Coal of Africa Limited £9.4 million equity investment & $10 million loan (0787V)
August 05 2015 - 2:00AM
UK Regulatory
TIDMCZA
RNS Number : 0787V
Coal of Africa Limited
05 August 2015
ANNOUNCEMENT 5 August 2015
GBPGBP9.4 million equity investment and US$10 million loan
Coal of Africa Limited ("CoAL" or "the Company") is pleased to
announce that it has entered into a Subscription Agreement and a
Loan Agreement with Singapore registered Yishun Brightrise
Investment PTE Limited ("Yishun"). Yishun is a private investment
company with a focus on mineral investments and has interests in
coal and nickel in both China and Indonesia and will via this
transaction expand its investments into Africa.
Under the Subscription Agreement, Yishun has agreed to acquire
up to 183,231,261 ordinary shares (approximately 9.5% of the issued
share capital of the Company) in the Company (the "Subscription
Shares") at a price of 5.15 British pence per share, equal to the
volume weighted average price of CoAL shares for the 30 days up to
17 July 2015, making an aggregate subscription amount of GBPGBP9.4
million (approximately US$14.7 million) which is currently held in
escrow. The Subscription Agreement is conditional upon, amongst
others, CoAL shareholder approval. The Company expects to hold an
Extraordinary General Meeting ("EGM") within 60 days of this
announcement at which shareholder approval for the issue of the
Subscription Shares will be sought. A circular convening the EGM
will be sent to shareholders in due course.
The subscription proceeds will be used to finance
pre-construction costs at the Makhado coking and thermal coal
project ("Makhado Project" or the "Project") and for general
working capital.
Yishun has also expressed an intention to acquire a strategic
interest in the Makhado Project and the parties have agreed to
enter into discussions in due course. The package being discussed
includes an equity investment in the Makhado Project, the provision
of a shareholder loan on commercial terms providing the debt
required for the development of the colliery and, the award of the
Makhado Project engineering, procurement and construction ("EPC")
contract on commercial terms.
In connection with these matters, CoAL and Yishun have also
entered into a Loan Agreement pursuant to which Yishun has agreed
to lend CoAL US$10 million (approximately GBPGBP6.4 million),
conditional upon the Company's shareholders approving the issue of
the Subscription Shares. The loan will bear no interest and is only
repayable if:
-- Yishun has not received the Subscription Shares by the date
which is five business days after the 90th day (or a later date as
agreed) after the Subscription Agreement was signed;
-- an unrelated third party makes an equity investment in the
Makhado Project on or prior to 30 June 2016;
-- on or prior to 30 June 2016, CoAL or Baobab Mining &
Exploration (Pty) Ltd ("Baobab"), the Company's subsidiary that
owns the Makhado Project, decides not to proceed with the sale of
an equity interest in Baobab, to Yishun or its associates;
-- on or prior to 30 June 2016, Baobab or CoAL is put into
administration, liquidation or similar proceedings are
commenced;
-- on or prior to 30 June 2016, Baobab ceases to be the holder
of the New Order Mining Right for the Makhado Project or the
Makhado Project is prohibited from being mined as a result of a
permanent regulatory prohibition; or
-- on or prior to 30 June 2016, CoAL or Baobab enters into an
agreement to sell to Yishun (or its designate, acceptable to CoAL)
an equity stake in Baobab and, CoAL or Baobab decides to not fulfil
the conditions precedent contained therein requiring:
o the entering into of the Makhado Project EPC contract on
commercial terms; and/or
o the entering into of an agreement in terms of which Yishun (or
its designate, acceptable to CoAL) provides a shareholder loan on
commercial terms providing the debt required for the development of
the Makhado Project.
Commenting today, Mr David Brown, Chief Executive Officer said:
"Yishun's investment in CoAL, combined with the US$10 million loan
to the Company represents a significant step forward in the process
to identify a strategic partner for our flagship Makhado hard
coking and thermal coal project. The Company looks forward to
progressing negotiations with Yishun or its related parties in
order to further their potential investment in the Project. The
CoAL board supports Yishun's investment and shareholders will be
updated as negotiations between the parties progress.
"The Company received the Makhado Project mining right in May
2015 and anticipates that the Integrated Water Use Licence will be
granted in due course. The granting of these rights triggers
obligations and the funds received from Yishun will be used to
settle these liabilities, progress the Makhado Project and for
general working capital purposes."
David Brown
Chief Executive Officer
For more information contact:
Chief Executive +27 10
David Brown Officer Coal of Africa 003 8000
Chief Financial +27 10
De Wet Schutte Officer Coal of Africa 003 8000
+27 10
Celeste Harris Investor Relations Coal of Africa 003 8000
Endeavour
Corporate +61 08
Tony Bevan Company Secretary Services 9316 9100
Company advisors:
Nominated
Matthew Armitt/Ross Adviser and Peel Hunt +44 20
Allister Broker LLP 7418 8900
Financial
Jos Simson/Emily PR (United +44 20
Fenton Kingdom) Tavistock 7920 3150
Charmane Russell/Jane Financial Russell & +27 11
Kamau PR (South Associates 880 3924
Africa) or
+27 82
372 5816
Investec Bank Limited is the nominated JSE Sponsor
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and
mining company operating in South Africa. CoAL's key projects
include the Vele Colliery (coking and thermal coal), the Greater
Soutpansberg Project /MbeuYashu, including CoAL's Makhado Project
(coking and thermal coal).
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFMGGRFDRGKZM
Coal of Africa (LSE:CZA)
Historical Stock Chart
From Jul 2024 to Jul 2024
Coal of Africa (LSE:CZA)
Historical Stock Chart
From Jul 2023 to Jul 2024