| Decision number | 200710035 |
|---|---|
| Application number | 200620041 |
| Date | 4 April 2007 |
| Offeror/applicant | Saurashtra World Holdings Private Limited |
| Ultimate applicant beneficial ownership | 100 percent - India, Saurashtra Fuels Private Limited |
| Beneficial overseas ownership | |
| - Asset current | N/A |
| - Asset proposed | N/A |
| - Share current | 24.78 percent |
| - Share proposed | 43.585 percent |
| Offeree(s)/seller(s) | Existing shareholders of Pike River Coal Limited 75.22 percent - New Zealand, New Zealand Public 14.14 percent - Australia, Australian Public 10.64 percent - India, Saurashtra Fuels Private Limited |
| Business activities | Agriculture - Native Bush Mining - Coal |
| Details of land involved | 87.5 hectares of freehold situated at North East of Greymouth, West Coast being CT WS8C/825 (Westland Registry). |
| Regions involved | West Coast |
| Total consideration | $30,054,432 |
| Consent sought | To acquire up to 25 percent of the specified securities of Pike River Coal Limited. |
| Rationale | The application has been approved as it met the criteria. The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987. Saurashtra World Holdings Private Limited (Saurashtra) currently holds 10.6 percent of the shares in Pike River Coal Limited (Pike River). Saurashtra and its parent Saurashtra Fuels Private Limited (SFPL) have entered into an Equity Subscription Agreement and Shareholders Agreement which provides an opportunity for Saurashtra to increase its shareholding in Pike River. SFPL is one of the largest privately owned merchant manufacturers of low ash metallurgical coke in India. SFPL currently imports coal from Australia and proposes to import coal from New Zealand once the Pike River mine is operational. SFPL has contracted to purchase coal for the life of the mine at market prices to meet its demand for manufacturing coke. Pike River holds a 40 year coal mining permit (MP 41-453) over 2,401 hectares situated on the West Coast of the South Island. The permit allows the mining of the Pike River premium hard coking coal deposit on the land. Pike River is in the process of developing the Pike River coal mine to achieve first coal production in the quarter commencing September 2007. All consents and access agreements have been obtained by Pike River to develop and mine coal from the Pike River coal mine for export. Once in production, the Pike River coal mine will produce premium hard coking coal, a form of metallurgical coal, which will be exported and used in the production of coke and steel. Pike River is facing substantial mine development costs to develop the coal mine. These costs will be met by the issue of shares to Saurashtra, the issue of shares to Gujarat NRE Coke Limited, an initial public offering (IPO) of shares in New Zealand and Australia and to a number of institutional investors in other countries, and bank financing. The proposal will provide funds for Pike River to complete the mine development and commence mining and exporting of hard coking coal. The Pike River coal mine project is likely to result in the following benefits:
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| Contact | Nick Baker Russell McVeagh PO Box 10-214 WELLINGTON |