The company announced in May it intended to separate the company’s exploration assets into a new vehicle called Aquila Exploration, which would list on the Australian Securities Exchange in December.
However, the company’s share price has taken a battering in recent weeks, falling from more than $A16 in early September to less than $4 earlier this month.
Aquila said it will apply to the Federal Court for orders to cancel the court-ordered scheme meeting that was to be held on Friday, October 31 in Perth.
Once global credit and equity markets have stabilised, the company said the board may revisit the possibility of the demerger.
According to media reports earlier this month, Aquila was in talks with Brazilian miner and joint venture partner Vale over the possible sale of its coal assets.
However, the Australian reported last week that Aquila has put on hold talks with other parties over the potential sale of assets until global market volatility eases.
Aquila said today that its strong cash and liquid assets of $200 million and minimal debt of $15.5 million is an advantage in current market conditions.
In August, the company said the attributable EBITDA guidance for the Isaac Plains coal mine in the 2009 financial year was $110-120 million, and that figure is expected to increase in the 2010 financial year.
Isaac Plains sold a record 463,345 tonnes of coal in the last quarter.
Aquila chief executive officer Tony Poli told International Longwall News the company considered it prudent not to go ahead with the merger, instead keeping hold of the company’s exploration assets and leaving open the possibility of selling those assets to generate cash.
“By not de-merging now we’re preserving the optionality that otherwise would have been lost,” Poli said.
“We’re not currently considering [selling] but we are conserving the optionality.”
Despite this, Poli said there had been strong interest for Aquila’s assets in the market and the company’s market capitalisation still did not reflect the value of either its exploration assets or near-term production.
He also said Aquila would continue to work on its near-term development projects despite the cancellation of the de-merger.
“It’s business as usual for Aquila,” he said.
Poli also said the company had seen no signs of any slowdown in Chinese demand and instead was eyeing a ramp up in exports as port congestion in Queensland eased.
“We’re port constrained from Dalrymple Bay and we’re hoping that the additional capacity will come online in March-April next year and that’s our biggest inhibitor at this stage,” he said.
“There’s no doubt the market is indiscriminating removing value and particularly the coal companies, which have locked in contracts and are enjoying the benefits of reduced currency.
“Until we get more clarity in the market – there are a lot of rumours in the market about demand from China – we believe we should be proceeding as planned.”
Shares in Aquila Resources were last trading nearly 8% or 28c up to $3.94.
