Continental Coal revises terms of South African stake sale
JOHANNESBURG (miningweekly.com) – ASX-listed Continental Coal this week agreed to revised terms from a new buyer of its 74% interest in South African subsidiary Continental Coal Limited South Africa (CCLSA).
A subsidiary of Ivory Mint Holdings has paid a $5-million deposit into escrow for the $75-million buyout, which was expected to receive Section 11 approval in South Africa by the end of January, after which the funds would be released to Continental Coal.
The final due diligence sign-off and execution of formal contracts were expected to be concluded by January 15, with a targeted completion date of February 28.
The deal would leave Continental Coal in a debt-free position as the purchase price would cover the complete payout and settlement of debt to Absa and EDF and the assignment of about A$100-million from Continental Coal’s loan account with CCLSA.
The transaction remained subject to all necessary South African Ministerial consent, as well as government, regulatory and third-party approvals, besides others.
Continental Coal had also concluded its $4-million rights issue, with the supplementary prospectus resulting in 800-million ordinary shares issued at $0.005.
Ivory Mint Holdings – and investors introduced by them – subscribed for 400-million shares as part of the transaction.
Continental Coal owns the Penumbra, Vlakvarkfontein and Ferreira coal mines in South Africa’s Mpumalanga province and was earlier planning to develop De Wittekrans, also in Mpumalanga, as a fourth mine.
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