Continental appoints financial adviser as part of recapitalisation efforts
JOHANNESBURG (miningweekly.com) – Dual-listed Continental Coal has appointed Deloitte, Perth, as an independent financial adviser to conduct a solvency review as part of the coal company’s ongoing recapitalisation efforts.
The recapitalisation the company was hoping to implement would allow it to settle its convertible notes, which would mature between November 2013 and February 2014, as well as its commitments to other creditors.
Deloitte’s assignment would include a review of the company’s overall funding and restructuring strategy, as well as a balance sheet and working capital review.
The firm would present its findings to Continental’s board of directors early next week and advise the board on appropriate steps to be taken given their assessment of the financial position of the company.
Earlier this month, the coal miner noted that its financial position had been negatively affected by the production impact of the availability of continuous miners at its Penumbra operation, in South Africa’s Mpumalanga province.
“While the production will be augmented by the implementation of an additional conventional drill and blast production section, the ramp-up of production from this is expected to take several months, placing additional pressure on the company's working capital requirements,” Continental explained.
The company also warned that, should no acceptable restructuring or refinancing arrangement be agreed in the near term, the appointment of a voluntary administrator to the company in Australia could be necessary, as the coal miner would have insufficient funds to meet the repayment obligations on the convertible notes and other creditors.
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