White Energy Co. dropped to the lowest in almost six years in Sydney trading after saying it failed to reach a supply agreement for its Indonesian coal processing plant with partner PT Bayan Resources.
White Energy declined 18 percent to 49 Australian cents a share at the 4:10 p.m. close, while the S&P/ASX 200 Index fell 0.3 percent. The shares earlier slumped as much as 24 percent.
The stock dropped 47 percent on Nov. 9, the most in six years, after saying Bayan raised concerns about the economics of upgrading the plant. White Energy and Bayan were reviewing the economic viability of the Tabang plant after the Indonesian company sought a “substantially higher” contract price to supply the venture, the Australian company said at the time.
Bayan proposed supplying coal to the plant on the condition that White Energy buys its stake in the venture, the Sydney-based company said in a statement today. White Energy directors decided it wasn’t in the interests of shareholders to purchase Bayan’s 49 percent stake in PT Kaltim Supacoal, which operates the plant, for $45 million, according to the statement.
White Energy said it will instead “pursue its legal and other commercial options.”
“Whilst the current issues with Bayan may be a setback for Tabang, it does not change the board’s firm view that there is an ongoing strong demand from large coal companies in both Indonesia and globally to partner up with White Energy,” its Managing Director Brian Flannery said in today’s statement.