PALMER SECURES $1.2B AFTER CANCELLING IPO

Written on the 6 June 2011

PALMER SECURES $1.2B AFTER CANCELLING IPO

CLIVE Palmer has secured an extra $1.2 billion in funding from a major Chinese Bank just one day after cancelling his mining company’s long-awaited Initial Public Offering (IPO).

Citing poor market conditions, Palmer yesterday pulled Resourcehouse Limited’s float on the Hong Kong Stock Exchange.

Less than 24 hours later the Gold Coast-based mining magnate proved the company can fund its $8 billion Western Australian coal mine project without going public.

“We have struck back quickly with a deal which ensures the project’s viability and puts to rest the unfounded criticism of some media and analysts,” says Palmer.

“China Exim Bank has confirmed to China First Pty Ltd, a wholly owned subsidiary of Resourcehouse Limited, their willingness and interest to finance the project.

“The facility amount has now increased to 85 per cent of the total amount of the construction contract after originally providing for 70 per cent. The extra 15 per cent means the funding has increased from $5.6 billion to $6.8 billion.”

Palmer was likely to raise $3.6 billion for the coal and iron ore conglomerate he founded in 2009, but the withdrawal now represents the largest cancelled IPO in the world this year.

He says the international road show leading up to the float garnered extensive interest from companies seeking direct investment, but still maintains the float was pulled due to poor market conditions.

“After closing off the IPO as a result of volatile market conditions, we are still in a position of strength to advance this project,” he says.

“As a result of the Global Offering, we also have a number of international companies who wish to make direct investment into Resourcehouse for equity in the company, giving us confidence that we will fully fund the project.

“This is a win-win-win for Queensland in terms of job creation, export earnings and mining royalties.”

The China First Project includes a large scale thermal coal mine in the undeveloped Galilee Basin coal region near Alpha, west of Emerald. The complex will include four underground mines, two surface mines and associated coal handling and processing facilities.

The mine will be linked to a new coal terminal at Abbot Point near Bowen by a new 471km standard gauge, heavy haul railway line. The mine and associated infrastructure will create 6000 jobs during construction and 1500 during operation.


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