The project comprises the raising of US$220 million in equity capital by Highfield from Yankuang Energy and the strategic investors (Cornerstone Placement) and the inter-conditional acquisition from Yankuang Energy of the Southey potash project in Saskatchewan, Canada (Vend-in) by way of the direct or indirect acquisition of 100% of the shares in Yancoal Canada Resources (a subsidiary of Yankuang Energy) (Yancoal Canada), as further outlined below.
Strategic rationale and key highlights of the project:
- The construction-ready Muga Phase 1 project is expected to be fully funded from completion of the transaction.
- Establishing, with the addition of Southey, a leading pure play potash company with a diversified portfolio of projects in tier-1 jurisdictions underpinned by strong ESG credentials.
- Attractive premium benefiting Highfield shareholders, with new fully paid ordinary shares in the company to be issued by Highfield for both the Southey Vend-in and Cornerstone Placement at a price of A$0.50 per share.
There is also the opportunity to unlock significant value with the support from a strong shareholder base:
- The establishment of a partnership with Yankuang Energy, a leading diversified Chinese energy company, with deep global connections and financial resources which is committed to support Highfield’s growth and development.
- Additional synergies and value creation opportunities expected from partnering with Beijing Energy, Taizhong and other investors.
