Gloucester Coal and Yancoal Australia may get hitched after all

Gloucester Coal is recommending that its shareholders approve a merger with China’s state-owned Yancoal Australia, despite a smaller cash payment than first offered.

The Australian arm of Yanzhou Coal will contribute roughly A$300 million $320 million less debt to the newly created company, which would become the biggest independent coal producer in Australia. The modifications to the terms of the deal that was first announced in December reflect revised debt calculations, the Australian coal company said in a statement.

The reduced debt was due to a fall in the Australian dollar value of Yancoal’s US dollar debt as well as Gloucester’s half-year reported increased net debt of...