Australian-listed potash miner Highfield Resources could be seeking a dual listing in Hong Kong in the medium term, following the completion of its purchase of a Canadian potash project from Yancoal Canada.
The $122m company, which is 25 per cent owned by the Owen Hegarty-led private equity firm EMR Capital, last month announced a transaction under which it buys Yancoal Canada’s Southey potash project in a scrip proposal.
As part of the agreement, Highfield will raise $US220m from Yankuang Energy, of which Yancoal Canada is a subsidiary, and other strategic investors in a cornerstone placement.
Shares were sold as part of the Southey vend-in and cornerstone placement at 50c each, a 64 per cent premium to the undisturbed share price on July 18.
As a result, Yankuang will be Highfield’s majority shareholder.
Yankuang Energy, owned by the Chinese government, is the 62 per cent shareholder of Australian-listed coal miner Yancoal, which sources say is now shaping up to be the most strongly placed to buy Anglo American’s $US4bn coal portfolio – from a price perspective at least.
When Yancoal bid for BHP’s Daunia and Blackwater coal mines in Queensland last year, it withdrew at a late stage in the contest after China’s government did not approve the transaction.
However, this time around, it is understood to have secured pre-approval for its bid.
DataRoom earlier revealed that the final offers in the Goldman Sachs and Morgan Stanley-advised contest were due the week beginning November 11.
The two other major contenders are Stanmore Coal with Golden Energy and Glencore.
Working for Yancoal on that competition is Citic CLSA and RBC.
Working for Highfield on the potash deal was investment bank Morgan Stanley and DBS out of Singapore.
China has been a big investor in the Canadian and Spanish markets for potash, which is used in fertilisers, but the Australian market is also appealing to China which is keen to have listed investments on the ASX due to its strong standards around corporate governance.
Highfield’s flagship project is its Muga Project in Spain, while it also owns other Spanish projects, including Sierra del Perdon and the Pintanos exploration project.
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