VANCOUVER (CP) -- Western Canadian Coal Corp. [TSX:WTN] says it has received "a number" of proposals to buy all or part of the company, news that sent its once-suffering stock up nearly 22% to a record high Wednesday, despite a deepening loss in 2007.
The Vancouver-based company, which six months ago was in financial trouble before coal prices soared and it secured a new lender, said it has invited a "select group of interested parties" to the next round of acquisition discussions.
It provided no details about possible bidders.
Analysts speculate the interested parties could range from London-based Cambrian Mining [AIM:CPM], which owns about 40% of Western Canadian Coal, to Anglo American PLC [LSE:AAL; Nasdaq:AAUK], another London-headquartered company, which has interests in British Columbia coal properties not far from Western Canadian's mines.
Other options might include Asian steel companies or Audley Capital Advisors, which helped bail out the company last year.
"There are a wide number of possibilities," said one analyst who didn't want to be identified.
Western Canadian Coal stock jumped C$1.90, or 21.84%, to C$10.60 on the Toronto Stock Exchange Wednesday after it updated its strategic review process. More than six million shares were traded.
The company announced the review in mid-December, when its stock was sitting just above C$1. It was trading at 47 cents last November, its lowest level in almost four years.
Western Canadian said then the review was needed to move forward with its Falls Mountain and Brule developments, calling it "an opportune time to review strategic alternatives" given predictions of rising prices for metallurgical coal used in steelmaking.
Bad weather in China and Australia has impacted infrastructure and curbed production, squeezing global supply and causing coal prices to triple in the past year.
Last month, Western Canadian said it had negotiated a majority of its 2008 coal year contracts for its hard coking coal an average above US$300 per tonne - 365% higher than the year before. It also set most of its 2008 contracts for its low-volatile pulverized coal injection coal at US$248 per tonne, up 350%.
Last year, when Western Canadian Coal was in its first year of price negotiation, it offered some discounts and trial shipments to get customers acquainted with its product.
Earlier this year, Western Canadian secured US$30 million in bridge financing from Audley European Opportunities Master Fund, to repay existing project financing and speed up expansion at the Willow Creek mine in B.C.
Audley also holds US$30 million of the company's convertible debentures along with warrants to buy up to 2.6 million shares, which could give the investor about 20% of Western Canadian.
Western Canadian also said Wednesday it had a net loss of C$106 million or 95 cents per share in the year ended March 31, compared with a prior-year loss of C$13 million or 14 cents per share.
Analysts surveyed by Thomson Financial were looking for a loss of 76 cents per share.
The year's results included C$23.6 million in one-time adjustments and losses stemming from the high Canadian dollar, the company said.
Sales were C$252.5 million, up 88% from C$134.1 million the year before, as coal volumes sold rose to 3.04 million tonnes.
Fourth-quarter sales were C$75.3 million, up C$44.8 million from the same quarter last year. The quarterly loss amounted to C$37.8 million, 33 cents per share, compared to a loss of C$3.3 million or three cents per share.
However, "With record coal prices this year now expected to continue into the next fiscal year, Western Canadian Coal expects to generate high positive cash flows in the near term and for the upcoming years," stated CEO John Hogg.
(c) The Canadian Press 2008
