MacCap resurrects South32’s Eagle Downs sale
BHP’s blockbuster sale of its Queensland coal mines, Daunia and Blackwater, is already coaxing out other deals in the sector.
Eagle Downs has been a tough asset to sell for South32. Robert Rough
Street Talk understands ASX-listed miner South32 has instructed its adviser, Macquarie Capital, to revive attempts to sell its 50 per cent stake in Queensland’s Eagle Downs coking coal mine. And the bankers have wasted no time, teeing up meetings with prospective suitors this month.
Tyre-kickers are being told South32 would open a data room for Eagle Downs as early as the first week of November. That should eventually be followed by a sale process, although the bid timetable is yet to be formalised.
Of note, South32’s joint venture partner, Chinese steel giant Baowu, has separately held informal talks with prospective buyers in recent weeks.
The duo tapped Macquarie as a joint sell-side adviser back in 2021, but failed to land an exit. South32’s annual report states the miner received non-binding indicative bids for Eagle Downs in December 2021 and negotiated for more than a year, before its preferred bidder eventually pulled out in April 2022.
Sources said South32 has its fingers crossed for better luck this time around. That’s down to two factors. First, BHP’s $US3.2 billion sale of Blackwater and Daunia has shown there’s still plenty of appetite from bidders and lenders for coal assets. And second, the project seems to be finally getting over the onerous contracts for rail, port, power and water that have plagued it for several years.
Make no mistake, Eagle Downs is expected to fetch a much smaller price tag than Blackwater and Daunia. And it won’t be an easy sell, given it is undeveloped, has a history of holding expensive
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