Asia Special Situation Acquisition Corp. (stock symbol: [t]CIO[/t]) has announced that it has signed an agreement to acquire the southeast Asian business of White Energy:
White Energy to Merge Its South East Asian Business with Asia Special Situation Acquisition Corp
Wednesday December 17, 5:00 pm ET
Highlights
- White Energy to merge its South East Asian Business with US listed company Asia Special Situation Acquisition Corp (ASSAC)
- Merged Company to be valued at AU$385 million
- Merged Company will have cash reserves of AU$170 million
- Post merger, US listed company to be called White Energy South East Asia Corporation (WESEAC) and to be managed by White Energy
- White Energy to own 56% of WESEAC
SYDNEY, Dec. 17 /PRNewswire/ -- White Energy Company Limited (White Energy (ASX: WEC - News)) today announced the signing of a binding Letter of Intent with Asia Special Situation Acquisition Corp. (ASSAC (Amex: CIO - News)) whereby White Energy has agreed to merge its South East Asian business into ASSAC.
ASSAC is listed on the American Stock Exchange and was formed for the purpose of investing in a quality, Asian-based business with a significant growth profile. ASSAC's only current asset is its existing cash balance of approximately US$110 million (AU$170 million).
Post merger, White Energy will own 56% and ASSAC's existing shareholders will own 44% of the merged entity.
ASSAC will maintain its public listing on the American Stock Exchange but will change its name to White Energy South East Asia Corporation (WESEAC) in the event its shareholders approve the transaction. WESEAC will be managed by White Energy.
Post merger, WESEAC's assets will include:
-- The exclusive rights to utilize White Energy's unique patent-protected coal upgrading technology, which generates a more energy efficient, cleaner burning coal, in the key Asian markets of Indonesia (where it already has operations through its wholly owned subsidiary, BCBC Singapore Pte Ltd), Singapore, Malaysia, Vietnam and the Philippines. White's process upgrades subbituminous coal and the resulting product generates approximately 30% more BTU's, similar to bituminous coal in terms of energy output per ton. The conversion cost is less than 10% of the spread between today's sub-bituminous and bituminous coal prices.
-- Ownership of WEC's 51% share of two joint ventures in Indonesia, both with internationally respected companies, Bayan Resource Group and with Adaro Group and Itochu Corporation. These partnerships will not only generate significant royalty income for WESEAC but also represent an opportunity for generating large profit growth.
-- The Tabang Coal Upgrade project (PT Kaltim Supacoal) in partnership with Bayan is scheduled to have an initial capacity to upgrade 1 Million Tons Per Annum (MTPA) of low grade coal to higher grade and more valuable coal in Q1 2009 with the objective of having total production of 5 MTPA by 2011
-- The Adaro Coal Upgrade Project is scheduled for an initial capacity of 1 MTPA and is projected to increase capacity to 5 MTPA by 2012 and eventually to 8 MTPA
-- Cash of AU$170 million, which will be used to expand WESEAC's operations, support existing joint ventures, and otherwise for general working capital purposes.
Apart from providing expansion capital to underpin the further development of the PT Kaltim Supacoal project and underwrite White Energy's equity portion of the Adaro Coal Upgrade Project, the enhanced access to capital will ensure that WESEAC will be able to expedite the roll out of its business plan throughout South East Asia, with a particular initial emphasis on Indonesia. Indonesia has significant reserves of sub-bituminous coal and is located closer to the North Asian and Indian markets than other sources of coal. White has been in discussions with numerous parties to expand its presence in Indonesia. Extensive coal sample tests have already been successfully completed and the company is confident the results will lead to further enhanced growth opportunities.
From White Energy's perspective, the capital WESEAC will receive as a consequence of the merger will assist in the ongoing roll out of its business in South East Asia and will facilitate further development of its Binderless Coal Briquetting process that upgrades lower rank coal to significantly increase its energy efficiency and commercial value, while reducing greenhouse gas and other pollutants.
Other key elements of the proposed merger are:
-- White Energy will also receive performance options enabling it to increase its shareholding in WESEAC by a further 10% over time if it meets defined growth related milestones
-- White Energy will manage WESEAC and will be responsible for the day to day operations of the company
-- White Energy will appoint 4 members to the Board of Directors of WESEAC (including the Chairman) and the existing shareholders of ASSAC will appoint 2 members
-- The Agreement is conditional on completion of due diligence; finalization of definitive agreements; and requisite Board, Shareholder and Regulatory approvals. It is anticipated that the transaction will be completed within the next 60 days
-- White Energy's Managing Director, John Atkinson said, "The merger creates an extremely well funded entity capable of building a number of cleaner coal upgrading facilities throughout South East Asia.
The decision by ASSAC's Board to invest AU$170 million is a huge vote of confidence in White Energy's unique cleaner coal upgrading technology and the growing market for cleaner, more efficient coal. They share our firm belief that we have the right technology at the right time."
Asia Special Situation Acquisition Corporation's President, Gary Hirst said, "We have been actively examining investment opportunities in Asia now for a significant period of time and are convinced that the combination of our AU$170 million in cash and White Energy's unique cleaner coal upgrading technology is a compelling proposition. The ability to participate with White Energy in the energy thirsty markets of South East Asia represents the most exciting investment opportunity we have seen."
About White Energy
White Energy is the exclusive worldwide license holder of the Binderless Coal Briquetting process that upgrades lower rank coal to significantly increase its energy efficiency while reducing greenhouse gas and other pollutant emissions. The process was developed by Commonwealth Scientific Industrial Research Organisation in conjunction with TraDet Inc, K.R. Komarek Inc and The Griffin Coal Mining Company Pty Ltd. The patented process involves the crushing, drying and briquetting of high moisture coals, resulting in the reduction of the moisture content of the coal and converting the product into a higher energy content, stable product, whilst maintaining the low sulphur, low ash characteristics of the feedstock coal. The advantages of the White Energy process involve creating a higher energy value coal, creating a physically and chemically stable product, significantly enhancing coal transportation efficiencies and creating a higher energy value release. The process has been shown to be cost and operationally superior to competing technologies and represents a first step in building a cleaner coal solution.
White Energy Company Limited has offices in Australia, USA, Indonesia and China. For more information please go to www.whiteenergyco.com
<snip>
biz.yahoo.com |
