Continental closes A$5m bridge funding with larger restructure

Continental Coal Limited, the South African coal production company says it has closed the previously announced A$5 million of limited recourse bridge funding, with the larger recapitalisation plans well advanced.

The funds have been received by the Company’s escrow agent and all conditions met, allowing for the funds to be released so as to meet key payments to current creditors and ensure a 3 month standstill period to recapitalize the Company and restructure its financial arrangements.

Importantly the Company will focus on, and ensure, stability at an operational level with the Company’s current mining operations whilst saving significant costs at the corporate level. As part of the restructure process, Continental will look to strengthen its BEE credentials in South Africa and generate additional synergies with key strategic partners including Eskom, Transnet and RBCT to ensure a significant growth profile moving forward.

The new Board of Continental includes Peter Landau and Dr Paul D’Sylva, who have had considerable capital markets and junior resource sector experience, together with Dr Lars Schernikau who is a coal marketing specialist with many years of coal experience operating in South Africa, Asia and Europe. See below for further details on the board appointments.

Commenting on the closing of the bridge financing and the associated board changes, interim Chairman Dr Paul D’Sylva said, “While it has experienced some balance sheet issues the Company is well positioned to supply the domestic/global coal markets from two operating mines.

“We have received interest from a number of globally recognised energy investors/traders to participate in the Company going forward, which we expect to finalise shortly.  “We have complete faith in the assets and operational management of the Company, but believe a range of strategic and financing opportunities can be advanced so as to stabilise the Company’s balance sheet and focus on significant growth following completion of the proposed rights issue,” Dr D’Sylva added.

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