core sector communique

Gujarat NRE Coke’s Australian subsidiary raises over Rs. 320 crores

Kolkata, 17^th February, 2011. Gujarat NRE Coke Limited is pleased to announce that its Australian subsidiary Gujarat NRE Coking Coal Limited (ASX Code: GNM) has raised over Rs.. 320 crores through an institutional placement done through book building mechanism.

The placement which opened on 16^th February 2011 closed on the same day. Supported by a wide group of new and high-quality institutional investors, GNM raised Australian Dollars 72 million through the issue of 100 million fully paid ordinary shares at 72 cents each.

Mr. Arun Kumar Jagatramka, Chairman remarked that the raising demonstrated “the interest in Gujarat and its long-term prospects felt by the institutional investors”.  He further added that “the proceeds from the capital raising will provide for valuable investment in the Company’s two producing hard coking coal mines, NRE No.1 Colliery and NRE Wongawilli Colliery, both of which are located south of Sydney in Wollongong. GNM has previously announced plans to develop and refurbish existing facilities at these mines with an aim of achieving 6 million tonnes per annum of coking coal production by 2014 – 2015. This equity raising will provide important additional capital to complement funding available through GNM’s debt facilities. GNM’s overall funding package will provide for initial development activity required to realise our objective of materially increased coking coal production”.

 With a view to increase the free-float and liquidity in trading of GNM’s shares, Gujarat NRE Coke Limited did not participate in the placement. After the allotment of the placement shares, the aggregate shareholding of Gujarat NRE Coke Limited in GNM would come down from ~77 % to around 69 %.

UBS AG, Australia Branch acted as the sole lead manager, book runner and underwriter of the Placement. Ernst & Young Transaction Advisory Services Limited acted as financial advisor.