LONDON (Alliance News) - Coal of Africa Ltd on Friday said the Integrated Water Use Licence covering the Makhado project in South Africa has been suspended by authorities after an appeal was made against the decision to grant the London-listed company the licence.
Coal of Africa said it was anticipating the appeal, which has been made by the Vhembe Mineral Resources Forum and "other parties" to the country's Department of Water and Sanitation.
The appeal automatically triggered the suspension of the licence, and Coal of Africa is now preparing an "urgent presentation" to try to sway the Minster of Water and Sanitation to reinstate the licence whilst the Water Tribunal mulls its final conclusion over the appeal.
In a statement later Friday, Coal of Africa said the deadline by which it must complete its takeover of Universal Coal PLC has been extended to April 29, pushing the already delayed deal.
Coal of Africa is hoping to takeover Universal Coal in a deal worth AUD126.4 million that would be classed as a reverse takeover. The company did not state why it had decided to extend the deadline.
Universal Coal has recommended the offer, and authorities have given the deal the green light, with Coal of Africa on Friday saying it has received sufficient support from Universal Coal shareholders for the deal to proceed.
As of Friday, Coal of Africa had received acceptances for its offer from shareholders of Universal Coal holding a combined stake of 61.93%.
Following the extension, the closing date will be April 29 and the consideration should be paid on May 6, meaning the deal has been pushed back once again following delays earlier this year.
Universal Coal has three thermal coal and two coking coal assets, with its Kangala thermal coal mine in South Africa producing around 2.1 million tonnes of coal per year. The introduction of production into Coal of Africa's portfolio is significant, as its own projects have been slow moving.
Coal of Africa shares were up 13% to 2.20 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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