New Hope to Buy the Rest of Malabar in an All-Scrip Scheme, Creating a A$6.3 Billion Coal Group

New Hope already owned a quarter of Malabar. On Monday it agreed to own all of it — and to pay Malabar's other owners in its own shares.

New Hope Corporation Limited (ASX: NHC) announced on Monday, October 19, 2026 that it has entered into a binding Scheme Implementation Deed with Malabar Resources Limited under which New Hope will acquire all of the Malabar shares it does not already own by way of a scheme of arrangement. Malabar shareholders other than New Hope will receive 0.500 New Hope ordinary shares for each Malabar share held, implying A$2.92 per Malabar share based on New Hope's closing share price of A$5.84 on October 16, 2026, an equity value for 100% of Malabar of approximately A$1.8 billion on a fully diluted basis and an implied enterprise value of approximately A$2.4 billion. All New Hope and Malabar figures in this article are Australian dollars unless stated otherwise.

A quarter stake becomes the whole mine

New Hope currently holds a relevant interest of approximately 26% in Malabar, built up since 2022, and the scheme retires the part-ownership it created. Malabar is an unlisted public company whose asset is the Maxwell Underground Mine near Muswellbrook in New South Wales' Upper Hunter precinct, in close proximity to New Hope's Bengalla Mine. Maxwell commenced longwall production in April 2026, is approved to extract up to 8 million tonnes of run-of-mine coal per year over 20 years, and carries estimated coal resources of 2.32 billion tonnes as at February 28, 2026, about 69% of them in the measured and indicated categories. The exchange ratio equates to approximately 227.8 million new New Hope shares. On implementation, existing New Hope shareholders will own approximately 79% of the combined group and Malabar shareholders other than New Hope approximately 21%, while on a 100% basis Malabar will represent approximately 29% of the combined group, which will have a pro forma market capitalisation of approximately A$6.3 billion.

Scrip, not cash — and the price moves with New Hope's shares

No cash changes hands for the shares themselves. The all-scrip structure preserves New Hope's balance sheet, and the release says the combined group will afterwards seek to refinance Malabar's existing debt facilities, using its enhanced scale and credit profile to cut funding costs; the A$2.4 billion enterprise value is struck on Malabar net debt of approximately A$627 million as at June 30, 2026. Because the consideration is New Hope shares, the value Malabar holders ultimately receive moves with New Hope's share price until implementation — the A$2.92 figure is a fixing on Friday's close, not a promise. New Hope shares rose on Monday, but inside a coal-sector rally rather than on the deal alone: Market Index's afternoon table had New Hope up 4.0% to A$6.08, behind Whitehaven Coal and Yancoal, as Newcastle coal futures rose and China's September coal output fell 6.8%. At A$6.08, the 0.500 exchange ratio implies A$3.04 per Malabar share — this desk's arithmetic on the release ratio, and a reminder that a scrip bid re-prices every day the market is open. New Hope says the deal is expected to be accretive on valuation, and on earnings and cash flow after the Maxwell ramp-up; both are company expectations, not outcomes.

Three mines, a 19-million-tonne pathway

The combined portfolio is three mines at very different stages. Bengalla, in which the group holds an 80% interest, produced 8.2 million tonnes of saleable coal in FY26 with a long-term target of 8.4 million tonnes a year; New Acland produced 3.3 million tonnes against a 5.0 million tonne target; Maxwell produced just 600,000 tonnes of saleable coal in FY26 against a targeted 5.5 million tonnes a year once its longwall expands from a 145-metre face to a 300-metre face and its bord-and-pillar operation is added. Those targets sum to the pathway to approximately 19 million tonnes a year of saleable production the headline promises — which means most of the growth in this deal is a ramp-up that has not happened yet. Chief Executive Rob Bishop said the transaction provides a clear pathway to unlock the full value of the Maxwell Mine for both shareholder groups, at compelling and accretive terms for New Hope holders. Malabar Executive Chairman Wayne Seabrook said the scheme recognises the value Malabar created in bringing Maxwell into longwall production, provides liquidity, and lets Malabar holders keep meaningful exposure to Maxwell's growth inside a larger, more diversified group.

An expert, a 75% vote and a Japanese regulator stand before February

What remains is approvals, on an indicative timetable that runs into early 2027. The scheme needs an Independent Expert to conclude it is in the best interests of Malabar shareholders other than New Hope, approval by Malabar shareholders at the scheme meeting — at least 75% of votes cast and a majority by number of shareholders voting — court approvals, Japan Fair Trade Commission approval and other customary regulatory approvals, and no material adverse change or prescribed event on either side. The Malabar board, other than New Hope nominee Rob Bishop, who did not participate in its deliberations, unanimously recommends the scheme in the absence of a superior proposal and subject to the expert's conclusion, and Malabar directors intend to vote their approximately 13% fully diluted interest in favour. The deed binds Malabar with customary no-shop, no-talk and no-due-diligence exclusivity, with fiduciary exceptions and a New Hope matching right; the deed itself sets both the Malabar break fee and the New Hope break fee at A$17.4 million. New Hope's own Malabar shares are excluded from the scheme and will not be voted. Malabar nominees Wayne Seabrook and Tony Haggarty will join the New Hope board on implementation. The scheme booklet is expected in December 2026 or January 2027, the scheme meeting in January or February 2027, and implementation in February or March 2027, all indicative. Malabar shareholders do not need to take any action at this stage.