Corrs delivers largest Chinese deal in the Australian coal sector

24 December 2009

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Corrs has successfully advised Yanzhou Coal Mining Company on its $3.3 billion acquisition of Felix Resources by way of scheme of arrangement. This is the largest ever Chinese deal in the Australian coal sector.

Austar Coal Mine (a wholly owned subsidiary of Yanzhou Coal) gained control of Felix Resources on 23 December after meeting the requirements of the Scheme Implementation Agreement and securing the approval of shareholders, PRC government regulatory authorities and FIRB.

Felix Resources, a corporation incorporated in Australia with shares listed on the ASX, has four major coal operating mines in Queensland and New South Wales, including Ashton underground coal mine, Ashton open-cut coal mine, Minerva open-cut coal mine and Yarrabee open-cut coal mine.

The deal consolidates Yanzhou Coal's position in the Australian coal market and provides expertise and funding capacity for the continued development of the Moolarben project and for future exploration and development.

Corrs worked closely with financial advisers UBS and other advisers King & Wood (Beijing), Baker & McKenzie (Hong Kong), PWC and Bespoke Approach to complete the transaction within a very tight timetable of approximately four months.

Partner Andrew Lumsden said: "Our team focused on understanding Yanzhou Coal's objectives and had a single minded focus on providing them with legal solutions that delivered the required result."

"Yanzhou Coal's existing management team had successfully operated Austar Mines in the Hunter Valley and knew exactly what they wanted. We formed a team to help Yanzhou's management understand the details of the asset (Felix Resources) and worked closely with Yanzhou and UBS to plan a route that would facilitate Yanzhou's ability to invest in Australia".

Corrs has acted for Yanzhou Coal since 2004 when the firm acted on the acquisition of Austar Coal Mine.

Andrew Lumsden lead the Corrs team on the deal, which included: George Piggott, Claire Jelbart, Sophie Chen and James Shirbin (Corporate Advisory); Shawn Wytenburg and Robert Bradshaw (Banking & Finance); and Stan Lewis and Katrina Sleiman (Litigation).

Corrs has been engaged to assist Yanzhou Coal in the integration stage of the transaction.