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Pike River Coal's much delayed $65 million initial public offering has been "substantially" oversubscribed, leading it to say heavy interest from Australian investors augurs well for its transtasman dual listing.
Chief executive Gordon Ward said it was too early to know how much of its $20 million oversubscription allowance had been taken up by investors, but the Business Herald understands the total will top $80 million.
The float of the West Coast mine was initially intended for 2005 and closed on Tuesday. It was put off four times and involved 65 million shares at $1 each, with an option for 20 million additional shares.
"I'm delighted with the strong support and it means Pike River will become New Zealand's first listed coal company for 28 years," Ward said.
"The solid support for the IPO from Australia bodes well for our Australian listing."
Chairman John Dow expected Australians would take up to 20 per cent of the total shares. Ward said Pike River was still on track to list on the NZX and ASX on July 20.
Andrew McDouall, managing director of McDouall Stuart Securities, which is underwriting the float, said there had been strong interest from New Zealand investors and from shareholders in Pike River's parent, New Zealand Oil and Gas, who had the right to one Pike River share for every eight they owned.
There was also "good" institutional interest from New Zealand, Australia and elsewhere overseas.
The IPO completes the second stage of a three-stage financing plan for the mine, whose development is expected to cost $207 million and take until March next year to complete.
Before the float, deals with Indian investors Saurashtra Fuels and Gujarat NRE Coke to buy the mine's high-grade, low-ash coking coal pumped $65 million into the mine.
Guy Hallwright, of Forsyth Barr, one of two research houses covering the issue, said the rest of the financing would likely be achieved through debt finance.
He said the success of the IPO was "good going" but development of the mine still had a "fair way to go".
If the float hits $85 million, NZOG's shareholding is expected to drop from 54 per cent to 31.1 per cent, with Gujarat holding 11.1 per cent, and Saurashtra Fuels 9.5 per cent.
The mine will produce on average 1 million tonnes a year from 2009 on and 17.6 million tonnes in its 19-year life.
