Cockatoo Coal, an Australian coal producer, has agreed to offload 30% interest in Hume Coal to POSCO Australia in a A$9.74m ($9.39m) deal.
The sale of the project is said to be in line with company’s plan to focus on its core project, Baralaba.
In addition, Cockatoo will regain 13.26% ownership in the company held by POSCO by cancelling 34.8 million Cockatoo Coal shares.
Commenting on the divestment, Cockatoo Coal managing director Andrew Lawson stated that the sale was a part of company’s strategy to offload non-core assets to generate cash inflows in the near term.
POSCO, meanwhile, has granted a non-binding Letter of Intent to the company to procure 1 million tons per annum of metallurgical coal from the Baralaba expansion project following the expansion.
POSCO Australia managing director Soo-Cheol Shin remarked: "The purchase by POSA of the remaining 30% interest in Hume Coal reflects POSCO’s desire to focus on a 100% owned operation in preference to holding a broad interest in Cockatoo’s portfolio of projects that POSA’s current shareholding in Cockatoo provided."
The agreement subject to regulatory approvals is expected to be executed by August 2013.