JOHANNESBURG (miningweekly.com) – South Africa-focused thermal coal producer Continental Coal on Friday lodged the prospectus for its proposed pro rata rights issue, to raise about A$35.1-million to recapitalise the company’s balance sheet, with the Australian Securities and Investments Commission and the ASX.
In a letter to shareholders, the company stated that its shareholders would be entitled to acquire nine new shares for every one existing Continental share held as at September 4, at A$0.005 a share.
The new shares would rank equally with all fully paid ordinary shares in the capital of the company already in issue.
Continental noted that the offer was fully underwritten.
The company explained that it had to raise the offer amount as the company was in urgent need of funding to stabilise its financial position and pay its existing creditors, to which it currently owed A$29.29-million.
The proceeds from the rights issue would also be used to meet Continental’s short-term working capital requirements.
The offer was still conditional upon shareholder approval, with shareholders to vote at a general meeting on September 24.
Meanwhile, Continental also on Friday announced that it had issued 36-million fully paid ordinary shares and 36-million unlisted options in the capital of the company in light of financing costs relating to the facilitation fee of its A$5-million limited recourse bridge funding deal with UK-based Empire Equity that had been closed in February.