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Several stories posted (in Polish) regarding the JSW plans for the Praire Mining assets. Also, their plans for the related purchase of PBSz = Przedsiebiorstwo Budowy Szybów1 (Shaft Construction Undertaking 1). This one concerns the funding for the purchase of PBSz and other borrowings. All looks positive so far.
https://translate.google.com/translate?hl=en&sl=pl&u=https://jastrzebieonline.pl/news,12552,jsw-obligacje-lub-finansowanie-bankowe-.html&prev=search
Could you give us a link for this please ? There are some interesting new things mentioned here.
Przedsiębiorstwo Budowy Szybów1 translates as Shaft Construction Undertaking 1, which sounds like a logical acquisition for JSW given their interest in developing new projects.
New mines with Asian business partners Jastrzębska Spółka Węglowa is planning an acquisition of Prairie Mining’s majority shareholding. Prairie is the company owning coal deposits in Dębieńsko and Lublin Coal Basin. JSW hopes that the rest of the shares will be owned by partners from Asia (i.e. Indonesia, China). JSW is also holding talks with Chinese banks with regards to construction financing. New mines together with Asian business partners Construction of Dębieńsko and Jan Karski mines could increase JSW’s annual production volume by half by Jacek Madeja Jastrzębska Spółka Węglowa is planning to take over Prairie Mining’s majority shareholding. Prairie is the company owning coal deposits in Dębieńsko and Lublin Coal Basin. JSW hopes that the rest of the shares will be owned by partners from Asia (i.e. Indonesia, China). JSW is also holding talks with Chinese banks with regards to construction financing. JSW has been talking with Prairie for over a few months already. Two projects which JSW is interested in are owned by this Australian company, Two projects, one goal ‘The first [goal] is to build a coal mine in Dębieńsko. This project is also a part of “Program for Silesia”. The second project belonging to Prairie is Jan Karski mine in Lublin Coal Deposit. We have already conducted technical audits of both projects. Preliminary audits confirmed that both concession areas contain coking coal. In Lublin Coal Deposit it’s semi-soft coking coal, whereas in Dębieńsko it’s hard coking coal. We have a good knowledge of Dębieńsko’s coal as this deposit is neighboring with our concessions in Szczygłowice and Budryk,’ Daniel Ozon, JSW’s CEO, emphasized. Thanks to close location it will be possible to reach Dębieńsko’s deposit much faster. Prairie Mining wanted to drill shafts to mine the coal. JSW could, at least in the first stage, do it much faster by using Szczygłowice mine’s underground infrastructure. ‘This way we could theoretically start the production in Dębieńsko in the next year. We could reach the wall and cut it and start the production using Sczygłowice’s infrastructure. These are the changes we would have to implement to concession documentation and deposit development plan. In the end, there will be an independent shaft in Dębieńsko, and as a result, a new mine,’ JSW’s CEO argues. That is why the next element of this jigsaw is Przedsiębiorstwo Budowy Szybów1 (“PBSz”) whose acquisition is currently being finalized by JSW. Thanks to this [acquisition] not only JSW can facilitate roadway works, but also concentrate on building new shafts, and as a result new Dębieńsko and Jan Karski mines. JSW does not intend to have PBSz conduct the construction on its own but in cooperation with other companies. Cooperation would not limit to technical support only, but also include participation in financing the whole undertaking. Chinese market as a financing source ‘We have sent our team to China again, along with PBSz representatives. We will have meet
They effectively control it by saying you can’t offer it to any other entity if you usufruct. So if they want to go a n other, they have to apply to court to lift the injunction and the case is heard Time, spotlight, reasoning etc all risks to be factored in It’s complex - that’s my point
The position is clear in the latest quarterly report (31 Oct 2018). The Ministry of the Environment can issue the Usufruct to Prairie at any time. The injunction prevents them from giving the Usufruct to anyone other than Prairie.
"...........The court has ordered that the MoE does not grant any concessions ...... to any party other than PD Co Sp" (Prairie).
At a later date Prairie may take "...further action against the MOE including invoking ..... (action) under any bi-lateral of multi-lateral investment treaties...."
As the gov are not free to deal with the asset until the hearings are concluded, it is the court who control it until the matter is heard and adjudicated by them.
So I disagree - ATM by virtue of their injunction, the court is in control albeit from an inactive / freezing it viewpoint.
One would think if there is a legitimate reason for non granting, JSW would just sit and wait
As the gov are not free to deal with the asset until the hearings are concluded, it is the court who control it until the matter is heard and adjudicated by them.
So I disagree - ATM by virtue of their injunction, the court is in control albeit from an inactive viewpoint.
One would think if there is a legitimate reason for non granting, JSW would just sit and wait
The Ministry of the Environment are effectively in control as they have not issued the Mining Usufruct Agreement. We do not know if this is for a legitimate reason or not. Prairie has an injuction (to prevent the Usufruct in favour of a third part) but this does not have any other implication. So it would be more accurate to say that the mining assets are controlled by the government.......etc.
No doubt but the mining assets are controlled by the court for the foreseeable future , not the unions, public or government. And the unions will have discussed, its not in their members interests ( or any other persons) to have idle assets Fascinating to see how it unfolds given national importance and size
Daniel Orzon (JSW president) has been vocal about his plans for the Praire assets. He needs the support of the unions, the government and the Polish public to take his plans for JSW forward. Without clear support (for his plans) from these interest groups he would fall victim to the Energy minister's alternative plans to sack him.
It’s part of the eu so there is much more rule of law than in many other mining countries.
Expropriation by the backdoor could lead to a serious backlash against Poland and any inward investment
The bod aren’t intimidated, hence the swift legal response & court so far in PDZ favour so prime facie, it appears independent of the executive.
JSW are the vocal ones with about wanting the company if the reuters reports are correct, clearly they want it and have gone public - not quite sure why they have done this - the Bod rightly are silent - the best tactic.
So at the moment, there is a 12 month period when nothing will happen apart from a compromise deal.
But to me the most important thing is that currently, the assets are on neither companies balance sheet - nor adding to national GDP - so its a stalemate and a lose/lose/lose atm.
Perfect recipe for a decent symbiotic compromise .
That said, the above only holds if business sense prevails - not guaranteed in todays personality volatile world!
graphite why do you say north of 50p?
re volume. Seems peeps are selling on the rumour
Took a 30k dec spreadbet at 23.17p for fun - well profit hopefully.
CEO has the backing of the unions
That article was dated September and he is still CEO
I totally agree GT, JSW and the Government have been implicit in getting PDZ on the cheap.
While the eventual take out price may be generous compared to yesterdays price 24p.
Below £1 will be a right result for JSW
LOL, still think they would be on better terms with him than the Aussies.
This whole situation has been engineered to allow this to happen at the right price.
just saw this in twitter.
CEO JSW not in good term with minister
https://uk.reuters.com/article/jsw-ceo/update-2-poland-plans-to-fire-ceo-of-miner-jsw-this-week-source-idUKL5N1VW3LP
JSW a poland mining company intrested in taking over #PDZ -
JSW have coal reserves of 503.4m revenue of us $1.78BIllion
#PDZ - Total resource = 728m tonnes of coal
Sale price = $24.96 per tonne
Total value = $18.1 Billion
So how much would you value pdz.
Offer coming
Align valued the shares on a (fully diluted) risked / unrisked basis at 118p / 151p in September 2017. Coke prices are 5 to 8% higher now than they were in September 2017 (and USD/GBP about the same). So about £ 1.50 would be about right IMHO.
The fact that this still being discussed as a possible implies that JSW will offer near to what the Prairie wants.
28k and 40k just landed. Live buys as well not delayed.
Update from Reuters
https://www.reuters.com/article/prairie-mining-ma-jsw/update-1-polands-jsw-eyes-controlling-stake-in-prairie-mining-ceo-idUSL8N1XI578
Paying with existing cash and deal to close in q1 2019.
No mention of amount but thats got to be close now and it must be north of 50p.
Possibly £1
Any takeover will need to be near £1 and thats a bargain to JSW
#PDZ is worth well over £100m! Just done calculations :
Total resource = 728m tonnes of coal
Sale price = $24.96 per tonne
Total value = $18.1 Billion
Take-over will be well excess of £100m looking at more £200m as a minimum
Should start to pick up speed as word gets around. Most won't see this till close of play this evening.
I expect the takeover price will exceed this.
Easy money for those willing to buy at this point and hold for a while.