Bowen Coking Coal Ltd (BCB) and MPC Lenton Pty Ltd (MPC), a fully-owned subsidiary of Formosa Plastics Group, finalized their previously announced transaction on July 5, 2024. MPC acquired a 10% stake in the Broadmeadow East Mine for cash plus royalties, a project previously 100% owned by BCB’s subsidiary, Coking Coal One Pty Ltd (CCO).

Completion of the transaction followed the successful fulfillment of all conditions precedent, including approvals from the Foreign Investment Review Board (FIRB) and the State Minister for Resources.

The primary objective of this transaction was to integrate the Broadmeadow East Mine into the Lenton Joint Venture, capitalizing on its proximity to the Burton mining complex and the anticipated operational synergies. The Burton mining complex, owned and operated by the Lenton Joint Venture, in which BCB holds a 90% indirect interest and MPC holds a 10% interest, includes the Burton Coal Handling and Processing Plant, the Mallawa Train Loadout Facility and Haul Road, the Kerlong Accommodation Village, and the future Lenton Coal Project.

The recently completed transaction has deviated in structure from the original plan and announcement. Coking Coal One Pty Ltd (CCO) sold a 10% interest in the Broadmeadow East Mine to MPC, as initially envisioned. CCO opted to retain a 90% ownership stake in the Broadmeadow East Mine, deviating from the initial plan of selling it to affiliated company NLC. This has resulted in the creation of an unincorporated joint venture between NLC, CCO, and MPC, encompassing both the Burton/Lenton Project and the Broadmeadow East Mine. They have dedicated their respective interests in the assets of both the Project and Mine to this joint venture. The Lenton Joint Venture Agreement will be revised to incorporate the latest terms.

In summary, BCB’s indirect joint venture interest remains as originally planned: 90% held by BCB and 10% by MPC. The agreed Effective Economic Date of the transaction remains May 1, 2023. On July 5, 2024, Bowen Coking Coal Ltd  finalized the sale of a 10% stake in the Broadmeadow East Mine to MPC Lenton Pty Ltd, a subsidiary of Formosa Plastics Group. BCB received A$13 million in cash from this transaction, of which US$7 million will go towards repaying a portion of BCB's senior debt facility. This strategic move not only strengthens BCB's financial position but also aligns with its broader operational strategy within the Lenton Joint Venture, optimizing synergies and operational efficiencies across its mining assets.

Daryl Edwards, CEO of BCB, expressed his satisfaction with the successful completion of the transaction. He highlighted that the consolidation of ownership and operating structures for the Broadmeadow East Mine, the Burton Mine, and the planned Lenton Coal Project will bring substantial operational flexibilities and efficiencies to BCB and MPC. Mr. Edwards emphasized the significance of achieving this milestone, underscoring the strategic benefits it will deliver to the organization.

He expressed gratitude for the support and collaboration of Formosa Plastics Group and its advisors during the transaction with BCB. Formosa Plastics Group, a prominent multinational conglomerate based in Taiwan, facilitated a smooth process through its subsidiary MPC. The speaker looks forward to achieving significant success in their joint ventures under the new arrangement.