Yancoal Australia (ASX:YAL) has entered into a binding agreement to acquire a controlling interest in the Kestrel Coal Mine.
The deal, announced on April 14, sees Yancoal purchasing a 100% stake in Kestrel Coal Group from a consortium of vendors, including EMR Capital and Adaro Capital.
The acquisition effectively grants Yancoal an 80% interest in the Kestrel joint venture, a premier, long-life metallurgical coal asset in Queensland's world-renowned Bowen Basin.
The total consideration for the transaction is valued at up to US$2.4 billion, structured to balance immediate capital outlay with future performance.
Under the terms of the sale and purchase agreement, Yancoal will provide an upfront cash payment of US$1.85 billion upon completion.
The remaining US$550 million is structured as contingent consideration, payable over a five-year period.
The additional payments are linked to market performance; specifically, they are triggered if the annual average price of the Platts Premium Low Vol. Hard Coking Coal FOB Australia Index exceeds a predefined threshold.