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White Energy (ASX:WEC) Company has gone from a largely dormant coal technology Business to one of the more talked-about small caps on the ASX in a matter of months. The catalyst is Nathan Tinkler, the former coal Entrepreneur who has now been appointed executive chair and managing director of the company after shareholders backed a plan to bring his coal Assets into the business.

The plan has three parts: the Acquisition of two coal companies linked to Mr Tinkler, a Capital raising of up to AUD 15mn from new investors, and a board change that puts him at the head of the company.

What has happened

The process began in May, when White Energy signed a non-binding term sheet to acquire Mr Tinkler's private company Oceltip Coal 2 for AUD 4mn.

At an extraordinary general meeting on 28 August, shareholders approved the capital raising, the issue of consideration shares for a second acquisition, broker Options and a loan-funded share plan.

White Energy announced binding agreements for both acquisitions at the end of August. On 11 September, it completed the purchase of Oceltip Coal 2, and Mr Tinkler was appointed managing director and executive chair. Former chair Brian Flannery became a non-executive director.

The assets coming in

Oceltip Coal 2 holds the Tin Hut Creek project, which covers about 4,000 square kilometres in Queensland's Surat Basin, stretching from Wandoan to north of Chinchilla. The agreed purchase price rose to AUD 4.5mn, subject to adjustments, with a further AUD 1mn payable if a Mining Lease is granted. The project is undeveloped.

The second acquisition is Essential Global Resources, which owns the Lolley No. 1 underground metallurgical coal project in Alabama in the United States. The project includes an on-site coal handling and preparation plant and is currently on care and maintenance. White Energy agreed to issue 83,333,333 shares at a deemed price of 6 cents each, worth about AUD 5mn, for the business. Mr Tinkler is described in the company's disclosure as a founding stakeholder in Essential Global Resources, and the consideration shares are subject to 12 months of voluntary escrow.

The funding and the terms for Mr Tinkler

White Energy is raising up to AUD 15mn through the issue of up to 250mn shares at 6 cents each, managed by Aitken Mount Capital Partners, which may receive up to 50mn unlisted options.

He has also agreed to indemnify White Energy for any US tax Withholding Liability above the equivalent of USAUD 750,000 connected with the transactions.

Why investors have piled in

The market reaction has been substantial.

That enthusiasm rests on Mr Tinkler's record from the late 2000s. In 2007 he sold his stake in the Middlemount coal project in Queensland to Macarthur Coal in a deal worth about AUD 275mn, largely in shares. He later built Aston Resources, which merged with Whitehaven Coal in 2012.

His later history is also part of the public record. Mr Tinkler was declared bankrupt in 2016, and the Bankruptcy was annulled in 2018. Those events predate his involvement with White Energy.

What White Energy was before

Before this restructure, White Energy's main asset in the Hunter region was a demonstration and pilot plant in Cessnock for processing low-grade and waste coal. The Tinkler plan effectively gives the ASX-listed company a new direction as a coal project owner and developer.