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Australia’s Bandanna attracts Indian, Chinese suitors

Australia’s Bandanna attracts Indian, Chinese suitors
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First Published: Mon, Apr 18 2011. 01 41 PM IST
Updated: Mon, Apr 18 2011. 01 41 PM IST
Melbourne: Australian coal explorer Bandanna Energy is attracting interest from Chinese, Indian and other potential suitors as it prepares to short-list bidders for the company in a potential $1.4 billion deal, sources said on Monday.
Feasibility studies on Bandanna’s key projects were expected to be completed this week, one of the sources close to the transaction said, which would pave the way for indicative bids.
Indicative bids had been originally due by the end of last month, but the feasibility studies have delayed the process, sources said. It is expected the bids will follow shortly after the studies are completed.
About 10 bidders were expected to make the short-list, including four Indian bidders, two Chinese and possibly Xstrata and Rio Tinto , a second source told Reuters on Monday.
A third source confirmed there was strong Indian interest in the assets but did not name the bidders.
A Bandanna spokesman declined to comment.
Bandanna, which holds coal exploration permits in the Bowen and Galilee basins in the northeast Australian state of Queensland, last year appointed UBS to advise on a strategic review of the company’s funding requirements which it said could involve the partial or total sale of its assets.
Australia’s Linc Energy last year agreed to sell its Galilee coal project to Adani Enterprises in a cash and royalty deal worth $2.7 billion, marking the largest single mine investment by an Indian firm into Australia.
In a separate deal, India’s GVK Power and Infrastructure is also looking at the acquisition of two Australian coal mines owned by Hancock Prospecting, two sources with direct knowledge said.
Other Indian firms looking at Australian coal assets include Reliance Power , state-owned consortium International Coal Ventures (ICVL), Aditya Birla and NTPC .
Indian firms are looking to secure overseas coal supplies to fuel power plants in India, which aims to halve its nearly 14% peak-hour power deficit within two years.
Bandanna could fetch A$800 million ($845 million) to A$1.5 billion, according to analysts and local media reports.
Xstrata and Rio Tinto were not immediately available for comment.
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First Published: Mon, Apr 18 2011. 01 41 PM IST