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“The bidding process has begun and the company is in negotiation with several potential buyers for either a partial or full divestment,” the Hong Kong-listed company said on Monday June 30.
The decision was made “in light of current market conditions for the sale of coking coal”, Winsway said.
Last Friday, Anglo American and Nippon Steel & Sumitomo Metal Corp settled the September quarter coking coal benchmark at $120 per tonne fob Australia, unchanged from that in the second quarter and the lowest since 2007.
The spot market picture is similarly bleak. Steel First’s premium hard coking coal index was calculated at $114.85 per tonne fob Australia last Friday, down from $133.70 per tonne fob at the beginning of this year.
Winsway has appointed BNP Paribas as its financial advisor on the divestment and it expects a transaction to complete within a year.
The company bought its 60% stake in GCC in 2012 when Marubeni Corp acquired the other 40% half. Winsway registered a net loss of HK$2.33 billion ($295 million) for 2013, deeper in the red than 2012 when it posted a net loss of HK$1.67 billion ($212 million).
GCC had a total run-of-mine coal output of 2.4 million tonnes in 2013.
Winsway Coking Coal is looking to sell at least part of its 60% stake in Grande Cache Coal Corp (GCC) as it no longer wishes to hold a majority interest in the Canadian coal producer it acquired in 2012.