Continental Coal Limited, the ASX and AIM listed company has requested a voluntary suspension of its securities effective immediately, as it is still endeavouring to complete a recapitalisation excise that will allow it to settle its Convertible Notes that mature from November 2013 to February 2014 as well as other creditors, referred to in the Company’s request for a trading halt dated 6 January 2014.
In a statement, the company revealed it has been in active discussions with the holders of Convertible Notes, other creditors, royalty holders and various investor groups in relation to a comprehensive recapitalisation of the company.
“Such discussions have been overseen by the previously announced Special Committee of the Board established to review various refinancing and restructure proposals. At this point, no restructure and/or refinancing arrangements have been agreed that are acceptable to all parties. The Directors would like to acknowledge the understanding demonstrated to date by creditors and financiers while the company seeks to complete the recapitalisation,” stated Continental Coal.
According to Continental, its financial position has been affected by the production impact of the previously announced availability of the continuous miners at its new Penumbra operation, which has resulted in lower than expected production in recent months.
“Whilst the production will be augmented by the implementation of an additional conventional drill and blast production section, the ramp up of production from this is expected to take several months placing additional pressure on the company’s working capital requirement.”
“If no acceptable restructure and/or refinancing arrangements can be agreed in the near term, the Board considers that the appointment of a voluntary administrator to the Company in Australia may be necessary, as it will have insufficient funds to meet the repayment obligations on the Convertible Notes and other creditors.”
Details of the voluntary suspension
In accordance with ASX Listing Rule 17.2, the Company advises that it:
a) is seeking the voluntary suspension pending an announcement in relation to a potential refinance
and/or restructure of the Convertible Notes that mature from November 2013 to February 2014, or
otherwise the appointment of voluntary administrators;
b) wishes the voluntary suspension to last until the announcement is released, currently expected on 13
January 2014;
c) is not aware of any reason why the voluntary suspension should not be granted; and
d) is not aware of any other information necessary to inform the market about the suspension.