Yanzhou Told to Lower Stake in Yancoal Australia

Bloomberg reported that Australia’s foreign investment regulator said that Yanzhou Coal Mining Co. Ltd. (NYSE:YZC) must abide by an agreement to lower its stake in Yancoal Australia Ltd. (ASX:YAL). The company is supposed to make 30 percent of Yancoal’s shares available to Australian investors by the end of the year.

As quoted in the market news:

Yanzhou Coal, which owns 78 percent of Yancoal, in July proposed to purchase the rest of the company from shareholders including Noble Group Ltd., a plan that ran counter to FIRB’s requirement. The regulator’s stance means Yanzhou Coal has less than two months to sell at least 8 percent of Yancoal.

Yanzhou Coal’s agreement to cut its stake stems from its purchase of Felix Resources Ltd. for A$3.3 billion ($3.1 billion) in October 2009. After buying Felix, Yanzhou Coal renamed the company Yancoal. At the time, FIRB ruled that Shandong-based Yanzhou Coal must list a minimum of 30 percent of its Australian by the end of 2012.

Click here to read the full Bloomberg report.