Triple-listed Coal of Africa Limited (CoAL) has satisfied another condition within its proposed takeover bid of Universal Coal.CoAL has received the written consent of Investec Bank, in its capacity as lender, arranger and facility agent for the implementation of the offer.
On 26 November 2015 Coal of Africa revealed that it had offered $91 million to acquire the entire issued and to be issued share capital of the South Africa-focused coal miner Universal Coal which operates the Kangala mine and is working to re-start the former Exxaro-owned mine New Clydesdale Colliery.
CoAL has also received elections for the loan note alternative from Universal shareholders, including Universal CDI Holders representing 186.2 million Universal shares, equating to approximately 36.77% of the total number of Universal shares in issue.
In addition, CoAL is working towards resolving a procedural issue in respect of 20 million Universal shares, equating to 3.95% of the total number of Universal shares in issue, currently being treated invalid. CoAL must, as part of a condition receive valid elections for the Loan Note Alternative by the close of the Offer Period in respect of Universal Shares representing not less than 40% of the total voting rights carried by Universal shares.
Further, the takeover deal remains subject to conditions including the admission to trading on AIM of the consideration shares to be issued in connection with the offer and each of the subscription agreements having become unconditional in all respects.
The deal remains open for acceptance until 15 April 2016.
Universal first became a takeover target when its major shareholder, IchorCoal, made an unsolicited takeover bid for the company by offering A$0.16 a share, valuing Universal Coal’s entire issued ordinary share capital at approximately A$80.9 million - an offer viewed by Universal Coal as “inadequate” and “opportunistic”.
CoAL CEO David Brown believes that the combination of Universal’s producing assets and CoAL’s development portfolio, coupled with the excellent shareholder support ensures that the merger will create a springboard to a "new coal mining force".