Coal of Africa Limited is pleased to announce that it has signed a Sale and Purchase Agreement (SPA) with a wholly owned subsidiary of Blackspear Holdings Proprietary Limited, for the disposal of the Mooiplaats Colliery (Mooiplaats) for a gross consideration of ZAR250 million (US$23.47 million) in cash.
“Following the signing of the SPA for Mooiplaats, CoAL has agreements in place to sell all of its non-core assets identified during the turnaround strategy. On completion of these sales and the proposed equity financing, we will be in a position to unlock the intrinsic value of our coking coal assets in South Africa and create value for all our stakeholders. It has been an extremely challenging environment in which to execute our turnaround strategy. This achievement is testament to the management team, and I look forward to our next chapter of growth,” says David Brown, CoAL of Africa Chief Executive Officer.
Upon fulfilment of all conditions precedent including the receipt of regulatory approvals consistent with a transaction of this nature, the consideration will be settled in two tranches, with the first tranche of ZAR150 million (US$14.084 million) expected to be received during the first quarter of CY2015. The second tranche of ZAR100 million (US$9.39 million) is payable on the earlier of 12 months from the payment of the first tranche or 30 November 2015.
Blackspear is required to provide CoAL with evidence of funding on or before 31 October 2014, with guarantees in form and substance satisfactory to CoAL by 31 December 2014, pursuant to which Blackspear will commence monthly payments from November 2014 of ZAR2.3 million (US$0.21 million) increasing to ZAR4 million (US$0.375 million) from February 2015 until such time that the conditions with respect to the first tranche payment are met.
Mooiplaats, the thermal underground colliery in the Ermelo Coalfield in the Mpumalanga province of South Africa, was deemed non-core by CoAL on 30 June 2013 and placed on care and maintenance from 1 October 2013.
The sale of Mooiplaats was one of two remaining priorities under the Company’s five-point turnaround strategy. The final outstanding priority is to secure the funding of, and regulatory approvals for the wholly-owned Makhado coking coal project, located in the Soutpansberg coalfield, South Africa.