| Fri 23 Dec 2011, 7:05 | | CZA - Coal of Africa Limited - Management buy out of Nimag Group |
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CZA
CZA
CZA - Coal of Africa Limited - Management buy out of Nimag Group
Coal of Africa Limited
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
JSE Share code: CZA
ASX Share code: CZA
AIM Share code: CZA
ISIN AU000000CZA6
("CoAL" or the "Company")
MANAGEMENT BUY OUT OF NIMAG GROUP
CoAL advises that the Company has today entered into a binding Sale of Shares
Agreement ("SSA") to effect the sale of the NiMag Group of companies, consisting
of Nimag (Pty) Ltd ("NiMag") and Metalloy Resources Investments (Pty) Ltd
(together "the NiMag Group"), by way of a management buyout ("MBO").
As previously advised in the Company`s Registration Document published on 31
October 2011, the NiMag Group asset is considered to be non-core and has been
classified as an asset held for sale.
Pursuant to the SSA, the Executive Management of the NiMag Group will purchase a
100% interest in the NiMag Group by way of an MBO for a total purchase
consideration of ZAR54 million (approximately US$6.6m at current exchange
rates), of which 60% (ZAR32.4m) is being funded by a combination of equity
contributions and bank debt with the remaining 40% (ZAR21.6 million) being
financed by way of an interest bearing vendor financing loan provided by CoAL,
repayable over four years.
The SSA contains undertakings which apply while the vendor financing loan is
outstanding, including the right for CoAL to appoint a director to NiMag, no
payment of dividends and no disposals by the NiMag Group companies without
CoAL`s prior approval. The transaction is not subject to adjudication by the
South African Competition Commission Tribunal as it constitutes a small merger.
Closing of the transaction is subject to certain typical conditions precedent
which are expected to have been satisfied and the completion of the sale by 28
February 2012 or such extended period as the parties may agree in writing, as
well as the receipt of exchange control approval from the South African Reserve
Bank for the vendor financing.
Commenting on the transaction, John Wallington, Chief Executive Officer of CoAL
said:
"We are very pleased to conclude a transaction with members of the NiMag
management team. This is a specialist business that under the current management
team will continue to grow and develop over time."
"Our focus at CoAL is on the development of our coking coal and thermal coal
businesses. Fast tracking Vele into production and concluding the feasibility
study for Makhado are priorities for us. Our management and financial resources
are focussed on that."
Bryanston
23 December 2011
JSE Sponsor
Macquarie First South Capital (Pty) Ltd
For more information contact:
John Wallington, Chief Executive Officer, Coal of Africa, +27 11 575 4363
Wayne Koonin, Financial Director, Coal of Africa, +27 11 575 4363
Shannon Coates, Company Secretary, Coal of Africa, +61 8 93226 776
Sakhile Ndlovu, IR & PR Manager, Coal of Africa, +27 11 575 6858 or +27 83 306
7058
Jos Simson/Emily Fenton, Financial PR, Tavistock, +44 207 920 3150
Charmane Russell, Financial PR S.Africa, Russell & Associates, +27 11 880 3924
or +27 82 372 5816 or James Duncan, +27 82 892 8052
Chris Sim/ Neil Elliot, Nominated Adviser, Evolution Securities, +44 20 7071
4300
Melanie de Nysschen/Annerie Britz/ Yvette Labuschagne, JSE Sponsor, Macquarie,
+27 11 583 2000
www.coalofafrica.com
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and mining company
operating in South Africa. CoAL`s key projects include the Vele Colliery (coking
and thermal coal), the Makhado Project (coking coal) and the Mooiplaats and
Woestalleen Collieries (both thermal coal).
The Mooiplaats Colliery commenced production in 2008 and is currently ramping up
to produce 2 Mtpa. The Woestalleen Colliery, acquired through the acquisition of
NuCoal Mining (Pty) Limited in January 2010, currently processes approximately
2.5Mtpa of saleable coal for domestic and export markets. The Woestalleen
Complex also incorporates three beneficiation plants with a total processing
capacity of 350,000 run of mine feed tonnes per month.
CoAL`s Vele Colliery is expected to start production in the first half of 2012.
During the initial phase, the operation is targeting 2.7 Mtpa ROM production to
produce 1.0Mtpa saleable coking coal. The Makhado Project, CoAL`s flagship
project in the Soutpansberg coalfield, is well into the feasibility stage, with
a Definitive Feasibility Study nearing completion. An application for a New
Order Mining Right for the Makhado Project was submitted in January 2011.
In November 2010, CoAL agreed to acquire the Chapudi coal project and several
other coal exploration properties in the Soutpansberg coal basin in South Africa
from the previous owners, including Rio Tinto. Upon completion, the acquisition
of these projects will significantly extend the scale and scope of certain of
CoAL`s existing projects in the region and will more than double the resource of
the existing Makhado Project.
Date: 23/12/2011 07:05:33 Produced by the JSE SENS Department.
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