TORONTO (miningweekly.com) – Southern Africa-focused coal producer Forbes & Manhattan Coal on Thursday reported that it had closed the rest of its $25-million secured convertible loan facility from Resource Capital Fund (RCF).

The facility consisted of a $4-million bridge loan, advanced to the JSE- and TSX-listed company on February 5, a $15-million convertible loan to be advanced in a number of tranches and a refinancing of the existing $6-million convertible loan facility completed between the company and RCF on September 6, 2013.

The bridge loan was converted into a loan on the same terms as the convertible loan when the convertible loan and the refinancing closed.

RCF would receive a 5% establishment fee of the value of the convertible loan, which would be paid for in Forbes shares priced at C$0.1446 apiece.

The facility would bear interest at a rate of 12% a year, payable monthly. Interest payments would be made through share placements valued at the 20-day volume-weighted average trading price of the common shares on the TSX, before the relevant interest payment date, or may be paid for in cash under certain circumstances. The facility would mature on June 30, 2019.

As a condition of entering into the facility, Forbes Coal also restructured its existing senior debt facilities with Investec Bank. As partial payment for the restructuring, the company issued warrants to buy 34.81-million common shares to Investec, each holding a strike price of C$0.1446 apiece until July 3, 2019.

Any proceeds received from exercising the warrants would be used to repay the loan as a mandatory prepayment. RCF would have the right to buy the warrants from Investec if it chose to.

Forbes, which holds a majority interest in the Magdalena bituminous mine and the Aviemore anthracite mine, in South Africa, said it intended to use the proceeds of the convertible loan mainly for necessary capital investment, as well as to enact strategies for operational improvements.

Further, the company also announced that it had appointed Lorraine Harrison as corporate secretary to replace Neil Said, as part of its plan to transfer its head office to South Africa under its restructuring process.

NAME CHANGE

In a separate filing on the JSE, Forbes said its proposed name change to Buffalo Coal had been delayed.

The coal miner said it was still awaiting approval for the name change from the TSX, having previously expected the name change to be effective by July 7.

It would inform shareholders of the new effective date once it received TSX approval.

Shareholders voted in favour of the name change during Forbes’ annual general meeting on June 27.

“The overwhelming support received from the shareholders at the meeting was gratifying and is also one of the last steps of the significant restructuring process that was started in September and is now essentially complete,” Forbes chairperson Craig Wiggill said at the time.

The coal producer, which had been facing financial difficulties, had first announced plans to change its name in January, when it also decided to close its office in Toronto, Canada.