Centennial is an Australian-owned thermal and coking coal producer which supplies both local and export markets from the six mines it currently operates in New South Wales and Queensland.

Centennial is paying a total of US$36 million with the effective date of acquisition being January 1. The majority of the funds were paid on December 8, with a second instalment due in six months time.

The first instalment was funded through debt provided by ANZ, the company's banker, and the proceeds of an equity raising concluded last week. Ord Minnett underwrote the placement of 5.2 million shares at 62.5 cents per share.

Centennial expectes the acquisition to immediately contribute to profitability with a significant increase in earnings per share in 2001.

"In addition, the acquisition is highly cash generative with EBITDA per share increasing to 43 cents per share in 2001 and a further increase is anticipated in 2002," Centennial said.

“A significant attraction of the Springvale acquisition is the mine's indexed long-term sales contract which supplies the local Mt Piper Power Station until 2013.”