mandated UBS to advise it. The last date for submission of bids is March 31, 2011. By then, it will be action stations. (sourced :mineweb)

3 Indian cos in race to bid for Bandanna Energy's coal assets

Mar18, 2011,03.56AM IST,
By Vinu Lal & MV Ramsurya, ET Bureau

BANGALORE/MUMBAI: Three top Indian companies have joined the race to bid for the coal assets of one of Australia's largest thermal coal explorers - Bandanna Energy - in a deal that could be valued at $1.5 billion. GVK, state-owned consortium ICVL and Reliance Power have shown early interest in bidding for the assets estimated to have reserves of over 1.3 billion tonnes of thermal coal, said people familiar with the development.

Bandanna Energy has initiated an auction process to sell the assets and has mandated UBS to advise it on the transaction. The last date for submission of bids is March 31, 2011.

An information memorandum circulated among bidders, a copy of which is with ET, indicate that the company has $750 million worth assets. A feasibility study on some of its coal assets completed last month, soon after which the sale process was kicked off.

Thermal coal is used by utility coal-fired power plants. Expanding capacities by companies in various industries have led to a rise in power consumption. While India is also rich in thermal coal deposits, high ash content in local coal and reduced production by Coal India, has prompted most user companies to scout global resource rich nations to tap for coal assets.

A GVK spokesperson did not reply to an email query sent by ET. Senior officials from GVK are currently in Australia. A Reliance Power spokesman denied the company is considering bidding for the coal assets. A senior ICVL executive said that the company was evaluating all options with respect to coal assets in Australia. "We have a board meeting scheduled on March 21 where we will take a call on all bids," he added. ICVL comprises of mining major NMDC, utility NTPC , steelmakers SAIL and Rashtriya Ispat Nigam , and Coal India.

Bandanna chairman Jeremy Barlow did not respond to an email query.

Bandanna would look at selling both minority or majority stake in its ongoing projects as well as explore the possibility of selling the entire entity as a whole. According to a person close to the bidder, current discussions initiated by the banker relate to a possible entity level sale rather than piecemeal project-level sale. "It is typical for a project as large as this to initially explore entity level interests than piecemeal selloffs," said the person.

Bandanna Energy has exploration licences for 16 blocks in the Bowen and Galilee Basins in Queensland. The company also has shale gas assets in the region. Six founder shareholders led by chairman Jeremy Barlow, own close to 70% stake in the listed Bandanna Energy.

Local demand for coal reported a compounded annual growth rate of over 8% during a five-year period till FY2010, to reach almost 600 million tonnes last year. The demand from the power sector, which accounts for over 70% of the country's overall coal demand, has been a major driving force, said a recent report by ICRA.