South African Coal Mining Holdings Limited (SAH) on Wednesday announced a R100-million rights offer at R4 a share as part of its broad plan to improve production capacity.
The company said there is commitment from major shareholders holding a combined 65,3% interest to fully follow their rights in relation to the rights offer.
Production is set to increase thanks to two new underground sections.
Total cost is seen at approximately R400-million, with the balance of funding to be from general issue of shares for cash of approximately R50-million and from debt.
“Having established SAH as a profitable black-owned and -controlled coal mining company, we are now making a major investment in the business to increase production substantially and to become much more efficient.
“The Umlabu plant upgrade and new siding will cut out the need for any toll treatment and use of other sidings in the area, meaning significant cost savings. We will be positioned to sell all our export-quality coal through our increased allocation, which we expect to become available in the middle of next year,” said CEO, Karl Gribnitz. — I-Net Bridge