New Hope Outlines $1.8B Malabar Merger Targeting 18.9Mt Long Term Output
Key Takeaways
- New Hope would acquire Malabar in an all-scrip scheme at 0.500 New Hope shares per Malabar share, valuing Malabar at $1.8 billion and currently $2.92 per share, though that value moves with New Hope's share price.
- Existing New Hope shareholders would own about 79% of the Combined Group, with outside Malabar shareholders holding about 21%.
- The Maxwell mine adds 2,320Mt of resources, lifting attributable resources about 82% to ~5.2Bt, with longwall ROM output rising from ~40kt in April 2026 to ~195kt in June 2026.
- Pro forma net gearing is about 3% and net leverage about 0.2x, but those figures rely on New Hope's $514m FY26 EBITDA alone and the group would carry $0.9bn of debt.
- Completion is targeted for February or March 2027, subject to Malabar shareholder, Court, Independent Expert and Japan Fair Trade Commission approvals, with a reciprocal break fee of about A$17 million.
New Hope outlines all-scrip combination with Malabar at $1.8 billion
In its 19 October 2026 investor presentation, New Hope Corporation (ASX:NHC) outlined the New Hope Malabar merger as a court-approved scheme of arrangement. Malabar shareholders would receive 0.500 New Hope shares per Malabar share, currently valued at $2.92 per Malabar share.
That value is not fixed. It changes with New Hope’s share price, and the ratio is subject to adjustments for New Hope dividends, with specifics set out in the Scheme Implementation Deed.
The presentation put the total fully diluted transaction equity value for Malabar (100% basis) at $1.8 billion. Existing New Hope shareholders would own approximately 79% of the Combined Group, with Malabar shareholders (other than New Hope) owning approximately 21%.
Malabar would represent approximately 29% of the Combined Group on a 100% basis. That figure includes New Hope’s existing interest of approximately 25.97% in Malabar, so it is a different measure from the 21% held by outside Malabar shareholders.
Both Boards unanimously support the Scheme, and the Malabar Board recommends that Malabar shareholders vote in favour. Malabar directors (other than Rob Bishop, a New Hope nominee) who collectively hold approximately 13% of shares intend to vote in favour, in the absence of a Superior Proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Malabar shareholders (other than New Hope).
Headline strategic statement from the presentation
“Combination of New Hope and Malabar creates a leading ASX listed producer of low-cost, high-quality coal.”
When big ASX news breaks, our subscribers know first
Maxwell and the enlarged portfolio
The Malabar asset at the centre of the deal is the Maxwell mine. Here is what the presentation said about it.
Maxwell mine at a glance
Maxwell is an underground mine in the Upper Hunter Valley. New Hope outlined a target to ramp up to ~5.5Mtpa of saleable production (Mtpa means million tonnes per annum), with a fully approved life of 20+ years.
Maxwell is expected to be a first quartile cost producer of premium high-quality thermal coal, based on Wood Mackenzie’s Q2 2026 Seaborne Thermal Cost Curve. It can also produce a semi-soft coking coal product, and its resource base is 2,320Mt.
The longwall, a high-capacity mining method, is still ramping up. First longwall coal came in April 2026, and longwall ROM (run-of-mine, meaning raw coal before processing) production rose from ~40kt in Apr-26 to ~195kt in Jun-26. The presentation described a Stage 1 target of ~3Mtpa of saleable production.
Pro forma portfolio
The Combined Group would hold three operating coal mines. The table below reproduces the presentation’s snapshot.
| Asset | Interest | Mine type | FY26 saleable production (Mt) | Long-term target (Mtpa) |
|---|---|---|---|---|
| Bengalla | 80% JV | Open-cut | 8.2 (80%) | 8.4 (80%) |
| New Acland | 100% | Open-cut | 3.3 | 5.0 |
| Maxwell | 100% | Underground | 0.6 | 5.5 |
The long-term target refers to the targeted steady-state production profile beyond the next five years.
On an attributable basis, combined saleable production was 11.7Mt in FY26. The presentation showed an indicative 18.9Mt long-term, about 2.6x the 7.2Mt of FY23. FY27 to long-term figures are indicative only, based on current life of mine schedules, and are not a forecast.
Why the combination makes strategic sense
Scale, quality and synergies
Attributable resources would rise by approximately 82% to ~5.2Bt, an increase of 2,320Mt. Weighted average energy would be ~5,970 kcal/kg NAR for the Combined Group versus ~5,730 for New Hope standalone. Both figures are indicative.
The presentation listed several areas for value creation:
- Marketing: optimising product blending and leveraging customer relationships
- Logistics: capturing efficiencies across rail, port and infrastructure
- People: sharing operational capability and expertise
- Shared services: leveraging New Hope’s established corporate platform
- Capital: supporting the Maxwell ramp-up through the Combined Group’s financial platform
- Tax: potential tax efficiencies
Bengalla and Maxwell sit close together in the Upper Hunter precinct, which underpins the logistics and regional growth points.
What coal is and why the market outlook matters
Thermal coal is burned to generate electricity. Semi-soft coking coal is used in steelmaking, and Maxwell’s longwall is expected to produce both.
A “first quartile” position on the cost curve means a mine’s costs sit in the cheapest 25% of comparable producers. For you as an investor, lower-cost mines generally keep more margin when coal prices fall, though the presentation does not make that claim itself.
The presentation cited Commodity Insights (July 2026) showing a ~123Mt shortfall in Australian thermal coal supply versus base case demand by 2048. New Hope framed the ramp-ups at Maxwell and New Acland as well positioned for that outlook.
Benefits for Malabar shareholders
The presentation listed these benefits:
- Recognition of value created at Malabar, with greater portfolio diversification
- Listed liquidity through ASX quoted New Hope shares
- Retained exposure to Maxwell Mine and Maxwell extension projects
- Exposure to Bengalla and New Acland, and New Hope’s significant financial capacity
The next major ASX story will hit our subscribers first
Balance sheet strength and next steps
Pro forma financials
The table below shows the capitalisation figures from the presentation.
| A$bn, unless indicated | New Hope | Malabar (100% basis) | Pro forma |
|---|---|---|---|
| Equity value | 4.9 | 1.8 | 6.3 |
| Cash (last disclosed) | 0.8 | 0.1 | 0.8 |
| Debt (last disclosed) | 0.2 | 0.7 | 0.9 |
| Enterprise value | 4.4 | 2.4 | 6.4 |
Cash balances are dated differently: New Hope at 31 July 2026 and Malabar at 30 June 2026. Pro forma net gearing is approximately 3%, and net leverage is approximately 0.2x, based on New Hope’s FY26 Underlying EBITDA of $514m only, which excludes Malabar.
The presentation also estimated an incremental free float market cap of ~$1.3bn. A larger free float generally means more shares available to trade.
Post completion, the Combined Group will consider pathways to optimise its capital structure, including refinancing Malabar’s existing debt facilities. New Hope also pointed to its dividend record, including 40cps for FY26.
Timetable and conditions
Transaction completion is targeted for February / March 2027. All dates are indicative only and subject to change, necessary approvals and court availability.
- First Court Hearing: December 2026 / January 2027
- Scheme Booklet dispatched to Malabar shareholders: December 2026 / January 2027
- Malabar Scheme Meeting: January / February 2027
- Second Court Hearing: February / March 2027
- Effective Date: February / March 2027
- Record Date: February / March 2027
- Implementation Date: February / March 2027
The Scheme is subject to Malabar shareholder approval and Court approval, and to the Independent Expert concluding (and continuing to conclude) that it is in the best interests of Malabar shareholders (other than New Hope). Other customary regulatory approvals and Japan Fair Trade Commission approval are also required.
A reciprocal break fee of approximately A$17 million is payable in certain circumstances. New Hope’s existing Malabar shares will not be voted at the Scheme meeting.
Malabar nominees Wayne Seabrook and Tony Haggarty are to join the Combined Group board upon completion. The milestones to watch are the Scheme approvals and the continued Maxwell longwall ramp-up.
Get ASX Coal News Before the Market Moves
Join 30,000+ investors receiving FREE breaking ASX mining and energy news within minutes of release, with in-depth analysis already done. Click the “Free Alerts” button at Big News Blast to stay ahead of the next major coal announcement the moment it breaks.