5th Aug 2015 07:28
LONDON (Alliance News) - Coal of Africa Ltd shares were trading higher on Wednesday morning after the company said it has secured two tranches of new funding, split between a GBP9.4 million subscription and a USD10 million loan.
The company said it has signed a subscription agreement with Yishun Brightrise Investment PTE Ltd, a Singapore-based investment company which has interests in coal and nickel assets in China and Indonesia.
Under the subscription, Yishun will acquire up to 183.2 million Coal of Africa shares, representing a 9.5% stake in the company, for 5.15 pence per share, raising a total of GBP9.4 million for the company. Coal of Africa shares were up 13% to 4.87 pence on Wednesday morning, one of the best performers in the AIM All-Share.
The proceeds will be used to finance the pre-construction costs of the Makhado coking and thermal coal project in South Africa and it said Yishun has expressed an interest in acquiring a strategic interest in that project. The package the pair are currently discussing includes an equity investment in Makhado, a shareholder loan to back the development of the colliery and the award of the engineering, procurement and construction contract for the project.
In connection to the subscription, Coal of Africa has also signed a loan deal with Yishun for USD10.0 million, conditional on the subscription being approved by shareholders.
"Yishun's investment in Coal of Africa, combined with the USD10.0 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," said David Brown, the company's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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