CZA Coal of Africa

 

TIDMCZA 
 
RNS Number : 9262D 
Coal of Africa Limited 
11 December 2009 
 
? 
 
 
 
 
 
 
ANNOUNCEMENT11 DECEMBER 2009 
BLACK ECONOMIC EMPOWERMENT AGREEMENT EXECUTED 
 
 
Further to its announcement on 30 September 2009, Coal of Africa Limited ("CoAL" 
or the "Company"), the  AIM/ASX/JSE listed coal mining and development company 
operating in South Africa (ticker: CZA), is pleased to confirm that it has now 
executed formal agreements with Firefly Investments 163 (Proprietary) Limited 
("Firefly"), its Broad-Based Black Economic Empowerment ("BBBEE") partner 
("BBBEE Agreements"), as part of CoAL's efforts to ensure compliance with South 
African legislative requirements for black empowered groups to hold at least a 
26% participation in mining companies by 2014 and to pave the way for the 
Company's long term future in South Africa ("BEE Transaction"). 
Firefly, which is wholly owned and controlled by historically disadvantaged 
South Africans, will lead the BBBEE consortium. Firefly's current shareholders 
include Mosomo Investment Holdings (Proprietary) Limited and Mtungwa Resources 
(Proprietary) Limited, companies lead by Kgomotso Brian Mosehla and Patrick 
Ntshalishali. 
The BBBEE agreements, which have been entered into by CoAL, Coal Investments 
Limited ("CIL") and Firefly, provide the BBBEE partners with the option to 
subscribe for a total of 50 million CoAL shares for 60 pence each ("Option") 
between 1 November 2010 and 1 November 2014. Firefly cannot exercise the Option 
prior to 1 November 2010, except in certain limited circumstances such as a 
change in control of the Company. The number of CoAL shares to be issued 
pursuant to the BBBEE Agreements will be adjusted if CoAL undertakes a bonus or 
pro rata issue of shares, as described in the attached schedule. The agreement 
to enter into the BBBEE Agreements was made pursuant to Listing Rule 7.1 of the 
ASX Listing Rules, under CoAL's existing 15% capacity. In addition, the Option 
will be subject to certain regulatory approvals, including the approval of the 
Australian Foreign Investment Review Board. The 50 million CoAL shares to be 
issued in the event the Option is exercised represent approximately 9.53% of 
CoAL's current issued capital on a diluted basis. 
Firefly will have the right to nominate two persons to the CoAL board and has 
undertaken to procure that the King of the VhaVenda from the Limpopo province, 
His Majesty Khosi Khulu Toni Mphephu Ramabulana (the "King"), holds a 
shareholding and beneficial interest in Firefly within a period of three months 
from satisfaction of the conditions precedent to the BBBEE Agreements. The King 
represents his constituents of the Mudimeli, Musekwa, Makushu-Musholombi and 
Tshivhula communities, relevant female empowerment and youth groups, as well as 
a special purpose vehicle to promote and develop entrepreneurs and other 
specific community groups in the Limpopo province. 
As previously advised, to facilitate the BEE Transaction the Company's second 
largest shareholder, African Global Capital I, LP, an entity associated with 
Mvelaphanda Holdings (Proprietary) Limited, Palladino Holdings Limited and OZ 
Management LP, and its affiliate CIL, which currently hold in aggregate 15.03% 
of the issued capital of CoAL, have entered into an agreement with Firefly in 
terms of which amongst other things, they will cede their voting rights over the 
ordinary shares of CoAL to Firefly. 
AUTHORISED BY: 
Simon Farrell 
Managing Director 
 
 
For more information contact: 
Simon Farrell, Managing Director 
                       CZA 
                             +61 417 985 383      or     +61 8 9322 6776 
Peter Bacchus/ Alastair Cochran 
                    Morgan Stanley 
     +44(0) 20 7425 8000 
Simon Edwards/ Chris Sim   Evolution Securities  +44(0) 20 7071 4300 
Jos Simson/ Leesa Peters  Conduit PR 
                  +44(0) 20 7429 6603 
Melanie de Nysschen/ Thembeka Mgoduso 
     Macquarie First South Advisers                    +27(11) 583 2000 
 
 
About CoAL: 
Coal of Africa Limited ("CoAL") is an AIM/ASX/JSE listed coal mining and 
development company operating in South Africa.  CoAL has three key projects 
including the 113 million tonne ('mt') Mooiplaats thermal coal mine, the 656 mt 
Vele coking coal project and the 1 bn tonne Makhado coking coal project. 
 
 
The Mooiplaats coal mine commenced production in 2008 and is currently ramping 
up to produce 2 mtpa. CoAL's Vele and Makhado coking coal projects are expected 
to start production in H1 2010 and Q4 2011 respectively producing an initial 2 
mtpa rising to a combined annual output of 10 mtpa of coking coal. 
 
 
 
 
 
 
 
 
 
 
SCHEDULE 
 
Bonus Issues 
1.1      If the Company makes a bonus issue of Shares or other securities pro 
rata to holders of Shares (other than an issue in 
           lieu or in 
satisfaction of dividends or by way of dividend reinvestment) and not all of the 
Option Shares have 
           been allotted in respect of the Option before 
the record date for determining entitlements to the bonus issue then the 
 
     rights attaching to the Option will be altered as follows: 
            1.1.1     the number of Option Shares (S) is determined by the 
formula: 
           S = N + (N x R) 
            1.1.2     the Option Price is the greater of the par value (if any) 
of the Share and the sum (EP) determined by the formula: 
EP =       N x OP 
           _________ 
 

          N + (N x R) 

(fractions are to be rounded up to the nearest penny) 
          where: 
N =    The Outstanding Option Shares on the record date to determine Firefly's 
entitlements to the bonus 
 issue. 
R =    The number of Shares (including fractions) offered under the bonus issue 
for each Share held. 
OP = The Option Price which applies on the record date to determine entitlements 
to the bonus issue. 
Pro rata issue 
1.2      If the Company makes an offer of Shares pro rata to all or 
substantially all holders of Shares (other than an issue in 
            lieu 
or in satisfaction of dividends or by way of dividend reinvestment) for a 
subscription price and not all of the 
            Option Shares have been 
allotted in respect of the Option before the record date for determining 
entitlements to the 
            rights issue then the Option Price will be 
reduced according to the following formula: 
O'=O - E [P - (S + D)] 
 

         _____________ 

                 N + 1 

(fractions are to be rounded up to the nearest penny) 
where: 
O'=    The new Option Price. 
 
 
O=    The old Option Price. 
E =    1 
P =    The weighted average market price of fully paid Shares sold in the 
ordinary course of trading 
 

         on ASX during the five trading days 

ending on the day before the ex rights or ex entitlements date. 
S =    The subscription price of new Shares issued under the pro rata issue. 
D =    Any dividends due but not yet paid on existing Shares which will not be 
payable in respect of new 
 

         Shares issued under the pro rata issue. 

N =    The number of Shares with rights or entitlements that must be held to 
receive a right to one new Share. 
The number of Option Shares will not change. 
Reconstruction 
1.3      If, at any time there is a reconstruction of the capital of the Company 
("Reconstruction"), the Option under this 
 

           Agreement, to the 

extent it has not been exercised, will be reconstructed in the manner specified 
below: 
           1.3.1      in a consolidation of capital, the number of Option Shares 
must be consolidated in the same ratio as the 
 
Shares and the Option Price must be amended in inverse proportion to that ratio; 
           1.3.2      in a sub-division of capital, the number of Option Shares 
must be sub-divided in the same ratio as the Shares 
 
  and the Option Price must be amended in inverse proportion to that ratio; 
           1.3.3      in a return of capital or other distribution (whether in 
cash or in specie), the number of Option Shares must 
 
   remain the same, and the Option Price must be reduced by the same amount as 
the amount returned or the 
 

                         amount of the 

distribution in relation to each ordinary security; 
           1.3.4      in a reduction of capital by cancellation of capital paid 
up on Shares that is lost or not represented by 
 
available assets where no Shares are cancelled, the number of Option Shares and 
the Option Price of the 
 

                         Option must remain 

unaltered; 
            1.3.5     in a pro rata cancellation of Shares, the number of Option 
Shares must be reduced in the same ratio as the 
 
Shares and the Option Price of the Option must be amended in inverse proportion 
to that ratio; and 
            1.3.6     in any other case, the number of Option Shares, or the 
Option Price, or both, must be reorganised so that 
 
 Firefly does not receive a benefit that holders of Shares do not receive. 
Nothing in sub-clause 1.3.6 prevents a rounding up of the number of Option 
Shares to be received on exercise of the Option if the rounding up is approved 
at the shareholders' meeting that approves the Reconstruction, and the terms of 
the Option will be construed accordingly. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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