Shares in West Perth-based resources company Straits Resources Ltd have jumped more than six per cent after the company unveiled a plan to restructure the business and demerge from its coal-focused Asian subsidiary.
Shares in West Perth-based resources company Straits Resources Ltd have jumped more than six per cent after the company unveiled a plan to restructure the business and demerge from its coal-focused Asian subsidiary.
The copper and gold miner plans to dual-list its 51 per cent subsidiary Straits Asia Resources Ltd on the Australian stock exchange and distribute its interest to shareholders.
Straits will also transfer its two remaining coal assets in Brunei and Madagascar into the Straits Asia portfolio.
"We believe the new corporate structure will underpin the future growth and outlook for both Straits Resources and Straits Asia," Straits chief executive milan Jerkovic said in a statement.
"The current structure does not provide the most efficient means for the pursuit of attractive acquisition opportunities."
Investors warmed to the restructure, pushing Straits shares 39 cents or 6.28 per cent higher to $6.60 at the close.
Mr Jerkovic is expected to become an executive with the separated coal company, while executive director Martin Purvis would remain with Straits.
Straits Asia listed on the Singapore stock exchange in November 2006 with the Sebuku coal project in Indonesia as the company's flagship operation.
The company added to the portfolio through the acquisition of the Jembayan thermal coal project in East Kalimantan, Indonesia, in December.
Straits said the demerger would allow the companies to "clearly focus on the pursuit of either specific coal or diversified growth opportunities without the encumbrances of parent entity implications".
The plan is expected to be subject to shareholder and regulatory approvals, Straits added.
Straits operates the Whim Creek copper operation in Western Australia, the Tritton copper project in New South Wales, as well as the Mount Muro gold mine in Indonesia.
The annoucement from Straits Asia Resources is pasted below:
Straits Asia Resources Ltd wishes to announce that its majority shareholder, SRL, has today announced the outcome of a strategic review of its group structure.
The purpose of this strategic review was to seek ways to unlock value for SRL's shareholders.
The proposed restructure results in the creation of two distinct platforms to drive the growth of both of its coal businesses and its metals businesses respectively.
As part of the proposed restructure, SAR will be repositioned as a global coal vehicle, independent of SRL.
To this end, SAR will have the opportunity to evaluate the potential acquisition of coal assets currently held by SRL. SAR will provide further information and, where necessary, seek relevant board, shareholder and regulatory approvals in due course.
Further details on the proposed restructure, including the mode of implementation to be adopted by SRL and its impact on SAR, will be provided in the coming months.
Should SRL shareholders approve the distribution-in-specie of SAR shares, SAR will seek a dual listing on
the ASX in order to facilitate the trading of SAR shares by Australian shareholders.
In addition, it is expected that the senior management teams of SAR and SRL will be reorganised to reflect
the creation of two separate platforms and businesses following the restructuring.
Execution of the restructure will be conditional on various board, shareholder and regulatory approvals being
obtained by both SRL and SAR.
The proposed restructure is being conducted with the full support of the Board of SAR and in this regard, SAR has appointed a team of its managers to assist in execution.
Milan Jerkovic, Chief Executive Officer of SRL, said: "We are working towards delivering greater value to our shareholders.
The current structure does not provide the most efficient means for the pursuit of attractive acquisition opportunities. We believe the proposed structure will underpin the future growth and outlook for both Straits Resources and Straits Asia.
I am confident that the Boards of both companies will work in close consultation to execute the restructure to the benefit of their respective shareholders."
Macquarie Capital (Singapore) Pte Ltd is the Sole Global Coordinator, Bookrunner and Underwriter for, and Macquarie Capital (Asia) Pte Ltd is the Issue Manager for, the Initial Public Offering of the company.
This announcement has been prepared and released by the company.
