The largest shareholder in Dartbrook coal mine has backed a recent joint venture offer to facilitate the mine's recommissioning.
Trepang Services, the largest shareholder in Darbrook's owner Australian Pacific Coal (AQC), announced on Friday morning it was backing a joint venture offer made to AQC on Wednesday.
The offer - made by Queensland coal company, Tetra Resources, and coal management firm Javelin Private Group LLC - proposes Tetra would hold a 40 per cent share in Dartbrook, along with marketing and loan agreements between Javelin and AQC.
The Tetra/ Javelin offer was the latest development in AQC's ongoing effort to recommission the shuttered mine by the end of 2023 and followed three separate offers made to AQC this year, two involving coal magnate Nathan Tinkler.
Trepang's announcement was at odds with previous indications by AQC, who told the market on Wednesday they were "working towards a binding agreement" with Matt Latimore's M Resources, following the company's 50:50 joint venture offer.
"At this stage no agreement has been reached but [AQC], Trepang and M Resources have each agreed to continue discussions to see if a transaction can be structured, with the parties reserving all rights," AQC said in a presentation made available to the market Wednesday.
AQC is also undertaking an entitlement offer allowing investors to purchase extra shares in the company looking to raise $100 million in capital. Around $70 million of the money raised is slated to go toward paying off existing debts.
"Trepang believes the Joint Venture proposal by Tetra/Javelin promises the highest value and the most accretive outcome for AQC shareholders and for the development of the Dartbrook project," Trepang said on Friday.
"As the largest creditor and shareholder of Australian Pacific Coal, Trepang Services is firmly of the view that the joint venture proposal received from Tetra Resources and Javelin Private Capital Group is superior to the other proposals currently being considered by AQC, in particular the highly dilutive entitlement offer proposed by AQC.
"AQC's current plan results in the economic interest of existing shareholders in AQC being slashed to an immaterial level of approximately 7 per cent, before the mine restart is funded (which would almost certainly result in further dilution).
"This contrasts to the proposal tabled by Tetra/Javelin, which would result in existing AQC shareholders retaining a 60 per cent economic interest in the project, and this includes the mine restart being fully funded."
AQC have a debt of around $60 million owing to Trepang and its owners John "Foxy" Robinson and Nicholas Paspaley.
Trepang said on Friday that in order to progresses the Tetra/ Javelin proposal it had "agreed to a moratorium on its debt, and a funding agreement between AQC and Trepang Services and its associated parties."
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