CoAL, Rio Tinto reach new agreement over disputed deferred payment
JOHANNESBURG (miningweekly.com) – Triple-listed Coal of Africa Limited (CoAL) on Wednesday said it had reached an agreement with Rio Tinto Minerals Development and Rio Tinto’s joint venture partner Kwezi Mining over the deferred consideration payable by CoAL subsidiary MbeuYashu.
Following the receipt – and subsequent dispute by CoAL – in March of a notice by Rio Tinto of a breach of a deferred consideration payable by MbeuYashu for the acquisition of the Limpopo-based Chapudi coal assets, the parties had successfully concluded a mediation process.
“This was the last of the historic liability issues and this agreement provides certainty of outcome as well as providing CoAL with flexibility. I would like to thank all parties for their cooperation in realising a solution,” CEO David Brown said in a statement.
The $75-million deal saw $45-million paid upfront in cash to Rio Tinto and Kwezi, with the $30-million balance deferred until the sale had been completed.
To date, CoAL settled about $11.2-million of the deferred consideration, with the $18.8-million balance to be settled by way of a revised agreement.
“In connection with the foregoing dispute, the parties entered into a mediation process and, as a result, have agreed to settle their dispute by further amending the terms that regulate the payment of the deferred consideration, plus accrued interest and costs, still due and owing to Rio Tinto and Kwezi,” CoAL explained.
The amendments made provision for an increase in the minimum monthly payments from $100 000 to $650 000, while $1-million would be payable on May 15, and $2-million on September 15.
The full and final settlement date for the outstanding purchase price plus all accrued interest remained June 15, 2017.
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