LONDON (Alliance News) - Strategic Natural Resources PLC shares tumbled Thursday after it said it had received notice from London Commodity Brokers asking for the company to be wound up and was informed that its subsidiary Elitheni Coal Ltd, had received a court order.
The natural resources developer operating in South Africa said lawyers representing London Commodity Brokers filed a winding up petition on Wednesday, claiming an amount of USD1.15 million regarding contractual arrangements with Strategic Natural Resources.
Strategic Natural Resources shares were down 56.0% to 2.86 pence, making it the top AIM faller Thursday.
Strategic Natural said the contractual arrangements are alleged to have been put in place in the Trasteel off-take agreement announced in April 2011. The company said it disputes the claims and has been in discussions with the London Commodity Brokers concerning the amount due and settlement terms.
Strategic Natural said it is disappointed that a winding up petition has been filed but remains optimistic that a settlement can be reached.
It added that in the event that it is unable to successfully contest the winding up petition or reach an agreement with the London Commodity Brokers then it will have to take steps to protect the interests of its creditors.
The company said the winding up petition is due to be heard at the companies Court on May 12.
In April 2011, Strategic Natural Resources signed an exclusive coal off-take agreement with Trasteel International SA, a steel supplier and commodity trader, for all the beneficiated coal to be mined from Strategic Natural's Elitheni coal mine in the Eastern Cape of South Africa up to an initial 2.0 million tonnes.
At that time, Strategic Natural had said the finalisation of the contract was the result of "many discussions with various parties introduced to SNR by their appointed coal brokers, London Commodity Brokers".
In a separate statement, the company said its subsidiary Elitheni Wednesday received notice of a court order made on Tuesday by the High Court of South Africa.
The company said that while it is urgently seeking legal advice in order to clarify the position, it believes that the order effectively freezes the company's entire interest in Elitheni and confirms the jurisdiction of the Republic of South Africa to any further claims by the applicant Thelo Rolling Stock Leasing Ltd against Strategic Natural Resources or Elitheni.
Earlier in March, the company said it was receiving pressure from Elitheni to complete certain recapitalisation plans for the company after Thelo Rolling Stock Leasing Ltd commenced legal proceedings to repossess containers that Elitheni currently rents from Thelo, due to failure to make payments.
Strategic Natural said at the time that it is currently evaluating a revised financing proposal involving a potential strategic investor, and it is seeking proper evidence of funding from the investor which should allow certain funds to be released over the course of this month.
The company said that Elitheni is currently discussing the court order with its legal advisers in order to clarify the consequences of the court order and is in discussions with Thelo regarding the necessary repayments.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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