SYDNEY, Aug 2 (Reuters) - Yancoal Australia Ltd YAL.AX said on Wednesday it will look to raise $2.5 billion from investors to acquire the Coal & Allied division of Rio Tinto RIO.AX RIO.L .
Yancoal won a bidding war against commodities giant Glencore PLC GLEN.L by agreeing on a price of $2.69 billion for Coal & Allied. It subsequently announced a deal to sell on a major component of the business to Glencore. miner will conduct a rights offer priced at $0.10 per new share. Yancoal shares closed 40 percent lower at A$0.25.
The deal could give Yancoal, majority-owned by Chinese coal giant Yanzhou Coal Mining Co Ltd 600188.SS , majority interests in three of the 10 largest thermal coal collieries in Australia.
Yanzhou will subscribe to $1 billion worth of the rights offer, while Glencore will account for $300 million, according to Yancoal.
Glencore is also buying 16.6 percent of a Coal & Allied Hunter Valley Operations mine from Yancoal and 32.4 percent from Mitsubishi Corp 8058.T .
Glencore coal chief Peter Freyberg told reporters on Wednesday he was confident Yancoal would raise the funds needed to complete the deal.