Case Studies
BBY's highly professional team has extensive experience in solving multiple problems for its corporate clients.
In the following case studies, BBY solved numerous capital raising issues, delivered M&A outcomes, strengthened the share registers of the companies concerned and assisted shareholder communications.
FORTESCUE METALS GROUP LTD (FMG)
BBY Research is very proud to have been the first group to initiate coverage of the Fortescue Metals Group (“FMG”), placing a “Strong Buy” on the future mining behemoth from day one. At that time, (January 2005), FMG had a market capitalisation of under A$600M.
In the same year, BBY secured around US$100M for FMG through two convertible notes in January (A$40M) and February (US$70M) through our large offshore institutional clients.
FMG reached a significant milestone in Q3 2005, when it topped the A$1B market capitalisation level, with the help of a strong US share register introduced by BBY. The following year, BBY and our equity partners Jefferies International, secured US$400M from Leucadia National Corporation (a NYSE listed company with a market capitalisation of approximately $6B) and in 2007, BBY was a Co-Manager to a placement for FMG that raised A$504M.
Since then, BBY has hosted several global FMG roadshows and featured FMG at a number of its annual Conferences including in Dubai, which attracted significant strategic offshore investors to the register.
FMG today has a market cap that fluctuates around A$20B.
LINC ENERGY LTD (LNC)
In need of funding and corporate advice, Linc Energy was referred to BBY by a corporate client in late 2005. From the outset, BBY Corporate Finance team was impressed by the Group’s plans and their clear vision to develop their Underground Coal Gasification and Gas to Liquids technologies.
Following BBY marketing roadshows across Australia, Asia and North America, Linc (LNC) was successfully listed on the ASX in May 2006. The listing raised A$22M via an IPO using funding from only highly supportive institutional and high net worth investors.
BBY’s support and that of our clients has proven to be well-justified. LNC has been a stellar performer on the ASX and was in fact the single best-performed stock on the ASX in 2008. That same year, BBY won the prestigious “Corporate Deal of the Year” from the Australian Stockbrokers Association for the October 2007 A$29.23M LNC placement at A$0.76. Just prior to the Award in July 2008, LNC was trading at A$4.63, which gave LNC shareholders who participated in the placement a return of 509% in only several months.
In September 2008, LNC was included in the S&P/ASX 200 Index and hit the A$2B market capitalisation mark, an extraordinary achievement for a company that listed on the ASX with a market cap of only A$80M less than two and half years earlier.
Since that time, BBY has been LNC’s Corporate Adviser in the successful acquisition of Sapex Limited by Scheme of Arrangement. BBY has also since raised over A$270M for LNC in six capital raisings, including an August 2009 A$57.4M placement and a A$20M Underwritten Share Purchase Plan, where we successfully introduced a new register of large strategic investors from Australia and offshore.
COALWORKS LTD (CWK)
In late 2007, Coalworks was introduced to BBY through a corporate relationship back then. CWK had a vision to be a leading energy producer in Australia, building an inventory of coal assets in world-class coal provinces and bringing them into production and profitability.
After the completion of the company’s A$2.5M Pre-IPO (managed by BBY), CWK was able to drill its first major project, Oaklands North, and deliver a large JORC resource. BBY then acted as underwriter to CWK’s IPO which listed on the ASX in May 2008, raising A$25M. BBY introduced CWK to global institutional and high net worth investors that were aligned with CWK's visions.
Following the IPO, BBY was appointed CWK’s Corporate Adviser as it developed its portfolio of coal assets to include Vickery South and Ferndale, and continued to market the company via roadshows and presenting at BBY’s Resources Conferences.
In December 2010, BBY raised ~A$30M via a placement to global institutions. As part of the placement, Nathan Tinkler’s Boardwalk Resources took a 19.9% position. In conjunction with the placement, BBY also acted as adviser to CWK on a A$25M 50/50 JV with Boardwalk Resources Ltd (BWK) to develop its Ferndale coking and thermal coal project. The A$25M will be spent by the JV to complete a bankable feasibility study on an open-cut mine and a pre feasibility study for underground mine development at Ferndale.
CWK has also recently announced that it plans to spin off its non core assets the Hodgson Vale and Ashford projects into Orpheus Energy Limited (OEG), OEG will also focus on near-production Indonesian coal opportunities. BBY assisted OEG in completing a A$3.45M Pre-IPO and is currently the lead manager to the upcoming A$27.8M Orpheus IPO due to be listed on the ASX.
Over the course of 2010, the share price of CWK gained approximately 200% and was a stellar stock market performer.
BBY and CWK have developed a strong partnership over the last four years. BBY congratulates CWK and Orpheus management teams on their success to date and looks forward to assisting with the company's exciting future.
