Wollongong Coal to raise another A$30m
PERTH (miningweekly.com) – ASX-listed coal miner Wollongong Coal, formerly known as Gujarat NRE Coking Coal, on Friday announced a A$30.3-million capital raising through an accelerated pro-rata entitlement offer.
The company would offer shareholders one fully paid share for every seven shares held, at an issue price of 6c a share. Wollongong was expecting to issue some 505-million shares under the entitlement offer.
The entitlement offer formed part of previously announced plans to raise up to A$108-million through accelerated rights issues, in an effort to stop the coal company’s financial hemorrhaging.
Since November, Wollongong has raised A$113.8-million from its largest shareholder, the Jindal Group, in three separate rights issues. Jindal increased its shareholding in Wollongong to 71.8%.
Funds raised from the rights issues were geared towards addressing operational issues, and to stem the flow of losses.
In January, Wollongong reduced its Australian workforce by around 20%, following a business review, and in May made further waves when it asked workers to go without pay until the New South Wales government approves a stop-gap mining solution for its Russell Vale operation.
The company was hoping to start mining its longwall 6 before final government approval was granted an extension project at Russell Vale, which would extend the mine life by five years and increase coal production to 4.7-million tonnes a year.
Meanwhile, Wollongong’s namesake mine experienced a roof collapse in February, which resulted in minimal longwall production during the months of March and April.
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