COAL OF AFRICA – US$50M FACILITY SECURED

COAL OF AFRICA – US$50M FACILITY SECURED

Coal of Africa Limited announces it has today, via its wholly owned South African subsidiary Langcarel Limited, secured a revolving thermal coal export finance facility for up to US$50 million with Deutsche Bank AG, Amsterdam.
 
The Facility will be used to provide funds for capital expenditure and general working capital purposes. It will also be used to repay the Company’s existing US$20 million unsecured, revolving loan facility agreement with JP Morgan Chase, details of which were announced on 28 April 2010, which is currently drawn down in full. 
 
CoAL and its subsidiaries NuCoal Mining Limited and Woestalleen Colliery Limited will guarantee the Borrower’s obligations under the Facility Agreement. Additional key terms of the Facility Agreement are set out in Annexure A.
 
The funds available under the Facility, together with the Company’s current cash balance of US$31 million as at 18 March 2011, provide CoAL with sufficient working capital to execute its operational strategy.  Furthermore, the Company is benefitting from improved cash flow as a result of higher thermal coal prices combined with the implementation of recent cost cutting measures.

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