[miningmx.com] – BEIJING Haohua Energy (BHE) had won regulatory approval for an investment in Johannesburg- and London-listed Coal of Africa (CoAL) which will see it take a 24% stake in the coal firm.
CoAL said in an announcement to the JSE today that approvals for an initial $20m and a further $100m had been received from the Chinese authorities. This was after similar approvals were given by Australian authorities last year. The approvals from the Chinese authorities are valid for two years.
The funds mean that CoAL has completed a major part of its balance sheet rebuild. In the last year, it raised had $259.5m, equal to R2.15bn.
In November, CoAL issued $106m in shares which it followed in July with a $53.5m share issue including some shares to Investec. It also refinanced a $40m loan, replacing it with an Investec facility totalling $50m.
This tackles a fundamental problem in CoAL that CEO John Wallington described in the past as a company that was under-funded given its lofty growth ambitions.
CoAL has a major exploration footprint in the coal fields of the Soutpansberg and Limpopo, recently upgraded to an estimated 8 million tonnes. Wallington has said in the past that the region could yield 10 million tonnes/year (Mtpa).
“I am pleased that the remaining approvals required by HEI (Haohua Energy International, parent company of BHE) to complete the transaction have been received ahead of the shareholder meeting on 25 January,” said David Brown, chairman of CoAL.
“Upon the conclusion of this transaction, CoAL will be well placed to execute its vision for the future development of the company,’ he said.
