KEY POINTS:
The pool of shares available to the public in the pending Pike River Coal float may be scant as the West Coast Development Trust looks likely to try to secure a big stake in the company.
Pike River, 61 per cent owned by New Zealand Oil and Gas, is due to publish an investment statement and prospectus this month for its much delayed $60 million to $65 million initial public offer.
The money will go towards the $174 million cost of developing a mine in the Paparoa Range, northeast of Greymouth, which will produce high-quality coking coal for export to steel makers.
Grey District Mayor Tony Kokshoorn, also one of the trustees of the West Coast Development Trust, said last week the trust would likely be investing in the mine.
"We're extremely confident the float will have no problem coming off."
The trust was set up to administer $92 million of a $120 million grant made in 2000 to help the West Coast economy adjust to the Government's policies to end the logging of indigenous forest.
The trust is charged with promoting sustainable employment opportunities and generating sustainable economic benefits for the region.
Kokshoorn is also chairman of Greymouth's port operator Port Westland. The port is to get a $20 million redevelopment to handle coal shipments from the Pike River mine, in what Kokshoorn has said is part of an economic renaissance for the area.
But trust chairman Frank Dooley said the trust hadn't decided whether it would take a position on the IPO.
The trust had been involved in discussions with Pike River's three independent directors before they resigned in December but Dooley was unaware of any further talks since then.
It is understood that First NZ Capital had been working on the float and was to underwrite it, but withdrew after being spooked by the resignation of the directors.
Pike River and NZOG said they were unable to give details before the prospectus was released.
This week NZOG company secretary Brian Roulston confirmed that one of Pike's Indian shareholders, either Gujarat NRE Coke or Saurashtra Fuels, was to partly underwrite the offer.
The float will also see NZOG shareholders, including Australian institutions which recently upped their NZOG stakes in an oversubscribed rights issue, receive a preferential entitlement.
NZOG shareholders will be offered one Pike River share for every eight NZOG shares held. It is not clear if they will also receive preferential pricing.
"My suspicion is that the Indians, the West Coast Development Trust and the Australian institutions will come in as underwriters to the issue," said one market commentator.
"What stock will be available to the public will essentially come from the shortfall in take-up from NZOG shareholders."
Also crucial to the amount of stock on offer to the public would be the extent to which NZOG sold down its stake in Pike River.
NZOG would be looking to offload part of its holding in the IPO to raise funds for its other exploration and development activities.
The commentator, who did not wish to be named, believed negotiations would focus on how many shares and how much control of Pike River NZOG would retain and how big a stake the West Coast Development Trust would pick up.
