Cokal signs debt restructuring deal, raises capital

By Ruli Setiawan

ASX-listed coking coal firm Cokal Ltd said Friday it has reached an agreement with Platinum Partners Value Arbitrage Fund, LP (Platinum) to convert approximately US$15 million of loans owed by Cokal to various funds managed by Platinum or its affiliates (the Platinum Group).

The company said in a statement that the loans include the Blumont loan, which has been acquired by the Platinum Group.

In a separate transaction unrelated to the debt restructuring, Cokal said that it has raised A$1.2 million for working capital through a private share placement which will enable it to continue to develop funding opportunities for its Indonesian metallurgical coal projects.

The conversion terms and conditions under the debt restructuring agreement are as follows.
? In consideration for the restructuring of the debt, Platinum will be entitled to a royalty on coal sold from Cokal?s share of production from the Bumi Barito Mineral Project (BBM) and PT Tambang Benua Alam Raya (TBAR) projects.
? The royalty will be 1% of the realized selling price (FOB) (i.e. selling price per ton x tons sold x 1%) up to a maximum royalty amount of US$40 million.
? Cokal or its related parties will have the right to buy out the royalty at any time for the amount of US$40 million less amounts paid on the royalty at that time.
? Cokal will do what is legally possible to attach the royalty directly to the tenement asset (IUP not the IUP holding company) or other legal instrument, so that Platinum is protected against any forced sale.
? The existing security will remain in place to secure the royalty until replaced by a specific royalty security. Platinum and Cokal will work together to replace the existing security with a direct royalty security over the IUP licenses to specifically secure the royalty subject to appropriate legal advice.
? All shares controlled by Platinum will be escrowed for 24 months from the date of conversion unless Cokal finds an alternative buyer or Platinum finds a buyer acceptable to Cokal.
? All Platinum?s existing Cokal options will not be exercised or otherwise will be cancelled.
? Cokal will issue 75 million new options to Platinum with a 5 year term and strike price of US$1.6 (A$0.016)
? The transaction is subject to any necessary regulatory approvals or shareholder approvals required under the ASX Listing Rules.

Editing by Reiner Simanjuntak