Aston Resources price slash to increase interest
Nathan Tinkler's initial public offering for Australian developer of coal projects Aston Resources has been lowered by about 25 per cent to secure investor interest and a stock exchange listing.
While the company's advisers, BKK Partners, had wanted to complete the planned $400 million book build and issued the prospectus by today, debate among cornerstone investors and weaker than expected interest from institutions delayed the process.
The institutional price, initially set at $8.20, has now been reduced to $5.96 in a bid to spark interest.
Reports say that the targeted market capitalisation of $1.5 billion is down to $1.2bn and the IPO currently aims to raise $300m.
The book-build process could have been reopened last night and closed today, according to sources.
The price discount is a frustrating for the float sponsors, given initial reports showing the deal would be well supported and unconfirmed indications Mr Tinkler was to gain a $600m profit in the process.
Swiss-based Glencore, a European commodity trader, is believed to have emerged as a potential new cornerstone investor on Wednesday night, urging renewed talks between Aston Resources and its two original backers, Singapore trader Noble Group and Japan's Itochu. But Glencore, despite showing initial interest, is reportedly no longer taking a strategic stake.
Noble Group and Itochu had originally planned to collectively acquire up to $100m worth of Aston shares under the offer, for a 7 per cent stake.