PERTH (miningweekly.com) – Singapore-listed Sino Construction on Thursday announced its plans to make an off-market takeover offer for ASX-listed Guildford Coal.

In August this year, the two companies reached a $25-million sales agreement under which Sino Construction would acquire Guildford’s Queensland coal assets. The assets would include the Clyde Park project, as well as the Pentland, Springsure, Hughenden Sunrise, Monto, Sierra and Kolan projects.

Under the terms of that agreement, Guildford would be appointed as sole manager of the coal assets, and would have the first and last right to be appointed as the contract miner for each asset, as they moved into production.

Guildford earlier this week warned of a possible noncash impairment charge of between A$40-million and A$50-million on the carrying value of its noncurrent Australian assets.

However, Sino Construction was now planning to launch a complete takeover of Guildford, offering the ASX-listed company’s shareholders one Sino Construction share for every 4.5 Guildford shares held.

The offer price represented a 13.5% premium to Guildford’s closing price on September 24, and an 8.69% premium to the 30-day volume weighted average price of the company’s shares.

The offer also implied a value of 6.13c per share for Guildford’s stock.

“Our offer provides a unique opportunity for Guildford shareholders to become a shareholder in a larger and more diversified organisation, both in terms of business operations and geographic scope,” said Sino Construction chairperson Andy Chee.

“Importantly, Guildford shareholders would also retain an indirect interest in Guildford by virtue of becoming part of the expanded Sino Construction Group.”

Chee said that a full takeover of Guildford was preferable to the asset sale agreement, giving Sino Construction shareholders exposure to Guildford’s Mongolian assets.

Guildford recently executed its first sales contract for its Baruun Noyon Uul (BNU) coal mine, in Mongolia. Previously known as the North pit, BNU forms part of Guildford’s South Gobi project, and has a coal resource of 70.4-million tonnes, which includes an indicated resource of 39.7-million tonnes.