LONDON (ShareCast) - (ShareCast News) - Pan African Resources announced on Wednesday that it concluded an agreement with Coal of Africa to dispose of all its shares and loan accounts in its wholly-owned subsidiary PAR Coal - the holding company of Uitkomst - to CoAL for a total consideration of ZAR 275m.
The AIM-traded firm said Uitkomst is a high-grade thermal coal producer, situated in the Utrecht coalfields in KwaZulu-Natal, and the transaction would result in Pan African disposing of its entire interest, comprising ordinary shares and claims on loan account, in PAR Coal and Uitkomst.

"For the six months ended 31 December, the operation processed 236,011 tonnes of coal and sold, including bought-in coal, 327,202 tonnes of coal," Pan African said in its statement.

"Uitkomst currently employs approximately 520 employees - including contractors.

"Uitkomst had a net asset value of ZAR 209m and made profits after taxation of ZAR 21.3m for the six months ended 31 December"

The board said the transaction would provide Pan African with an opportunity to crystallise the value created from its acquisition of Uitkomst.

"The transaction allows Pan African's management to focus on the development of the Elikhulu Tailings Retreatment Plant, the group's existing gold operations and its strategic objective of geographically diversifying its operations.

"The immediate cash inflow of R125 million will supplement the Group's existing cash resources for the development of its growth opportunities.

"Further, the ZAR 125m to be settled with CoAL equity is not subject to any trading restrictions."

Pan African said the transaction would result in an attractive profit of ZAR 157m, inclusive of dividends received in an amount of ZAR 30m, on the original investment of ZAR 148m, which represented a total return of 106% over a 12 month period.

"Pan African is pleased to have concluded this transaction with Coal of Africa," said chief executive Cobus Loots.

"The transaction reaffirms Pan African's focus on our gold mining business and, again, demonstrates our ability to conclude value-accretive transactions to the benefit of our shareholders."

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