The placement, expected to be implemented by mid-2012, is subject to necessary shareholder and regulatory approval.

SK Networks intends to subscribe to about 585.1 million Cockatoo shares at an issue price of 53.5c per share, representing a 47% premium to the last closing price of Cockatoo.

SK Networks currently has a 5.5% interest in Cockatoo.

Under the agreement, SK Network has agreed to not to increase its stake in Cockatoo beyond 40% for a period of four years from the date of the placement.

Cockatoo Coal managing director Mark Lochtenberg said the placement would provide significant financial benefits to shareholders of Cockatoo.

“We are pleased to announce the strengthening of our relationship with SK Networks,” he said.

“Importantly, the proposed placement puts Cockatoo in a strong funding position to pursue its pipeline of attractive growth projects and validates the quality of Cockatoo’s assets.”

The cash injection will specifically enable Cockatoo to secure capacity for rail and port infrastructure for its Surat Basin assets and will provide capital to support the expansion of its Baralaba mine in the Bowen Basin.

The placement will also enable Cockatoo to strengthen its portfolio of exploration and development assets.

If the placement proceeds, it’s anticipated that Cockatoo will have a pro forma market capitalisation of $A684 million.

The much needed funds come at a crucial time for Cockatoo who are expected to pay its share of the Wiggins Island Coal Terminal.

The miner has a large portfolio of coal tenements in Queensland’s Surat and Bowen basins.

Cockatoo is aiming to produce 2.8 million tonnes of coal in 2014, ramping up to 9.9Mt by 2016.