Coal of Africa Limited (“CoAL” or “Company”), the AIM/ASX/JSE listed coal development company operating in South Africa (ticker: CZA), had announced that after several months of negotiations, agreement has been reached with Coal Investments Limited (“CIL”) whereby CIL will subscribe for shares and options which if exercised, will result in African Global Capital I, L.P. (“AGC”), CIL and their affiliates holding in excess of 26% of the Company.
AGC is the first fund managed by the recently-formed private equity initiative involving Mvelaphanda Holdings (Proprietary) Limited (“Mvela ”), OZ Management LP (“OZ Management”), an operating entity of Och-Ziff Capital Management Group LLC (NYSE: OZM) (“Och-Ziff”), and Palladino Holdings Ltd. CIL is owned by affiliated investment funds of Och-Ziff.
AGC currently owns 33,810,512 shares in CoAL. Such shares represent, pre-issuance of the Placement Shares (as defined below), approximately 9.1% of CoAL’s issued share capital. Postissuance of the Placement Shares, CIL, AGC and their affiliates will collectively own approximately 17.4% of CoAL’s issued share capital and together with the options (assuming the Option Issuance (as defined below) is approved by the shareholders of CoAL and exercised) will collectively own approximately 26.4% of CoAL’s issued share capital. CIL, AGC and their affiliates intend on transferring their shares and options into a black empowered entity to ensure that CoAL is fully compliant with BEE requirements.
“The Company’s BEE status is absolutely critical to the future of CoAL and the Company is therefore pleased to have reached this agreement. The quality of our BEE partner cannot be understated and we believe that Mvela, AGC and Och-Ziff will add significant value to CoAL.” said Simon Farrell, Managing Director of CoAL.
“This is an important transaction for Mvela and AGC, as it strengthens our relationship with CoAL which we see as a strategic investment. As we have done in previous Mvela BEE transactions, we will bring together a broad based group of beneficiaries to ensure that the historically disadvantaged community benefits from exposure to the mining sector in South Africa.” said Mark Willcox, Chief Executive Officer of Mvela and recently-appointed Chief Executive Officer of Africa Management (UK) Limited, a subsidiary of Africa Management Limited.
The Agreement consists of CoAL issuing 37,500,000 new ordinary shares in CoAL (“Placement Shares”) at an issue price of £1.30 per Placement Share, to CIL, raising up to £48.75 million. The Placement will represent approximately 9.1% of CoAL’s issued capital as expanded by the issue of the Placement Shares, and the Placement Shares will be issued out of the Company’s existing authorities.
