18 October 2023

Whitehaven Coal to acquire BMA’s Daunia and Blackwater coal mines

ASX Announcement

 

Investor Presentation

 

Whitehaven Coal is pleased to announce it has executed definitive sale agreements with BHP Group and Mitsubishi Development Pty Ltd to acquire 100% of both the Daunia and Blackwater coal mines in a highly attractive and transformative acquisition.

 

Acquisition highlights

• Whitehaven to acquire 100% of the Daunia and Blackwater metallurgical coal mines from BMA for an aggregate cash consideration of US$3.2 billion¹ comprising:
  • US$2.1 billion upfront consideration payable on completion, and
  • US$500 million, US$500 million and US$100 million in separate tranches of deferred consideration payable on the first, second and third anniversary of the completion date².

• In addition, contingent payments of up to US$900 million; comprised of three annual payments (payable on the date which is three months after the relevant anniversary of completion) dependent on realised pricing exceeding agreed thresholds³, with annual contingent payments capped at US$350 million.
• To be funded via a combination of available cash, a US$900 million bridge facility and cashflows of Whitehaven’s enlarged business over FY2025, FY2026 and FY2027.
• Highly attractive acquisition for Whitehaven and is expected to be materially earnings accretive⁴, with upfront and deferred payments together implying an acquisition multiple of 1.8x EV / FY2024F EBITDA using spot prices and 2.9x using broker consensus coal prices⁵.
• Delivers significant value upside with attractive growth opportunities in Queensland’s Bowen Basin, including synergies with Whitehaven’s Winchester South development project.
• Transforms Whitehaven into a metallurgical coal producer in line with strategy, with pro-forma managed Run of Mine (“ROM”) production of around 40 million tonnes⁶ per annum and pro-forma revenues of around 70% metallurgical coal and 30% thermal coal⁷.
• Consolidates Whitehaven’s position as the leading Australian ASX listed metallurgical coal producer, with multiple benefits from increased diversification and scale.
• Increases exposure to attractive high-growth market regions including India and Southeast Asia, while strengthening and diversifying end market exposures currently focused on Japan, South Korea and Taiwan.
• Completion of the Acquisition is expected in the June 2024 quarter subject to satisfying conditions precedent including regulatory and merger control approvals.

 

For more information, please refer to the ASX announcement.

 

1 Subject to customary completion adjustments

² The profile of deferred payments may change based on adjustments to be calculated at the time of completion

³ Contingent payments paid from 35% revenue share, capped at a total of US$900m over three years post completion. Subject to average realised prices achieved by the Assets exceeding respective thresholds of US$159/t in the 12 month period 12 months post completion, US$134/t in the 12 month period 24 months post-completion and US$134/t in the 12 month period 36 months post completion. Annual payments are capped at maximum of US$350m

⁴ Based on spot pricing (at 17 October) and Whitehaven management estimates, FY2024 pro-forma EPS accretion is ~160%

⁵ Based on Whitehaven management estimates; spot pricing as at 17 October 2023

⁶ Managed ROM production based on mid-point of Whitehaven’s FY2024 guidance and FY2024 life of mine plans for the Assets

⁷ Based on FY24F pro-forma as per Whitehaven management estimates and assuming spot pricing

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