Coal of Africa clears loan with equity conversion

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

Coal mine, mining
  • 2.89
  • 0.35%0.01
  • Max: 3.02
  • Min: 2.83
  • Volume: 681
  • MM 200 : n/a
17:18 25/04/17
  • 15,156.65
  • 0.11%17.23
  • Max: 15,237.23
  • Min: 14,948.15
  • Volume: 0
  • MM 200 : n/a
17:20 25/04/17
  • 957.29
  • 0.47%4.48
  • Max: 957.87
  • Min: 953.04
  • Volume: 0
  • MM 200 : n/a
17:30 25/04/17

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

21:46 US close: Stocks end up on earnings, Nasdaq breaches 6,000 for first time

US stocks ended in the black on Tuesday thanks to some well-received corporate news and as investors awaited a big tax reform announcement from President Donald Trump, with the tech-heavy Nasdaq breaching the 6,000 level for the first time.

19:19 Bonds: Euro area yields bounce back on ECB speculation

These were the movements in some of the most widely-followed 10-year sovereign bond yields: US: 2.31% (+4bp)UK:1.09% (+3bp)Germany: 0.38% (+5bp)Spain: 1.68% (+7bp)France: 0.90% (+7bp)Italy: 2.27% (+9bp)Portugal: 3.61% (+5bp)Greece: 6.44% (-1bp)Japan: 0.03% (+0bp)

18:34 FX round-up: Sterling holds up well as attentions turn from Macron to ECB, US tax reforms

Sterling held up relatively well on Tuesday -- up on the dollar but down on the euro -- as the market looks to the European Central Bank's rate decision later in the week, US tax reforms tomorrow and a stack of other economic data due on both sides of the Atlantic.

18:29 Europe close: Stocks consolidate gains even as single currency jumps

European stocks made slight gains as markets consolidated the previous session's sharp rise on the heel of the results of the French presidential election, with the euro continuing to advance of the European Central Bank's next policy meeting.

17:37 US open: Nasdaq hits 6,000 mark for the first time ever

The Nasdaq hit the 6,000 mark for the first time on Tuesday on the back of recent better-than expected corporate earnings and the so called ‘Trump rally’.

17:31 Sector movers: Engineers pace gains

Engineers registered the biggest gains on Tuesday on the back of supportive comments from analysts at two top brokers.

17:20 Wednesday preview: Trump's tax reveal follows GSK, StanChart starter

Wednesday will see a fairly busy day for corporate quarterly results, including GlaxoSmithKline and Standard Chartered, plus is the day when Donald Trump announced he will unveil his 'big tax reform'.

16:35 Commodities: Crude futures tend lower ahead of much-watched API data

Crude-oil futures were tending lower ahead of industry stores data from American Petroleum Institute later on Tuesday.

15:01 FTSE 250 movers: Elementis rallies on trading statement; Vectura hit by downgrade

London's FTSE 250 was up 0.1% to 19,628.75 in afternoon trade, with broker notes providing much of the action.

15:36 Telford Homes to buy Stone Studios in Hackney Wick

AIM-listed residential property developer Telford Homes has exchanged contracts for the purchase of Stone Studios, a residential-led mixed-use development site on Wallis Road, Hackney Wick, E9.