Cockatoo extends share trading suspension

OREANDA-NEWS. Australian pulverised coal injection (PCI) grade producer Cockatoo Coal has extended the suspension of trading in its shares until 3 February. Cockatoo was expected to make an announcement about its debt position today.

Cockatoo originally asked the Australian Securities Exchange to halt trading in its shares for two days from 13 November. It has sought several extensions while it tries to secure funding. Its shares were expected to be lifted today if it secured financing, although there is no guarantee funding will be obtained given the subdued outlook for the coking and thermal coal markets.

Cockatoo made a loss of A\$191mn (\$151mn) in the 2013-14 fiscal year to 30 June and has been relying heavily on funds from its major shareholders, Hong Kong-based commodities firm Noble and South Korea's SK Networks, to continue work on the expansion of its Baralaba PCI mine to 3.5mn t/yr from 1mn t/yr.

Noble and SK Networks agreed in August to release A\$37mn in restricted cash, which had been used to secure Cockatoo's access to 3mn t/yr of export capacity at the 27mn t/yr Wiggins Island coal export terminal (Wicet) at Gladstone in Queensland. Cockatoo is dependent on the Baralaba expansion to meet its obligations to send 3mn t/yr of coal through the port. But the project is still in the planning phase.

The financial viability of Cockatoo will also affect Wicet, which was financed based on commitments by shareholders to cover any shortfall in coal supplies, as well as financing and operating costs. But the slump in coal prices has left many producers operating at a loss, and raised doubts if shareholders will be able to operate the project at full capacity.

One of the terminal's eight original owners, Australia's Bandana Energy, is in financial administration. The remaining shareholders in Wicet are Switzerland-based mining and trading firm Glencore, China-backed Yancoal, Chinese steelmaker Baosteel and Australia's Caledon Coal, Wesfarmers and New Hope.