Speaking of coal, the Australian Financial Review reports a rumour that Centennial Coal could raise up to $200 million this week to reduce gearing and set itself up for further deals. Centennial’s debt levels are heading towards the 50 per cent mark by mid 2010. The Fin says there is suggestion that the raising, probably managed by Macquarie Capital, could then be followed by a merger with Whitehaven Coal, which earlier this year had a reverse takeover with Gloucester Coal scuppered by Gloucester's cornerstone shareholder Noble Group. Last month Royal Bank of Scotland analysts tipped Centennial to be the coal sector's most likely takeover target and in July it was rumoured that PTT of Thailand could make a move following the exchange of 3.45 million shares. Centennial also fits into the frame of possible Indian coal targets and a recent Goldman Sachs JBWere research report listed Centennial among Macarthur Coal and Felix Resources (under takeover by China's Yanzhou Coal) as the companies most leveraged to India's energy boom. We’ll add Linc Energy to that group too and add various Indian coal companies to its list of suitors, along with BHP (above).
CEY Price at posting:
$3.19 Sentiment: LT Buy Disclosure: Held
