28th Oct 2013 08:52
LONDON (Alliance News) - Strategic Natural Resources PLC Monday said subsidiary Elitheni Coal (Pty) Ltd is in advanced talks with a number of South African miners about providing it with short-term funding through a debt-for-equity swap, and is confident it can successfully conclude a deal by the end of the week.
The unit, in which Strategic Natural Resources owns a 74% stake, is very short of working capital, and may have to slow its mining operations even if does a short-term funding deal while it tries to sort out a longer-term deal, Strategic Natural said in a statement.
"The entry by Elitheni into such a short term debt facility will be enable Elitheni to satisfy its outstanding and valid current creditors," it said. "However, a temporary slowdown of mining operations may be required in any event pending a more permanent capital injection."
It warned that if the short-term funding talks aren't successful, Elitheni will have to consider its options, including slowing its operations.
"The depressed international coal price has been a real barrier to securing strategic funding in a timely manner but I am encouraged by recent market improvements which are helpful," Strategic Natural Chief Executive Gabriel Ruhan said in a statement.
Strategic Natural Resources shares were down 18.9% at 7.51 pence early Monday, one of the biggest declines on the AIM market.
By Steve McGrath; [email protected]; @SteveMcGrath1
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