Ahmedabad, July 20th, 2007. While the ink on the India NRE listing certificate is yet to dry, Gujarat NRE has spread another cheer with its investment in Pike River Coal company bearing fruit.
Pike River Coal Limited shares will debut on the New Zealand share market (NZSX) today, after successfully completing the largest public equity raising in New Zealand so far this year. Strong interest from investors for shares in the miner of hard Coking coal resulted in all 65 million shares in the Initial Public Offer (IPO) being allocated plus 20 million in over subscriptions, raising a total of $85 million. The funds will be used for the ongoing development of the hard Coking coal resource owned by Pike River near Greymouth and reduce the amount of debt required. At current prices, the Pike River coal mine is expected to generate $2.3 billion in export receipts over its lifetime.
Sri Arun Kumar Jagatramka, Vice Chairman and Managing Director of GNCL, India's largest producer of LAMC and the first Indian company to have acquired coal mines in Australia, in a related development has joined the Board of Pike River. "We are one of the largest cornerstone investors in the company and have a very potent business agreement - Gujarat NRE has the firm Coking coal off-take for life of the mine for coal produced by Pike River Coal Company and therefore, when the Board requested that I share my expertise in the field of global coal dynamics and personal mining experiences in Australia I was only too happy" said Sri Jagatramka.
He has a reason to be happy. Pike River coal is understood to have the lowest ash and highest fluidity of any hard Coking coal in the seaborne trade. These attributes are valuable in the production of steel, having a high energy content and allowing other lower grade coals to be blended. Pike River coal, known as a "sweetener" in the industry is extremely low ash and relatively inexpensive. It is used as a blender, or a sweetener and for example, when blended with the coal mined in Australia by Gujarat NRE in its own mines, the resultant increase in the price realisations is manifold.
As one of the recent coke market reports suggested, FOB prices from China for a 10.5 % ash met coke was more than US$ 375 as compared to US$ 260 for a 12.5 % Ash Product.
"This is the fourth listing by the group in an overseas Stock Exchange", pointed out a happy Jagatramka. His reason for being happy too, is not hard to fathom. Investment in Gujarat NRE Resources has more than doubled from 15.5 cents in March 2007 to 35 cents presently, while investment in Pluton Resources has grown more than 30 times in a short span of two years from $ 0.5 million to $ 15 million at current market prices.
The Pike River IPO and listing comes close in the heels of Gujarat NRE Coke's Australian flagship, India NRE Minerals Limited, whose IPO too was over subscribed prior to its listing in the ASX. The scrip, which attracted, perhaps for the first time, retail Indian investor's interest in an overseas float, is now being traded at a premium of 10% to the offer price.
For More Information Contact :
Suvobrata Ganguly
Head - Corporate Communications
Gujarat NRE Coke Limited
Email : [email protected]
Mob : +91 9831008013