A Vancouver based coal company has received a significant offer.
First Coal Corporation has recently received an all-cash offer of purchase from Xstrata Coal. The company’s Board of Directors has unanimously recommended that its shareholders support the transaction when they are scheduled to vote on August 2.
The offer states Xstrata will acquire 100 per cent of First Coal’s shares, options and warrants for $1.75 CDN per share. The offer values the privately-owned First Coal at approximately $147 million CDN.
The transaction can only be completed with 66.66 per cent of the votes at the First Coal shareholder’s meeting.
Doug Smith, president and CEO of First Coal Corporation, says “First Coal has been exploring a range of potential transactions and financing alternatives for the company for some time and we feel this arrangement will provide the technical expertise and financial strength to further develop the coal properties held by First Coal.”
Upon the shareholders approval, the acquisition is expected to be finalized by mid-August. Xstrata Coal plans to retain the current staff of First Coal, with the intention of continuing to work towards to development of First Coal’s properties near Chetwynd in Northeast B.C.
Xstrata is based out of Sydney, Australia and is the world’s largest exporter of thermal coal and a major producer of premium quality hard coking coal and semi-soft coal.