Pan African Resources said all conditions precedent to the disposal of 100% of the shares and loan accounts in Pan African Resources Coal Holdings Proprietary Limited have now been fulfilled.
This follows Uitkomst Colliery Proprietary Ltd having entered into a supply of coal agreement on terms acceptable to Coal of Africa Ltd (CoAL).
As a result, the effective date of the transaction would be 30 June 2017, when CoAL will take ownership, control and management of PAR CoAL and Uitkomst and Pan African would receive its consideration.
The consideration would be settled as follows:
- R125 million in cash on the Effective Date.
- R125 million through the issue of 261,287,625 new ordinary shares in CoAL on the Effective Date.
- R25 million in deferred consideration (the Deferred Consideration). The Deferred Consideration may be paid by CoAL at any time prior to the second anniversary of the Effective Date. The Deferred Consideration will bear interest at the South African prime overdraft rate from the Effective Date. If the Deferred Consideration and any interest accrued thereon is not paid to Pan African by the second anniversary of the Effective Date, Pan African may elect to have the amount due to it settled through the issue of new CoAL ordinary shares at a price per share equal to the 30-day volume weighted average price of a CoAL ordinary share as traded on the exchange operated by the JSE prevailing on the last trading day immediately prior to the date that such election is made.