HomeNewsFirestone Energy requests voluntary suspension extension to recap balance sheet

Firestone Energy requests voluntary suspension extension to recap balance sheet

As announced on 17 September 2015, Firestone Energy and its parent company The Waterberg Coal Company (WCC) entered into a non-binding term sheet with Sibanye Gold whereby Sibanye had agreed terms with Standard Bank of South Africa (SBSA), as facility agent, to acquire WCC’s existing funding facility held by SBSA.

The transaction contemplated with Sibanye was originally expected to be completed by end of November 2015 then revised to the end of February 2016.

Sibanye however submitted a new offer to WCC in February which was materially different from the equity based transaction, as originally contemplated, to one whereby Sibanye proposed to acquire only the assets of the Waterberg coal project.

This offer was withdrawn by Sibanye when WCC was unable to give due consideration within the approximate 24 hours turnaround time stipulated.

New deal in the pipeline

On 10 March the company advised that it and WCC were in negotiations with South African company Villora Limited to assist in re-capitalisation of Firestone Energy’s balance sheet including, inter alia, a potential transaction for the acquisition of the WCC convertible note facility held by SBSA (replacement funding).

The replacement funding represents a significant transaction and the final terms of the proposal will impact both WCC’s and the company’s ability to carry out its future objectives.

Firestone Energy is of the view that re-instatement of trading for its securities at this time is likely to be materially prejudicial to WCC’s and its ability to successfully complete the complex funding transaction contemplated which is critical to the company’s financial viability;

It expects the voluntary suspension to remain in place until the earlier of:

  • the date that it has made an announcement in respect of the proposed replacement funding arrangement; and
  • commencement of trade on Tuesday, 24 May 2016;

It is not aware of any reason why the securities should not be suspended; and is not aware of any other information necessary to inform the market about the suspension.