Trading halts remain as Continental moves to raise A$35m
JOHANNESBURG (miningweekly.com) – As South Africa-focused thermal coal producer Continental Coal progressed a A$35.1-million rights issue and a recapitalisation plan, a proposed listing on the JSE has been postponed and trading halts on the Aim and ASX remained firmly in place.
Trading in the company’s shares was halted on January 6, while it attempts to complete a recapitalisation to settle convertible notes that had matured from November 2013 to February 2014.
Trading in its shares would remain suspended until the company concluded the rights issue.
During the three months ended June 30, the group advanced the proposed nonrenounceable pro rata rights issue to raise the A$35.1-million at an offer price of A$0.005 a new share.
The fund raising would allow Continental to complete its planned recapitalisation and restructuring of its balance sheet, substantially reducing the group's total indebtedness, with the proceeds allocated to the repayment of bridging finance, unsecured convertible noteholders, loans and royalty holders and the reduction of other borrowings.
It would also provide funds for the development of the company's advanced coal mining projects and provide working capital.
Institutional and sophisticated investors, as well as commodity trading groups and specialist coal mining investment funds, across Australia, Europe and South Africa, had indicated “strong interest” in participating in the offer, for which Paterson's Securities had been appointed as corporate adviser and lead manager.
QUARTERLY OPERATIONAL OUTPUT
During the quarter to June, Continental reported total run-of-mine (RoM) coal production of 539 089 t – 383 363 t and 155 726 t from the Vlakvarkfontein and Penumbra coal mines respectively. This was a decline on the 560 357 t achieved in the corresponding period the year before owing to the closure of the Ferreira operation.
The RoM output for the year to June reached 2.1-million tonnes - a decrease on the 2.2-million tonnes reported for the previous year.
Total sales for the quarter reached 442 782 t, including 82 053 t of export sales and 360 729 t of domestic sales, while sales for the full year rose to 1.9-million tonnes, from 1.76-million tonnes last year, and comprised export sales of 523 906 t and domestic sales of 1.4-million tonnes.
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