Continental Coal reaches landmark Black Economic Empowerment investment agreement

Continental Coal (ASX: CCC) has reached an agreement with a Broad Based Black Economic Empowerment Group (BBBEE) to acquire the existing 26% Black Economic Empowerment equity interest in the company’s South African subsidiary, Continental Coal Limited (CCL).

As part of the agreement, BBBEE will repay ZAR140 million (around US$20 million) and the balance of ZAR75 million to be vendor financed upon deal completion scheduled for August 2011.

Continental has said that the company will re-invest the US$20 million loan repayment into its South African business, and aggressively advance a number of its projects and initiatives.

The agreement, which has received all relevant due diligence and respective board approvals, is subject to execution of relevant formal documentation and receipt of any applicable governmental approvals.
Upon completion of the formal documentation process it is expected that a formal announcement of the BBBEE party will be made.
Documentation and settlement of the agreement is anticipated to be completed by August 2011.

Following completion of the transaction, the BBBEE will have the right to appoint one director to the company’s board and two directors to the board of the company’s South African subsidiary, CCL.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/17484/continental-coal-reaches-landmark-black-economic-empowerment-investment-agreement-17484.html