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GBP£9.4 million equity investment and US$10 million loan
Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN AU000000CZA6
JSE/ASX/AIM share code: CZA
("CoAL or the "Company" or the "Group")
ANNOUNCEMENT 5 August 2015
GBP£9.4 million equity investment and US$10 million loan
Coal of Africa Limited (“CoAL” or “the Company”) is pleased to announce that it has entered into a
Subscription Agreement and a Loan Agreement with Singapore registered Yishun Brightrise Investment PTE
Limited (“Yishun”). Yishun is a private investment company with a focus on mineral investments and has
interests in coal and nickel in both China and Indonesia and will via this transaction expand its investments
into Africa.
Under the Subscription Agreement, Yishun has agreed to acquire up to 183,231,261 ordinary shares
(approximately 9.5% of the issued share capital of the Company) in the Company (the “Subscription Shares”)
at a price of 5.15 British pence per share, equal to the volume weighted average price of CoAL shares for the
30 days up to 17 July 2015, making an aggregate subscription amount of GBP£9.4 million (approximately
US$14.7 million) which is currently held in escrow. The Subscription Agreement is conditional upon, amongst
others, CoAL shareholder approval. The Company expects to hold an Extraordinary General Meeting (“EGM”)
within 60 days of this announcement at which shareholder approval for the issue of the Subscription Shares
will be sought. A circular convening the EGM will be sent to shareholders in due course.
The subscription proceeds will be used to finance pre-construction costs at the Makhado coking and thermal
coal project (“Makhado Project” or the “Project”) and for general working capital.
Yishun has also expressed an intention to acquire a strategic interest in the Makhado Project and the parties
have agreed to enter into discussions in due course. The package being discussed includes an equity
investment in the Makhado Project, the provision of a shareholder loan on commercial terms providing the
debt required for the development of the colliery and, the award of the Makhado Project engineering,
procurement and construction (“EPC”) contract on commercial terms.
In connection with these matters, CoAL and Yishun have also entered into a Loan Agreement pursuant to
which Yishun has agreed to lend CoAL US$10 million (approximately GBP£6.4 million), conditional upon the
Company’s shareholders approving the issue of the Subscription Shares. The loan will bear no interest and is
only repayable if:
- Yishun has not received the Subscription Shares by the date which is five business days after the 90th
day (or a later date as agreed) after the Subscription Agreement was signed;
- an unrelated third party makes an equity investment in the Makhado Project on or prior to 30 June 2016;
- on or prior to 30 June 2016, CoAL or Baobab Mining & Exploration (Pty) Ltd (“Baobab”), the Company’s
subsidiary that owns the Makhado Project, decides not to proceed with the sale of an equity interest in
Baobab, to Yishun or its associates;
- on or prior to 30 June 2016, Baobab or CoAL is put into administration, liquidation or similar proceedings
are commenced;
on or prior to 30 June 2016, Baobab ceases to be the holder of the New Order Mining Right for the
Makhado Project or the Makhado Project is prohibited from being mined as a result of a permanent
regulatory prohibition; or
- on or prior to 30 June 2016, CoAL or Baobab enters into an agreement to sell to Yishun (or its designate,
acceptable to CoAL) an equity stake in Baobab and, CoAL or Baobab decides to not fulfil the conditions
precedent contained therein requiring:
- the entering into of the Makhado Project EPC contract on commercial terms; and/or
- the entering into of an agreement in terms of which Yishun (or its designate, acceptable to CoAL)
provides a shareholder loan on commercial terms providing the debt required for the development of
the Makhado Project.
Commenting today, Mr David Brown, Chief Executive Officer said: “Yishun’s investment in CoAL,
combined with the US$10 million loan to the Company represents a significant step forward in the process to
identify a strategic partner for our flagship Makhado hard coking and thermal coal project. The Company looks
forward to progressing negotiations with Yishun or its related parties in order to further their potential
investment in the Project. The CoAL board supports Yishun’s investment and shareholders will be updated as
negotiations between the parties progress.
“The Company received the Makhado Project mining right in May 2015 and anticipates that the Integrated
Water Use Licence will be granted in due course. The granting of these rights triggers obligations and the
funds received from Yishun will be used to settle these liabilities, progress the Makhado Project and for
general working capital purposes.”
David Brown
Chief Executive Officer
For more information contact:
David Brown Chief Executive Officer Coal of Africa +27 10 003 8000
De Wet Schutte Chief Financial Officer Coal of Africa +27 10 003 8000
Celeste Harris Investor Relations Coal of Africa +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
Matthew Armitt/Ross Allister Nominated Adviser and Peel Hunt LLP +44 20 7418 8900
Broker
Jos Simson/Emily Fenton Financial PR (United Tavistock +44 20 7920 3150
Kingdom)
Charmane Russell/Jane Kamau Financial PR (South Africa) Russell & Associates +27 11 880 3924 or
+27 82 372 5816
Investec Bank Limited is the nominated JSE Sponsor
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and mining company operating in South Africa. CoAL’s key projects include the Vele
Colliery (coking and thermal coal), the Greater Soutpansberg Project /MbeuYashu, including CoAL’s Makhado Project (coking and thermal coal).
AU: Coal of Africa Limited, Suite 8, 7 The Esplanade, Mount Pleasant, Perth WA 6153, Australia, Tel: +61 8 9316 9100, Fax: +61 8 9316 5475
ZA: South Block, Summercon Office Park, Cnr Rockery Lane and Sunset Avenue, Lonehill, 2191, Tel: +27 10 003 8000 Fax: +27 11 388 8333 Email: adminza@coalofafrica.com
Bernard R. Pryor – Chairman, David H. Brown – Chief Executive Officer , De Wet O. Schutte – Chief Financial Officer Non-executive directors: Peter G. Cordin, Andrew D. Mifflin, Khomotso B. Mosehla ,Thabo F.
Mosololi, Rudolph H. Torlage
Date: 05/08/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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