JOHANNESBURG (miningweekly.com) – Hong Kong-based Haohua Energy International (HEI) has been given the go-ahead by Chinese authorities to proceed with its subscription for $100-million of JSE–, ASX– and Aim–listed Coal of Africa Limited’s (CoAL’s) shares.
The deal was HEI’s first investment outside of China and would see the company owning a 23.6% stake in the South African mining house.
CEO John Wallington told Mining Weekly Online that the regulatory approval was awarded ahead of schedule, as CoAL initially expected it to come through about the same time as its extraordinary general meeting (EGM), which would be held on January 25.
The requisite regulatory approvals for the investment were valid for two years and included the Beijing Municipal Commission of Development and Reform’s ‘Approval on the transaction of BHE’s share subscription from CoAL’ and the National Development and Reform Commission’s ‘Major local overseas investments transaction approval and registration’ to the Beijing Municipal Commission of Development and Reform.
Under the subscription agreement, HEI had transferred the initial placement of $20-million to CoAL, which subscribed HEI for new shares in the coal miner at either £0.25 or £0.35 a share.
However, the conditional placement of the balance of $80-million remained subject to shareholder approval.
CoAL stated that the notice of the EGM had been dispatched to shareholders to consider and approve the $100-million investment by HEI.
CoAL earlier reported that it aimed to use a portion of the funds to upgrade the processing plant and complete the production build-up at its Vele colliery, in Limpopo, enabling the project to simultaneously produce semisoft coking coal and thermal middlings coal for the international and domestic markets.
“I am pleased that the remaining approvals required by HEI to complete the transaction have been received ahead of the shareholder meeting. On conclusion of this transaction, CoAL will be well-placed to execute its vision for the future development of the company,” CoAL chairperson David Brown said.
“It’s good news to have approval so we can move forward and bring finality to some aspects, such as the Vele and Makhado projects,” Wallington added.
CoAL’s shares reached a high of R3.10 a piece on the JSE on Wednesday, this later fell to R2.88, up 2.86% from the previous day’s close of R2.80.