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Dalrymple Bay likely to hit the market with $2.4 billion value

Business

The Dalrymple Bay Coal Terminal is likely to have a market value of about $2.4 billion when it launches its initial public offering, indicating there is still a taste for Queensland metallurgical coal.

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The asset is currently owned by Brookfield Asset Management and it is likely a prospectus will be released within days.

The stock is expected to have a yield of about 5 to 6 per cent making it attractive to investors, but there is still likely to be a section of the investment community that will shy away from investing in coal, even if the company is dealing with mostly metallurgical coal for steelmaking.

The IPO is expected to be the biggest of 2020.

Revenue from access charges is expected to be about $200 million for 2020.

The asset is regulated by the Queensland Competition Authority which means it has a more predictable revenue and it services the rich Bowen Basin coal mines which produce some of the world’s best coal.

However, the market has been impacted by what has been assumed as a ban on Australian coal by China. The pandemic has also had a severe impact on steel production but there have been signs of a revival.

The Queensland Government has indicated that it would be interested in buying a stake in the company which it once owned.

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