Coal miner Buffalo Coal Corporation will seek shareholder approval on April 17 to delist the company from the JSE and TSX-V.
The company proposes to complete the going private transaction by consolidating and buying all common shares, other than those held by Belvedere Resources, for a cash consideration of $0.01 for those held on the TSX-V and 0.13c for those held on the JSE.
Belvedere currently owns 90% of the company's outstanding common shares.
The consideration price is equal to the subscription price under Buffalo’s recently completed rights offering, which was greatly undersubscribed.
The consolidation will be effected on the basis of one common share per 60-million pre-consolidation common shares. Following the consolidation, Buffalo will buy, for cancellation, all of the common shares held by shareholders who hold less than one whole post-consolidation common share.
Shareholders holding fractional common shares following the consolidation will be entitled to receive a cash payment for each formerly held common share.
Should the transaction proceed, Belvedere will be the sole shareholder of the company and cease to be a reporting issuer.
Buffalo plans to undertake the transaction using cash it has on hand.
The delisting of shares from the TSX-V and the JSE is expected to occur by April 21 and April 28, respectively.
Buffalo holds a majority interest in two operating coal mines in South Africa.