Proactive Investors reported that Coalcorp Mining has entered into agreements to sell its La Francia mine and related infrastructure assets and all of the issued and outstanding shares of Adromi Capital to Goldman Sachs for USD 151 million.
Also a part of the sale, Coalcorp has assigned a coal supply agreement providing for the sale of 2.4 tonnes of coal which has a mark to market value of approximately USD 50 million. The cash consideration for the purchase price and the current estimated value arising from the assignment of the Coal Contract, the approximate total value of the Proposed Transaction is USD 200 million.
Assuming the transaction attains shareholder and Colombian regulatory approval, Coalcorp will use part of the proceeds to repay USD 115 million 12% senior secured notes.
Coalcorp has also entered into USD 5 million credit agreements with Goldman Sachs to fund certain working capital and capital expenditure obligations of Coalcorp until the closing date of the Proposed Transaction.
Also in connection with sale, Coalcorp’s mining contractor, Consorcio Minero del Cesar will agree to reduce the production of waste from 1.7 million BCMs per month to 900,000 BCMs per month. This will result in overall coal production falling from approximately 250,000 tonnes per month to 125,000 tonnes of coal per month until December, 2010. Production will then resume at 1.7 million BCMs per month and 250,000 tonnes per month from January 1st 2011.
As part of the agreement with CMC, Coalcorp has agreed to pay certain standby costs, which will be reimbursed of approximately USD 8.5 million to CMC and has agreed to make a contribution of USD 1 million for CMC to implement voluntary retirement packages for 120 employees.
Mr Richard Lister chairman of the Board and chairman of the special committee said that "We believe that among the different proposals and options available to the Corporation and based on the Corporation's current financial position, the Proposed Transaction offers the best alternative, at this time, for maximising the value of the Corporation's assets upon terms and conditions acceptable to the Corporation."
(Sourced from Proactive Investors)
