Deal with Investec raises proceeds for Makhado Project, Vele Colliery
By Devika Patel
Knoxville, Tenn., July 18 - Coal of Africa Ltd. said it will raise about $58.7 million through a private placement of shares and a loan. Investec Bank Ltd. is the investor and will invest about $8.7 million in the shares sale and $50 million through the loan.
The investor will buy 19,148,408 shares. Of the shares, 16,850,599 will be sold at 29.21p per share, and the remaining 2,297,809 shares will be sold at A$0.437 per share. The share prices are a 5% discount to the company's closing share prices of 30.75p and A$0.46 on July 17, the company noted in a press release.
Coal of Africa may also require Investec to purchase an additional 61,913,099 shares in tranches over a one-year period at a 5% discount to the closing price on the trading day prior to the subscription notice, subject to certain conditions.
In addition, Investec will provide the company with a $50 million two-year loan facility. The loan is primarily intended to provide the company with the ability to replace its existing short-term $40 million 364-day revolving finance facility with JP Morgan Chase to a longer tenor of two years and on more favorable terms.
Proceeds will be used for pre-mining right development expenditures for the Makhado Project, to ramp-up production at the Vele Colliery and for general working capital.
Coal of Africa said it is also continuing to consider various long-term debt and equity financing options to finance the expected construction and development of the Makhado Project and has involved three international investment banks in this process.
"This debt and equity financing package signals good support for our long-term growth strategy," chief executive John Wallington said in a press release. "The funds will be used for expenditure on key items for the Makhado Project, additional funding for the ramp-up of production at the Vele Colliery and for general working capital purposes.
"Progress continues to be made at Vele with the coking coal test work and the finalization of the phase 1 capital project to enable the achievement of the initial target of 1 million tons per annum. The public participation process with the communities at Makhado has made significant progress since the formation of a community representative forum that is engaging positively with the company," Wallington said.
Coal of Africa is based in Perth, Australia, and is focused on the acquisition, exploration and development of thermal and metallurgical coal projects in South Africa.
| Issuer: | Coal of Africa Ltd.
|
| Issue: | Shares, loan
|
| Amount: | $58.7 million (approximate)
|
| Warrants: | No
|
| Investor: | Investec Bank Ltd.
|
| Settlement date: | July 18
|
| Stock symbol: | London: CZA, Australia: CZA
|
| Stock price: | 30.75p, A$0.46 at close July 17
|
| Market capitalization: | £203.71 million, A$304.65 million
|
|
|
| Shares
|
| Amount: | $8.7 million (approximate)
|
| Shares: | 19,148,408
|
| Price: | 29.21p (for 16,850,599 shares), A$0.437 (for 2,297,809 shares)
|
|
|
| Loan
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| Amount: | $50 million
|
| Maturity: | Two years
|
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