26th Nov 2015 08:44
LONDON (Alliance News) - Coal of Africa Ltd on Thursday said it has struck a deal valued at around AUD126.4 million to reverse into Australia-listed Universal Coal PLC.
The company said the deal will provide Coal of Africa with immediate coal production and cash flow along with a diversified production, development and exploration base, along with expected synergies with its existing business.
Under the terms of the offer, Universal Coal shareholders will get AUD0.20 in cash and one new Coal of Africa share for each of their existing shares. The deal values Universal Coal at around AUD126.4 million and represents a 35% premium to Universal Coal's closing price on October 30, the day prior to the talks being entered into.
The deal represents a reverse takeover under AIM rules.
"The combination of Universal's producing assets and CoAL's development portfolio, coupled with the excellent shareholder support ensures that the merger, as a first of its kind in the South African coal industry, will not be the last. We see the enlarged group as a springboard to creating a new coal mining force," said David Brown, Coal of Africa's chief executive.
Shares in Coal of Africa were up 15% to 2.86 pence on Thursday morning, one of the best performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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