Coal Of Africa To Divest Mooiplaats Colliery For $23.47 Mln; Stock Climbs

Shares of Coal of Africa Limited (CZA.AX,CZA.L) climbed around 21 percent in London trading after the firm said it has signed a sale and purchase agreement with a unit of Blackspear Holdings Proprietary Limited, for the disposal of the Mooiplaats Colliery for a gross consideration of ZAR250 million or $23.47 million in cash.

Mooiplaats, the thermal underground colliery in the Ermelo Coalfield in the Mpumalanga province of South Africa, was deemed non-core by CoAL on June 30, 2013 and placed on care and maintenance from October 1, 2013.

The consideration will be settled in two tranches, with the first tranche of ZAR150 million or $14.084 million expected to be received during the first quarter of calendar year 2015. The second tranche of ZAR100 million or $9.39 million is payable on the earlier of 12 months from the payment of the first tranche or 30 November 2015.

The company noted that Blackspear is required to provide CoAL with evidence of funding on or before 31 October 2014.

According to the firm, the sale of Mooiplaats was one of two remaining priorities under its five-point turnaround strategy.

The final outstanding priority is to secure the funding of, and regulatory approvals for the wholly-owned Makhado coking coal project, located in the Soutpansberg coalfield, South Africa.

In London, Coal of Africa shares were gaining 0.62 pence or 21.34 percent, and trading at 3.53 pence.

Meanwhile, in Australia, the shares plunged 24.24 percent at today's trading to settled at A$0.0500.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT