Wesfarmers Ltd (ASX: WES) will report a $670 million profit from its fresh deal with New Hope Corporation Ltd (ASX: NHC) following the sale of its stake in the Bengalla Join Venture.
Wesfarmers is Australia’s leading retailer, with ownership of Coles, Bunnings Warehouse, Kmart, Officeworks and more. It also owns assets in the coal and industrials sectors.
Wesfarmers Sells Stake in Bengalla
In an announcement to the ASX today, Wesfarmers said it will sell its 40% ownership position in the Bengalla mine, a coal mine in the Hunter Valley of New South Wales, for $860 million.
Currently, Bengalla is owned by Wesfarmers (40%), New Hope Corporation (40%), Taipower (10%) and Mitsui (10%). Bengalla has the approval to produce up to 15 million tonnes of coal, which is used in energy production and for export to Asia.
Wesfarmers has owned part of Bengalla since 1991 but says it’s time to part ways with the mine.
“We believe this agreement with New Hope is in the best interests of our shareholders and ensures a smooth transition in the ownership structure of the Bengalla joint venture,” Wesfarmers Managing Director Rob Scott said.
Wesfarmers has been a focal point for investors in 2018 as the company plans to divest its Coles business and mulls other capital initiatives in the face of competition across its retail lines.
The deal remains subject to the approval from regulators and partners but is expected to settle in the fourth quarter of 2018. Wesfarmers says it will report a pre-tax profit of $670 million from the sale.
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