Continental confident of recap
Continental Coal says it remains optimistic of reaching agreement with its financiers and creditors to continue operating as a going concern.
This morning, the company requested an extension of its voluntary suspension while it continued to seek to settle its maturing convertible notes and sought agreement with stakeholders for a complete recapitalisation.
"The company, together with its appointed financial advisor (Deloitte), is continuing to engage with holders of convertible notes, other creditors, royalty holders and various investor groups in relation to a comprehensive recapitalisation of the company and remains optimistic about reaching an agreement between all parties that will allow the company to continue trading as a going concern," Continental said in a statement.
However the company warned the board might be forced to appoint administrators if an acceptable restructure and/or refinancing agreement was not reached in the near term.
The company, which operates thermal coal mines in South Africa, said earlier this month its financial position had been affected by the production impact of the availability of the continuous miners at its new Penumbra operation.
The company's working capital position had consequently been eroded by lower than expected production in recent months.
Continental shares last traded for two cents.
