Private placement in Universal Coal by Hong Kong-based investor

17 July 2012

Minter Ellison advised new client Power Origin Developments BVI, an entity controlled by Hong Kong-based mining, minerals and resources investor Yat Hoi Ning, on its private placement in ASX-listed Universal Coal plc. Under the deal, Power Origin will acquire equity in Universal Coal in two tranches, worth around A$7 million and A$3 million respectively. The placement gives Power Origin a 19.99 per cent stake in the company and means Universal Coal will have secured nearly half of the equity it needs for its A$50 million Kangala thermal coal project in South Africa.

The placement included a balanced suite of rights that secure the investor more than just a foothold in the issuer, allowing the investor to protect the strategic nature of its investment through input into governance and involvement in future equity raisings.

Michael Gajic (senior associate, Sydney) led the transaction with partner James Philips.

"Strategic placements such as this can benefit both parties, giving the investor involvement in the company's development and providing the issuer with access to capital and ongoing support." Michael Gajic said. "They are an increasingly common approach for junior minors who are facing subdued commodity prices and tight access to capital markets."