CoAL to raise R619m for growth, debt payments

[] — Coal of Africa Limited (CoAL), the
coal development company operating in South Africa, said on Thursday it would raise
R619m ($81m) through the placement of shares.

It said 50 million ordinary shares, representing about 10.4% of CoAL’s existing
issued ordinary share capital, had been placed to institutional and other investors.

The company intends to use the net proceeds of the placing to fund the Makhado
bulk sample (about $7.5m) and the Makhado definitive feasibility study

It said it would also use the proceeds to fund potential acquisitions contiguous to
CoAL existing assets or existing inorganic growth opportunities, which amount to
about $15m and $20m respectively.

The funds would also be used to repay an existing JP Morgan Chase Bank working
capital facility of $20m and for general working capital.

“CoAL has grown into a multi-site producer with a sizeable resource base, carefully
considered logistics and a high quality and supportive investor base including its
proposed off-take partners,” said CoAL executive deputy chairman Simon Farrell.

“We have a significant platform for production growth and an exciting
development trajectory. Today’s equity placing will ensure that we have the right
capital structure to deliver further material value for all stakeholders across our
portfolio,” Farrell said.

Earlier this week CoAL said it was considering the sale of non-core assets and
equity as part of its plans to raise funds.

Releasing a trading update, the company said it continued to consider a number of
funding options, which include various forms of debt such as additional working
capital facilities, equipment financing leasing, self-funding environmental
rehabilitation guarantees, sale of non-core assets and equity.

“In order to fund the development of the Makhado Project and participation in any
further potential expansions of capacity at the Matola Terminal, the board believes a
combination of the above would be preferable,” Farrell said.