Cokal Slumps as Blumont Bid Affected by Stock Drop: Sydney Mover
Stock Chart for Cokal Ltd (CKA)
Cokal Ltd. (CKA), a coal mine developer, slumped by the most in 4 1/2 years in Sydney trading after takeover talks with Blumont Group Ltd. (BLUM) were affected by a record plunge in the buyer’s stock.
Cokal fell 22 percent to 18 cents at 11:04 a.m. in Sydney trading, the biggest drop since February 2009. Blumont shares declined 85 percent to 13 Singapore cents yesterday, extending a 56 percent drop on Oct. 4. The two-day, 90 percent drop shaved S$4.9 billion ($3.9 billion) from its market value.
“The movement in the Blumont share price materially and adversely affected the commercial terms of the takeover proposal,” Cokal said in a statement. “Blumont and Cokal continue to believe in the strategic merit underpinning Blumont’s proposals, further discussions are now occurring to restructure the financing and potential takeover offer.”
Buying Cokal would give Blumont stakes in coking coal projects, including the BBM project in Indonesia scheduled to begin production next year. Cokal, which has plans to become a global coking coal miner, owns stakes in projects in Indonesia as well as joint ventures in Tanzania and Mozambique, according to the statement.
Blumont yesterday agreed to loan Cokal $8 million, it said in a statement. It would allow development work at Cokal’s projects to continue as the pair pursue talks about further investment in the Australian company.
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