Coal of Africa disposes of Mooiplaats colliery

Coal of Africa Limited has entered into an agreement with a wholly owned subsidiary of Blackspear Holdings (Pty) Ltd for the disposal of the Mooiplaats colliery located in South Africa.

The company is disposing of the colliery for a gross consideration of R250 million, which is to be paid in two tranches. The two tranches become payable upon fulfilment of all conditions precedent. The first tranche of R150 million is expected to be received during the first quarter of FY15 and the second tranche is payable on the earlier of 12 months from the payment of the first tranche or 30 November 2015.

Evidence of funding is required from Blackspear on or before 31 October 2014. Pursuant to this, Blackspear will make monthly payments of R2.3 million from November 2014 until February 2015 after which the monthly payments will increase to R4 million and continue to be payable until such time as the conditions surrounding the first tranche payment are met.

David Brown, Chief Executive Officer of Coal of Africa, commented, “Following the signing of the SPA for Mooiplaats, CoAL has agreements in place to sell all of its non-core assets identified during the turnaround strategy. On completion of these sales and the proposed equity financing, we will be in a position to unlock the intrinsic value of our coking coal assets in South Africa and create value for all our stakeholders. It has been an extremely challenging environment in which to execute our turnaround strategy. This achievement is testament to the management team, and I look forward to our next chapter of growth.”

Coal of Africa is a coal exploration and development company with operations in South Africa.