The Waterberg Energy Group (WEG), which includes dual- listed Waterberg Coal Company (WCC) and its controlled entity, Firestone Energy, announced earlier this month that it was in negotiations with Villora, soon to be AME International, to assist in recapitalising WCC’s balance sheet.
The recapitalisation includes the provision of working capital and a potential transaction to acquire the secured convertible note held by Standard Bank South Africa (SBSA) and other WCC noteholders.
WCC notes that, while discussions with AME are progressing, AME is also in discussions with SBSA in respect of the proposed transaction. “We are advised that, if AME is successful in its nego- tiations with SBSA, it would be its intention to convert the debt into ordinary equity in the capital of the company,” says WCC.
AME has also proposed to procure sufficient working capital to advance the WCC’s Waterberg coal project (WCP), in Limpopo, but will also complete the recapi- talisation of WEG’s balance sheet.
“While the company is suppor- tive of the proposed transaction, it cannot provide any certainty on either the completion or the timing of the proposed transaction, as it requires the support of the noteholders,” WCC states.
WCC is in discussions with potential financiers to arrange suitable project financing for the prospective development of the WCP: “The company will keep the market advised of developments when the terms of a financing mandate have been agreed and executed.”