As a result of ongoing financial difficulties, troubled South African coal producer Buffalo Coal continues to consider restructuring alternatives at its Dundee operations, in KwaZulu-Natal.
Despite a welcomed recent increase in productivity, previous underperformance by Magdalena underground, the company’s largest business unit, the depletion of the Magdalena opencast reserve, which reached the end of its life in March 2015, the continued reduction in export coal prices, as well as ongoing frequent and unpredictable load shedding by Eskom, have impacted the company’s current and forecast financial position.
This has necessitated further restructuring in order to cover operational cash flow shortfalls, thereby ensuring that Buffalo remains sustainable into the future.
In a statement released last week, Buffalo Coal said that in terms of the proposed further restructuring, a consultation process has commenced in South Africa with organised labour and relevant stakeholders, and details on the outcome of this process will be announced at the appropriate time.
TSX listing review
While simultaneously dealing with its ongoing financial difficulties, Buffalo Coal has been dealt another blow. It has been notified by the Toronto Stock Exchange (TSX) that it is being placed under delisting review in respect of its common shares.
The TSX has advised Buffalo Coal that it is reviewing whether the company meets the continued listing requirements of the TSX in the following areas, namely the company’s financial condition and operating results, and the market value of publicly held listed securities of the company.
Buffalo Coal is being reviewed under the Remedial Review Process of the TSX and has been granted an initial period of 120 days to comply with all requirements of the TSX for continued listing. If the company is unable to demonstrate on or before September 18, 2015 that it meets the requirements for continued listing on the TSX, its securities will be delisted 30 days from the date.
Buffalo Coal says it will be working with the TSX throughout the review process to satisfy the continued listing requirements.
The company further said that in the event it is unable to continue with the listing of its securities on the TSX, it will assess other listing alternatives in Canada.