Australia Dealbook: Chinese PE backs Yancoal, Anacacia Capital bags Big River

Australian coal producer Yancoal will issue nine-year bonds valued at $950 million to Chinese financial entities. And private equity firm Anacacia Capital has bought iconic timber producer Big River.

Yancoal to issue nine-year old bonds worth $950m

Australian coal producer Yancoal said one of its units will issue nine-year old bonds worth $950 million to Bohai Harvest, a Chinese private equity firm that has Hunter Biden, son of US vice-president Joe Biden, on its board, and to two other banks in China.

Yancoal already has a deep Chinese connect. It is owned by Yanzhou Coal, the state-owned coal mining company.

The bondholders will collect 8.5 per cent interest yearly on A$760 million of the bonds, and 15 per cent on the remainder, said a report in The Australian. Those returns would depend on the performance of Yancoal mines, against which the bonds are secured.

Yancoal, whose market value has shrunk by more than 90 per cent in the last four years to A$61 million, will benefit from the $1 billion of cash it gets upfront as part of the deal. That would be a boost for its unproductive production, which has seen 12 consecutive quarters of negative net operating cashflow.

The second player to benefit is Noble Group, the troubled commodities trader, and Yancoal’s second-largest shareholder. Noble had controvesially valued Yancoal’s stake at 20 times its then-market value. That calculation might find more support after this bond issuance, as it would reduce the risk that Yancoal assets hold for investors.

The only thing that would not benefit is the worldwide coal market, where players are suffering since 2011 from falling prices brought about by oversupply. Yancoal’s bond deal would allow for unhindered production, putting further pressure on prices.

Anacacia Capital to buy timber producer Big River

Timber manufacturer and distributor Big River has been sold to private equity firm Anacacia Capital.

The iconic player was sold for an amount between $50 million and $100 million.

Big River is known for its timber and formwork products, timber flooring, structural plywood and related products. It had revenue of about $150 million.

Anacacia is focussed on small and medium enterprises in the mid-market segment in Australia. It had invested in Yumi’s Quality Foods in 2014.

Anacacia is betting that this is a good time to be in the timber business, with other players like Woolworths’ Homes and Hardware Business in a state of transition. It can appeal to tradies who avoid big box retailers, by building a platform with smaller timber and hardware players.

Also read:

Noble Group’s LNG traders leaving to join rival Glencore

Noble Group says taking steps to bolster balance sheet, repurchases bonds to trim debt

Fitch sole agency to give investment grade rating to Noble Group

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.