Coal of Africa clears loan with equity conversion

Josh White Sharecast | 17 Feb, 2017 16:46 - Updated: 16:46 | | |

Coal mine, mining
  • 2.76
  • -15.21%-0.49
  • Max: 3.03
  • Min: 2.76
  • Volume: 507,290
  • MM 200 : n/a
16:00 23/03/17
  • 15,887.18
  • -1.61%-260.75
  • Max: 16,265.51
  • Min: 15,869.93
  • Volume: 0
  • MM 200 : n/a
16:20 23/03/17
  • 916.93
  • 0.33%3.04
  • Max: 917.26
  • Min: 914.16
  • Volume: 0
  • MM 200 : n/a
16:20 23/03/17

Coal of Africa announced on Friday that it received notice from Yishun Brightrise Investment requesting the conversion of a $10m loan to CoAL's ordinary share capital.

The AIM-traded firm had entered into a loan agreement with YBI during September 2015, pursuant to which YBI advanced an amount of $10m to the company, with the loan bearing no interest and only becoming repayable in limited circumstances.

During May 2016 Coal of Africa and YBI amended the terms of the loan to specify the conditions that would trigger the repayment of the loan.

“The long stop date for the conditions was agreed as 31 December 2016 and if none of these trigger events occurred prior to the long stop date then the loan would become convertible to equity,” the board explained in a statement.

“None of the trigger events have been effected and the company will now convert the loan to equity at the agreed price of $0.04081 per share.”

The total amount of Conversion Shares was confirmed to amount to 245,037,980, and the conversion into equity would occur in two tranches.

Coal of Africa’s directors have 240,042,603 shares remaining under the general placement authority according the ASX listing rules, and would be issued with immediate effect.

The second tranche of 4,995,378 shares would be converted into equity once the general placement authority had been replenished by shareholders at the annual general meeting.

After the issue of both tranches, YBI will have a shareholding of 428,269,241 ordinary shares equating to 19.28% shareholding of the company.

“The conversion of the loan to equity holds great value to CoAL,” said chief executive David Brown.

“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.

“This leaves the company with only one outstanding settlement to Rio Tinto by June 2017.”

Brown said the outstanding balance to Rio Tinto related to the acquisition of the Greater Soutpansberg Assets in the Limpopo province and formed part of the company's long term development strategy.

“The conversion of the loan once again shows the strong support of CoAL's shareholders to the long term value of its assets and its commitment to their development.”

More news

16:56 China Africa Resources formal name change delayed

Shares fell in China Africa Resources on Thursday as the miner said there was a delay to its formal name change to Pembridge Resources.

16:41 Friday preview: Euro and US PMIs, Smiths Group results

Survey data on European and US services and manufacturing industries should give a good macroeconomic steer, while for UK corporate watchers Smiths Group is the biggest name reporting.

16:20 FTSE 100 movers: Next cuts a dash in dull market

Clothes retailer Next led the FTSE 100 risers despite reporting underlying pre-tax profits fell 3.8% to £790.2m last year and warned 2017 will be "another tough year" due to a shift away from spending on clothing and a squeeze on UK wages.

15:11 Facebook begins to roll out fake news alert tool

Facebook began its push against the tide of fake news in earnest on Thursday, as the social media giant rolled out a third-party developed fact checking tool which would alert a user if shared content was ‘disputed’.

14:55 Eddie Stobart Logistics plans AIM float to accelerate growth

Eddie Stobart Logistics has confirmed it plans to float on London's junior market next month to raise £130m to accelerate organic growth and make acquisitions.

13:52 Broker tips: Tullow Oil, Sainsbury's, Tesco, Standard Chartered

Analysts at RBC Capital Markets downgraded Tullow Oil on concerns about the oil and gas explorer's bid to shrink its debt burden through a rights issue.

13:47 Craneware wins sizeable contract extension from US hospital operator

Craneware which is specialises in software for healthcare billing, has won a “significant” contract extension from a US hospital operator.

13:27 Retail sales remain below seasonal trends, CBI finds

Retail sales picked up more than expected up until mid-March, the CBI found in a monthly Distributive Trades survey that backed up earlier official figures but did not fill economic experts with much optimism.

13:11 London midday: Stocks flat but pound pops higher after retail sales

Equity markets in London were little changed by midday, but sterling popped higher following the release of better-than-expected retail sales figures.

12:43 Franchise Brands to buy drains specialist Metro Rod

Franchise Brands has struck a deal to buy drain clearance and maintenance service provider Metro Rod for £28m, which will be partly funded from a £20m discounted equity placing.