Cash-strapped SA coal developer goes into administration
PERTH (miningweekly.com) – South Africa-focused coal developer ZYL this week went into voluntary administration, as the company failed to secure long-term financing in the declining commodity market.
ZYL was on the hunt for funding to allow the company to review its existing projects and to possibly acquire new projects. However, ZYL said this week that despite the company’s best efforts, it had been unable to raise the necessary funding in the current market conditions.
Meanwhile, Prestige Glory, which holds security over ZYL’s assets, has entered into an agreement with Ascent Capital Holdings, under which the two were proposing a deed of company arrangement that would see the recapitalisation of ZYL through a 100-for-1 share consolidation, and subsequent placement of 11-million new fully paid ordinary shares, at 1c a share, post the appointment of administrators.
ZYL’s South African mining assets, apart from the Kangwane South project, would be transferred to Prestige in satisfaction of the secured debts owed to Prestige.
If required, Ascent would provide interim loans to the administrators and to ZYL to complete the recapitalistion process.
ZYL said that given the agreement between Prestige and Ascent, the company’s board had resolved to appoint an administrator.
Following the recapitalisation process, ZYL’s entire focus would be geared towards the Kangwane South project. The project was currently in the feasibility study phase, and was estimated to host a resource of some 299.7-million tonnes.
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