WEC have freezed Bayan's 56% share in KRL worth ~$429m (3'434'430'012 shares * $ 0.125 share price * 56% = $ 429'303'751,50) in order to secure their potential claim for damages against Bayan. Obviously the amount of damages claimed by WEC in Singapore amounts to several hundred of millions and the Supreme Court of Western Australia has found these claims were probably justified.
For Bayan it will probably become more difficult now to obtain those $900m in loans they currently seek (http://www.thejakartaglobe.com/business/indonesian-coal-co-bayan-seeks-900m-in-loans-for-debt-expansion-financing/507288) after they've at least temporarily lost such a huge amount of potential collateral.
It's way too early to even think about it but Bayan's share in KRL would be a perfect fit for WEC as their Pakhar coal project is close to Tabang and is very likely suitable for WEC's coal upgrading technology. Old Park Lane Capital's analyst report from June 2011 (http://www.kangarooresources.com/pdf/OldParkLane_200611.pdf p.37) actually mentions WEC's BCB technology as a potential path to unlock the value of the low rank coals in Pakar:
"One possible value chain for Pakar South highmoisture coal is use in a coal upgrading plant such as White Energy and Bayan’s JV in Kalimantan where initial test-work shows it is possible to upgrade coal to from 4,400 to 6,100 kcal/kg."
But as I mentioned last year in a post (http://hotcopper.com.au/post_single.asp?fid=1&tid=1503632&msgid=8603309) depending on the threshold of a potential export ban for low rank coal BCB may even become necessary for coal from Pakar North.
It may get really messy for Low Tuck Kwong.
WEC Price at posting:
38.5¢ Sentiment: Buy Disclosure: Held
