17th Dec 2015 10:37
LONDON (Alliance News) - Coal of Africa Ltd on Thursday said it has been given the green light by authorities in South Africa to complete its AUD126.0 million reverse takeover of Australia-listed Universal Coal PLC.
The South African Competition Commission has approved the reverse takeover that was agreed back in November, moving Coal of Africa one step closer to formally completing the deal.
Coal of Africa is hoping the deal will provide the company with immediate coal production and cash flow along with a diversified production, development and exploration base. Universal Coal has three thermal coal and two coking coal assets, with its Kangala thermal coal mine in South Africa producing around 2.1 million tonnes of coal per year.
Thermal coal is used for energy generation by being burnt to create steam to power turbines whilst coking coal is used to make steel by being compressed with iron ore.
The introduction of production into Coal of Africa's portfolio is significant as its own projects have been slow moving. The company is still waiting for an interdict to be removed from its Makhado project after objections were made against the company being given environmental authorisation.
The court which is making the ruling on the matter has already been deliberating for over nine months, but is yet to make a final decision. Coal of Africa said it isn't sure when that ruling will be made, but is confident its plan to begin construction in the second half of the year will not be affected.
Coal of Africa shares were trading down 2.9% to 2.55 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Coal of Africa