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The Australian unit of coking coal maker Gujarat NRE Coke Ltd has raised Rs 320 crore (Australian $72 million) in funding through an institutional placement. The ASX listed  Australian subsidiary Gujarat NRE Coking Coal Limited issued 72 million shares at 72 cents each through a book building mechanism. The funds would be used for investment in Gujarat NRE's coking coal mines in Australia.

Gujarat NRE Coke Limited, which did not participate in the issue, will see its stake fall down to 69% from earlier 77% to around 69% in Gujarat NRE Coking Coal. The shares of Gujarat NRE Coke were trading at Rs 50.40 per unit, down by 1.66% at 1:06 pm today.

Gujarat NRE Coke will invest in two producing hard coking coal mines, NRE No.1 Colliery and NRE Wongawilli Colliery, located south of Sydney in Wollongong. The company plans to develop and refurbish existing facilities at these mines with an aim of achieving 6 million tonnes per annum of coking coal production by 2014–2015.

“This equity raising will provide important additional capital to complement funding available through GNM’s debt facilities. GNM’s overall funding package will provide for initial development activity required to realise our objective of materially increased coking coal production," said Gujarat NRE Coke chairman Arun Kumar Jagatramka.

UBS AG, Australia Branch acted as the sole lead manager, book runner and underwriter of the Placement. Ernst & Young Transaction Advisory Services Limited acted as financial advisor.

For nine months ended December 2010, the income of Gujarat NRE Coke stood at Rs 1,134.56 crore, up by 13%. The profit-before-tax (PBT) stood at Rs 66.73 crore, which was 3% lower on a Y-o-Y basis.

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