With Australian Pacific Coal (ASX: AQC) up 100% today, should you sell now?

After a few years out of the industry, Nathan Tinkler wants to get back into coal and he’s made a bid for Australian Pacific Coal (ASX: AQC). AQC is the current owner of the Dartbrook coal mine in NSW that has been non-operational since 2006. But will it get off the ground? 

 

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Nathan Tinkler shows up at Australian Pacific Coal (again)  

Shareholders in Australian Pacific Coal awoke to news that Nathan Tinkler, through a private company of his called Nakevo, has made an offer to refinance debts worth ~$60m and then acquire Australian Pacific Coal at 30c a share (valuing it at $15.1m). He has promised to buy nearly 20% of shares on offer immediately. 

Tinkler made his fortune from the coal boom in the 2000s and early 2010s, but ended up bankrupt and banned from managing companies with mounting debt and allegations he breached directors duties, particularly failing to prevent companies from trading while insolvent. 

But his ban expired last year and now he wants back into the industry. In a twist of fate, this isn’t the first time Tinkler has showed up at Australian Pacific Coal, having served a brief stint in 2015 during which APQ got its hands on Dartbrook from Anglo American for $25m. 

 

Will Dartbrook get off the ground? 

Dartbrook currently has a consent period lasting until 2027, having won the most recent extension earlier this year. But it has been in care and maintenance since 2006 after engineering and safety issues. 

Accepting a takeover bid in no way guarantees it goes ahead, but it guarantees the question is no longer a problem for current shareholders.  

 

Should I sell Australian Pacific Coal? 

With shares up 100% and a chance remaining that the bid could be withdrawn (as happened to Appen (ASX: APX) recently, we think shareholders should take the chance to exit the company now. 

 

 

The Australian Pacific Coal board has told shareholders it will consider the offer and will inform shareholders when it has come to a decision. In a telling sign that it is seriously considering the bid, it has postponed an EGM that was scheduled for today.  

 

 

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