| Mon 21 Apr 2008, 11:25 | | CZA - Coal of Africa Limited - Placement and off-t |
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CZA
CZA
CZA - Coal of Africa Limited - Placement and off-take agreement reached with
World`s largest Steel Company
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
Share code on the JSE Limited: CZA
ISIN AU000000CZA6
Share code on the Australian Stock Exchange Limited: CZA
ISIN AU000000CZA6
(`CoAL` or `the Company`)
PLACEMENT AND OFF-TAKE AGREEMENT REACHED WITH WORLD`S LARGEST STEEL COMPANY
(`CoAL` or `the Company`)
Coal of Africa Limited, the AIM/ASX/JSE listed coal development company
operating in South Africa, is pleased to announce that it has reached agreement
with ArcelorMittal (NYSE: MT), the world`s largest and most global steel
company, whereby:
1. ArcelorMittal will subscribe for up to 60 million new ordinary
shares @ GBP1.11 per share ("the Placement"), raising GBP66.7 million
and representing approximately 16 per cent of CoAL`s issued capital
as enlarged by the issue of such shares ("Placement Shares");
2. ArcelorMittal will enter into an off-take agreement with CoAL to
secure a minimum 2.5 million tonnes per annum of coking coal from
CoAL`s 100 per cent owned Baobab and 74 per cent owned Thuli Coal
Projects in the Limpopo Province of South Africa. ArcelorMittal
also has an option to increase its coal off-take to 5 million tonnes
per annum; and
3. ArcelorMittal will have the right to nominate one person to be
appointed as a director of the Company following completion of the
first tranche of the Placement as described below.
The Placement Shares are to be placed pursuant to the authority to issue shares
recently granted by shareholders at a General Meeting held on 8 April 2008 and
will be issued in two tranches. The first tranche will comprise such number of
shares that, when aggregated with ArcelorMittal`s existing shareholding in CoAL,
will result in a holding of 14.9% of the issued capital of the Company ("First
Tranche"). The balance ("Second Tranche"), or such lower number that ensures
ArcelorMittal`s holding in CoAL does not exceed 20% of the enlarged issued
capital, will be issued upon the Australian Foreign Investment Review Board`s
approval being obtained. A copy of the 3B application can be found on the
company`s website.
Further announcements of the completion of the First Tranche and the Second
Tranche will be made in due course.
Terms and conditions of the off-take agreement are subject to final negotiations
and formal documentation, however in principle it has been agreed that the coal
will be delivered to the town of Musina in the Limpopo province, at a Free-on-
Rail ("FOR") price linked to the Free-on-Board ("FOB") price of Kestrel hard
coking coal sold by Rio Tinto and reported by Wood Mackenzie, assuming similar
quality and specification parameters.
ArcelorMittal employs over 310,000 personnel in more than 60 countries and in
2007 announced revenues of USD 105.2 billion, with a crude steel production of
116 million tonnes, representing around 10 per cent of world steel output.
Managing Director of CoAL, Simon Farrell, commenting on the agreement stated,
"This is the most significant event in CoAL`s short history operating within
the coal industry. We are very glad to welcome ArcelorMittal as a significant
shareholder and first customer which reinforces CoAL`s status as an
emerging mid-tier coal producer."
Executive Vice President, Sudhir Maheshwari of ArcelorMittal said "This
investment reinforces ArcelorMittal`s strategy of vertical integration into raw
materials and further strengthening our commitment to South Africa."
Yours sincerely,
SIMON J FARRELL
Managing Director
For more information contact:
Simon Farrell, Managing Director CZA +61 417 985 383 or +61 8 9322 6776
Petronella Gorrie The Event Shop +27 82 827 8815
Jos Simson/ Leesa Peters Conduit PR +44(0) 20 7429 6603
Olly Cairns / Romil Patel Blue Oar Securities Plc
+61 8 6430 1631 +44(0) 20 7448 4400
About CoAL:
Coal of Africa Limited ("CoAL") is primarily focused on the acquisition,
exploration and development of thermal and metallurgical coal projects. The
Company`s key projects, along with its leading metals processing company NiMag
Group (Pty) Ltd are in South Africa. The Company was incorporated in Western
Australia and listed in 1980. Since 2005, the Company has also listed on both
the AIM and JSE markets, allowing further growth in the Company`s coal assets.
About ArcelorMittal
ArcelorMittal is the world`s largest and most global steel company, with 310,000
employees in more than 60 countries. The company brings together the world`s
number one and number two steel companies, Arcelor and Mittal Steel.
ArcelorMittal is the leader in all major global markets, including automotive,
construction, household appliances and packaging, with leading R&D and
technology, as well as sizeable captive supplies of raw materials and
outstanding distribution networks. An industrial presence in 28 European, Asian,
African and American countries exposes the company to all the key steel markets,
from emerging to mature, positions it will be looking to develop in the high-
growth Chinese and Indian markets.
ArcelorMittal key financials for 2007 show revenues of USD 105.2 billion, with a
crude steel production of 116 million tonnes, representing around 10 per cent of
world steel output.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT),
Paris ( MTP), Brussels (MTBL), Luxembourg (MT) and on the Spanish stock
exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
21 April 2008
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 21/04/2008 11:25:03 Produced by the JSE SENS Department.
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