Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — Merger or Acquisition (August 2017)
38 slides from Yancoal Australia's merger presentation, Aug 2, 2017
Slide 1: Creating A Leading Australian Pure-Play Coal Producer
For personal use only Creating A Leading Australian Pure-Play Coal Producer
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Acceptance For personal use only By attending an investor presentation or briefing, or accepting, accessing or reviewing this presentation you acknowledge and agree to the terms set in this Important Notice and Disclaimer. Summary information This presentation is issu
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Effect of rounding For personal use only A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figu
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer Financial Data For personal use only Investors should note that this presentation contains pro forma historical and forecast financial information. The pro forma and forecast financial information, and the historical information, provided in this presentation is for i
Slide 5: Table of Contents
Table of Contents For personal use only Section 1: Transaction Overview Section 2: Equity Raising Overview Section 3: Investment Highlights Section 4: Pro Forma Group Overview Appendices 5
Slide 6: Section 1: Transaction Overview
For personal use only Section 1: Transaction Overview
Slide 7: Coal & Allied Transaction Overview
Coal & Allied Transaction Overview Yancoal has entered into agreements to acquire 100% of the shares in Coal & Allied from Rio Tinto For personal use only and a 32.4% interest in HVO from Mitsubishi Coal & Allied • Yancoal Australia Ltd (“Yancoal”) entered into a binding agreement on 24 January Acqu
Slide 8: Glencore Transaction Overview
Glencore Transaction Overview Yancoal and Glencore to establish a 51% (Yancoal) / 49% (Glencore) unincorporated joint venture For personal use only for HVO Pro Forma Mine Ownership Transaction • Glencore will acquire Mitsubishi’s 32.4% interest in HVO directly subject to Mitsubishi’s Hunter Consider
Slide 9: Transaction Funding Overview
Transaction Funding Overview Yancoal to launch an up to approximately US$2.5 billion equity raising to fund the Coal & Allied For personal use only Acquisition, with the funding for the Mitsubishi Tag-Along Acquisition delivered by the Glencore Transaction Funding Solution Sources and Uses A Coal &
Slide 10: Balance Sheet Recapitalisation
Balance Sheet Recapitalisation The up to approximately US$2.5 billion equity raising, conversion of US$1.8 billion SCNs by For personal use only Yanzhou(5) and US$429 million cash consideration from Glencore will significantly improve Yancoal’s credit profile US$ Million Unless Specified Current Adj
Slide 11: Investment Highlights
Investment Highlights For personal use only Creating Australia’s largest pure-play coal producer with majority ownership in three flagship thermal coal mines in Australia Potential to unlock substantial synergies with incremental value from the Glencore Transaction Sustainable capital structure
Slide 12: Section 2: Equity Raising Overview
For personal use only Section 2: Equity Raising Overview
Slide 13: Equity Raising Overview
Equity Raising Overview Entitlement Offer • Approximately US$2.35 billion renounceable entitlement offer with rights trading (“Entitlement Offer”) For personal use only • Approximately US$2.3 billion underwritten or committed in total – Yanzhou (Yancoal’s majority shareholder) has committed to subsc
Slide 14: Equity Raising Timetable
Equity Raising Timetable For personal use only Event Date Announcement of the Entitlement Offer and the Placement 10.00pm, Tuesday, 1 August 2017 Shares quoted on an 'ex' basis (Entitlement trading on ASX begins (deferred settlement basis)) Friday, 4 August 2017 Record Date 7.00pm on Monday, 7 Augus
Slide 15: Summary of Risk Factors
Summary of Risk Factors There are various risks associated with an investment in Yancoal, and many of these are outside For personal use only the control of the Company. Please refer to the expanded Risk Factors in the Entitlement Offer Booklet for further detail Key Risk Factors Acquisition Risks C
Slide 16: Section 3: Investment Highlights
For personal use only Section 3: Investment Highlights
Slide 17: Investment Story
Investment Story For personal use only (A) Transformational Acquisition Creating Australia’s largest pure-play coal producer Owner of three flagship thermal coal mines in Australia Potential to unlock substantial synergies, with incremental value to be delivered by the Glencore Transaction (B)
Slide 18: Creating Australia's Largest Pure-Play Coal Producer
Transformational Acquisition Creating Australia’s Largest Pure-Play Coal Producer Compelling Investment Opportunity Strong Industry Fundamentals Top 3 by reserves and production and the largest pure-play Australian coal producer For personal use only Marketable Coal Reserves (100% basis, Bt) Yancoal
Slide 19: Owner of Three Flagship Thermal Coal Mines in Australia
Transformational Acquisition Owner of Three Flagship Thermal Coal Mines in Australia Compelling Investment Opportunity Strong Industry Fundamentals Yancoal will own majority interests in 3 of the 10 largest thermal coal mining operations in For personal use only Australia Energy Content by Major Exp
Slide 20: Potential to Unlock Substantial Synergies
Transformational Acquisition Potential to Unlock Substantial Synergies Compelling Investment Opportunity Strong Industry Fundamentals Coal & Allied Acquisition to unlock A$120 – 145 million of potential operational synergies For personal use only annually between Yancoal and Coal & Allied(1) Potenti
Slide 21: Incremental Value Potential from Yancoal and Glencore Partnership
Transformational Substantial Incremental Value Potential from a Acquisition Compelling Investment Opportunity Yancoal and Glencore Partnership in the Hunter Valley Strong Industry Fundamentals For personal use only Proximity of Glencore and Coal & Allied Assets Sources of Synergies 1 2 Liddell Mt Ow
Slide 22: Sustainable Capital Structure and Future Cash Flow Generation
Transformational Sustainable Capital Structure and Future Cash Flow Acquisition Compelling Investment Opportunity Generation To Support Deleveraging and Value Creation Strong Industry Fundamentals Sustainable pro forma balance sheet and portfolio optionality to support shareholder returns For person
Slide 23: Accretive Across Key Operational and Financial Metrics
Transformational Acquisition Accretive Across Key Operational and Financial Metrics Compelling Investment Opportunity Strong Industry Fundamentals Attractive investment proposition for shareholders For personal use only 1 Accretive Transaction Yancoal Yancoal Coal & Allied Pro Forma(1) Enterprise Va
Slide 24: HELE Plants to Drive Demand For High Quality Coal
Transformational Acquisition HELE Plants to Drive Demand For High Quality Coal Compelling Investment Opportunity Strong Industry Fundamentals Yancoal’s thermal coal products well placed to capitalise on the substantial build out of modern For personal use only super critical and ultra-super critical
Slide 25: NDRC Scheme Provides Coal Price Support for 2017
Transformational Acquisition NDRC Scheme Provides Coal Price Support for 2017 Compelling Investment Opportunity Strong Industry Fundamentals NDRC policy expect to support benchmark price of ~US$69-78/t going forward For personal use only NDRC Scheme for Domestic Coal Price for 2017 Newcastle FOB The
Slide 26: Section 4: Pro Forma Group Overview
For personal use only Section 4: Pro Forma Group Overview
Slide 27: Yancoal Pro Forma Organisational Structure
Yancoal Pro Forma Organisational Structure Yancoal Pro Forma Organisational Structure(1) For personal use only Other Yanzhou Coal Mining Management Agreement Yancoal International Yancoal Australia Ltd (Holding) Co. Management Agreement Watagan Mining Company Pty Ltd(2) Mines Ports Asset Ownership A
Slide 28: Pro Forma Operating and Financial Overview – Historical and Guidance
Yancoal Pro Forma Operating and Financial Overview – Historical and Guidance Historical Guidance For personal use only CY14 CY15 CY16 CY17 YTD(1) CY17 CY18 ROM Coal Production Mt 13.0 12.5 14.8 7.9 15 - 17 17 - 19 Yancoal(2)(5) Saleable Coal Production Mt 10.3 9.8 11.5 6.5 13 - 14 14 - 16 FOB Cash C
Slide 29: Yancoal Asset Summary
Yancoal Asset Summary Moolarben is a large scale thermal coal mine located in the Western Coalfields of NSW For personal use only Moolarben Yarrabee Stratford Duralie Middlemount Total NSW NSW NSW Location QLD QLD QLD Sojitz Korean 10.0% Yancoal Yancoal Consortium 100.0% 100.0% Peabody Yancoal Owner
Slide 30: Coal & Allied Asset Summary
Coal & Allied Asset Summary Yancoal will acquire majority interests in two of Australia’s largest thermal coal operations which For personal use only produce high quality thermal coal products in demand with blue chip customers in North Asia Hunter Valley Operations Mount Thorley Warkworth Total Loc
Slide 31: Appendix A: Reserves and Resources
For personal use only Appendix A: Reserves and Resources
Slide 32: Reserves and Resources
Reserves and Resources Reserves and Resources(1)(2) For personal use only Yancoal Glencore Transaction Coal & Allied(5) Yancoal Pro Forma Status Quo(3)(4) Adjustment 100% Attributable 100% Attributable 100% Attributable 100% Attributable Marketable Coal 346 274 834 541 N/A (102) 1,180 713 Reserves (
Slide 33: Appendix B: Selling Restrictions
For personal use only Appendix B: Selling Restrictions
Slide 34: Selling Restrictions
Selling Restrictions • The information in this presentation has been prepared to comply with the applicable requirements of the securities laws of Australia, New Zealand and the jurisdictions contemplated in Section 8.6 of the Entitlement Offer Booklet (Selling Restrictions). For personal use only •
Slide 35: Selling Restrictions (Cont'd)
Selling Restrictions (Cont’d) For personal use only Canada (British • Unless stated otherwise, all dollar amounts contained in this presentation are in Australian dollars. Columbia, Ontario – Statutory rights of action for damages and rescission and Quebec Securities legislation in certain of the
Slide 36: Selling Restrictions (Cont'd)
Selling Restrictions (Cont’d) For personal use only Canada (British – Certain Canadian income tax considerations Columbia, Ontario Prospective purchasers of the Entitlements and the New Shares should consult their own tax adviser with respect to any taxes payable in and Quebec connection with the
Slide 37: Selling Restrictions (Cont'd)
Selling Restrictions (Cont’d) For personal use only New Zealand • This presentation has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act). • The Entitlements and the New Shares in the Entitlement Offer are n
Slide 38: Selling Restrictions (Cont'd)
Selling Restrictions (Cont’d) For personal use only United Kingdom • This presentation is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of the FSMA) in the United Kingdom, (Cont’d) and these securities may not be offered or sold in the United Kingdom by
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