4th May 2016 09:55
LONDON (Alliance News) - Coal of Africa Ltd on Wednesday said it has reached an agreement on the deferred consideration to be paid by its MbeuYashu Pty Ltd subsidiary for the acquisition of the Chapudi coal assets in South Africa.
Shares in Coal of Africa were up 48% to 3.60 pence in response to the news Wednesday.
In March, Coal of Africa received a notice from Rio Tinto Minerals Development Ltd and Kwezi Mining Pty Ltd alleging the AIM-listed company was in breach of an obligation under the agreements covering the acquisition of the Chapudi assets.
Coal of Africa disputed this, and the parties entered into mediation to come to an agreement on the remaining consideration due on the acquisition, which was originally struck in 2010.
Under the amended agreement, MbeuYashu will increase its minimum monthly payments for the acquisition to USD650,000 from USD100,000, with full and final settlement of the outstanding purchase price and all interest to be achieved by June 15, 2017, in line with previous guidance.
"This was the last of the historic liability issues and this agreement provides certainty of outcome as well as providing CoAL with flexibility," said David Brown, Coal of Africa's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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