The company said Tuesday the one-year-term loan provided for $US2.8 million in funding, pending the final confirmation order that would allow Hidden Splendor to emerge from the bankrupt status. The loan agreement outlines a fixed interest rate of 17% annually.
“The proceeds will be largely used to satisfy certain creditor repayment terms and conditions set forth by Hidden Splendor's plan of reorganisation,” said officials, adding that, upon final confirmation, the investors will purchase 10 million shares of America West stock for $US200,000.
“This financing marks another key step forward in America West's efforts to achieve Hidden Splendor's emergence from bankruptcy, at which time we will be free to focus exclusively on accelerating our expansion initiatives and capitalising on the prevailing global demand for our clean coal," said company chief Dan Baker.
America West entered into an agreement with C&P Coal Resources to acquire Columbia, a property totalling 50 million tons of metallurgical reserves, in July of this year. The undeveloped leasehold encompasses 5200 acres near its Horizon complex.
“Securing this sizeable, high-grade resource base materially strengthens our existing coal reserves and provides America West with a very promising growth platform that we intend to fully optimise," said then-president Alexander Walker III at the time.
A three-year development plan outlines underground production on the property by 2011.
The company underwent a name change from Reddi Brake Supply Corporation to America West Resources in March.
