Adani Enterprises has signed an agreement to buy out Linc Energy’s royalty rights from the Carmichael coal project for A$ 155 million, the Australian company said on Thursday.
“Linc Energy is pleased to announce that it has entered into a binding option deed with Adani Group for the transfer of Linc Energy’s benefits in and obligations under the Carmichael Royalty Deed to Adani. The option exercise consideration under the option deed is
A$ 155 million,” the company said in a statement.
The Australian government last month had cleared the proposed Carmichael coal mine project of Adani in the Galilee Basin in central Queensland.
Adani will pay Linc Energy A$155 million consideration in two instalments: A$ 90 million in cash within five days of the exercise of the Option and the balance A$65 million in cash on or before 12 months from the date of the signing of the Deed of Assignment and Assumption, Linc Energy said in a statement.
“This agreement reflects Adani’s confidence in the progress of Carmichael mine, which received final federal environmental approvals from the Australian government last month,” Adani said in a statement as reported by Reuters. “The pact … underlines Adani’s consistent commitment to ensure that the high-quality coal from the Carmichael mine is cost-efficient.”
The company said it considers the transaction to be of benefit to its shareholders given the current market condition and the projected time to first production from the Carmichael mines. Peter Bond, CEO and MD of Linc Energy, said, “Linc Energy has number of very good quality assets, the sale of Adani royalty for A$155 million is a great example of one of these. And though I would have liked to keep this asset for the longer term it makes sense to start to cash up our balance sheet and commence to drop out the debt and focus on our world class assets.” With Reuters Input