Continental completes rights issue

CONTINENTAL Coal has completed a $4 million rights issue and reached a new agreement with a consortium headed by Ivory Mint Holdings Corp for the sale of 74% of its South African coal subsidiary for $US75 million ($A91.2 million).

Lou Caruana

The purchase price includes a complete payout and settlement of debt positions by Continental and assignment from Continental of its loan account with its South African subsidiary of about $A100 million.

Ivory Mint Holdings and investors introduced by them subscribed for 400 million shares as part of the transaction. The rights issue saw 800 million ordinary shares being issued at $0.005.

The transaction is conditional on the receipt of all necessary South African ministerial consent, government, regulatory and third party approvals.

“The board is firmly of the view that the transaction would leave the company debt free with excess cash reserves at its disposal and the ability to pursue new opportunities,” Continental executive director Peter Landau said in a statement.