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Houlihan Lokey starts New Wilkie clean-up job

Suitors for defunct coal miner New Wilkie Energy have been asked to prepare non-binding indicative bids by March 22, as Houlihan Lokey hunts for a party to resurrect the Surat Basin asset.

Flyers sent to potential bidders last week said FTI Consulting and Houlihan Lokey were open to acquisition or recapitalisation proposals. Both financial buyers and trade players are being approached. The data room is set to open on March 4, and will be followed by first-round offers on March 22. Shortlisted parties will be taken through site visits and management meetings, before the April 22 deadline for binding bids.

Once owned by Peabody Energy, the business called in administrators on December 27 amid a coal price plunge, as revealed by The Australian Financial Review. On January 11, lenders responded by sending in FTI Consulting’s Chris Hill and Ben Campbell as receivers. FTI, in turn, has hired Houlihan Lokey’s Jim McKnight to run the sale process.

Wilkie Creek is an open-cut thermal coal mine, that produced about 20 million tonnes of coal for then-owner Peabody Energy between 2003 and 2014. Over the next seven years, it remained in care-and-maintenance mode, until New Wilkie Energy acquired it in 2021 and set about bringing it back to life. When it landed in administration two days after Christmas, it had only been up and running for eight months since the restart.

Despite its troubles, the mine still has a 136 million tonne reserve and is on a “de-risked and accelerated path” to produce 1.2 million tonnes a year, according to the flyer. Additional capex could double the run rate, it added.

Backers would be able to ship the aforementioned 1.2 million tonnes of coal a year from the Port of Brisbane, via the West Moreton railway line. New Wilkie Energy has signed agreements with Aurizon and Queensland Rail for freight, and with Queensland Bulk Handling for port access. The sell-side pitch also mentions “an established customer base” in Japan and other Asian coal markets.

Source: AFR