JOHANNESBURG (miningweekly.com) – Yishun Brightrise Investment (YBI) will soon hold 19.28% of Coal of Africa Limited’s (CoAL’s) share capital, following the conversion of a $10-million loan repayment into equity.
CoAL in September 2015 entered into a loan agreement with YBI for $10-million.
In May 2016, CoAL and YBI amended the terms of the loan to specify the conditions that would trigger the repayment of the loan. The parties had agreed that if none of the agreed conditions were triggered by the long-stop date of December 31, 2016, the loan amount would be converted into equity at a price of $0.04081 a share.
The conversion shares will amount to 245.4-million and the conversion into equity will occur in two tranches.
Once complete, YBI will hold 428.3-million ordinary shares in CoAL, equating to a 19.28% shareholding.
“The conversion of the loan to equity holds great value to CoAL. It removes a large potential cash outflow from the company's cash flow projections and strengthens the solvency ratio, as it allows CoAL to focus its expenditure on the development of its assets instead of repaying debt,” CoAL CEO David Brown said.
CoAL will be left with only one outstanding settlement due to Rio Tinto by June in relation to CoAL’s acquisition of the Greater Soutpansberg assets, in Limpopo.