LONDON (Alliance News) - Continental Coal Ltd Friday said it has received offers from third parties looking to buy its 74% stake in South African subsidiary, Continental Coal Ltd SA.
The South Africa-based thermal coal producer said negotiations have been ongoing since February. It said that the offers, if accepted and completed, would leave the company with excess cash reserves at its disposal and enable it to pursue new opportunities that have arisen.
"Currently the board is finalising legal advice with regards to a scenario whereby an accepted offer is announced and shareholders are then offered the opportunity to have their funds returned from the rights Issue, remain in a new raising by way of a supplementary prospectus or participate in the new raising given the change in circumstances which some shareholders may want to participate in as opposed to the previous rights issue," the company said in a statement.
Last month, Continental Coal said that just 10% of its rights issue was taken up. It said it had only received valid acceptances from shareholders to subscribe for new shares to the value of AUD3.2 million, whereas the total entitlement issue would have seen the company issue seven billion new shares to raise AUD35.2 million.
The company said Friday it expects to detail the outcome of the proposals on or before October 14.
Continental Coal shares were untraded Friday late morning at 1.03 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.