Jindal Steel has invested another $58 million into Gujarat NRE Coking Coal, adding an extra 726 million shares to its majority holding in the company.
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The Illawarra mining company announced the success of the first stage of its latest rights issue deal, which will significantly dilute shareholdings, to the Australian Securities Exchange on Wednesday night.
Jindal was given the chance to take up all its eligible shares in advance of other shareholders after it expressed interest in investing further in the company it now effectively runs and owns.
Part of the $58 million will be used to pay workers $6 million and free up $20 million to pay outstanding debts to creditors and suppliers. About $18 million will be used to run the company, while $14 million will be paid back to Jindal.
In a letter to the ASX, company secretary Shanjay Sharma requested Gujarat shares remain in a trading halt until today, to give it time to lodge several documents and start the second stage of the new shares deal.
Beginning today, other Gujarat shareholders will be able to purchase two new shares for every three they already hold, at 8¢ a share. Gujarat hopes this will raise $49.85 million in new capital, allowing them to pay an extra $10 million to creditors and invest a further $40 million into running Wongawilli and Russell Vale mines.
Meanwhile, the company’s environment and approvals manager, Dave Clarkson, said there was unlikely to be any progress on its Russell Vale expansion plans until February next year.
In an email sent to concerned residents and environmentalists about the plans to extend the life of the No1 Colliery by establishing another eight longwalls, Mr Clarkson said Planning NSW’s assessment of the proposal could take months.
He said it was likely the planning department would submit Gujarat’s preferred project report, revealed last month, to the Planning Assessment Commission (PAC) for assessment.
Residents have been anxious to have their say on the new report, which is a scaled-back version of plans that were heavily criticised by community members and several major NSW government departments earlier this year.
‘‘It appears likely that as part of that assessment process the PAC will hold public hearings which will allow community members and other interested parties to have involvement in the assessment process,’’ Mr Clarkson wrote.
