Full redemption of Mayford loan (4100J)
30 June 2011 - 4:00PM
UK Regulatory
TIDMATC
RNS Number : 4100J
Atlantic Coal PLC
30 June 2011
Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining
30 June 2011
Atlantic Coal plc ("Atlantic" or the "Company")
Full redemption of Mayford loan
Atlantic Coal plc, the AIM listed open cast coal production and
processing company with activities in Pennsylvania, USA, is pleased
to announce that it has today entered into an agreement with
Mayford LLC ("Mayford"), a company incorporated in Pennsylvania, to
discharge in full the General Electric Capital Corporation ("GECC")
loan note, now held by Mayford, (the "Note"), together with all
interest and penalty interest accrued on the Note in consideration
of an immediate cash payment of $2.1 million by the Company to
Mayford (the "Transaction").
On 2 December 2010 the Company announced that it had been
notified on 30 November 2010 that GECC sold the Note to Mayford for
a cash consideration of $1.5 million.
The Note is secured on, amongst other things, all anthracite
coal to be extracted from the Company's Stockton mine, through a
first mortgage on all the real property of Coal Contractors (1991)
Inc., a subsidiary of the Company. The Note is repayable on 15
January 2012, and is subject to an interest charge of 2% above U.S.
prime rates per annum. Since 2009 the repayments due to GECC by the
Company were not made and, as a consequence, the Note attracted a
penalty interest rate of 18%. The payment to Mayford pursuant to
the Transaction will discharge in full all of the Company's
liabilities and obligations due under the Note and, once it has
received payment, Mayford will release its charges over Atlantic
Group's assets.
As at 30 April 2011 the outstanding amount on the Note was
US$2.58 million (including all principal, accrued interest and
accrued penalty interest).
The Directors of Mayford include Mary Best (the spouse of
Atlantic's Managing Director Steve Best) and Adam Wilson, who are
directors of Atlantic Coal. The shares in Mayford are held as
follows:
Steve Best and family 76%
Adam Wilson 24%
As both Steve Best and Adam Wilson are directors of the Company
the Transaction is considered to be a related party transaction
pursuant to Rule 13 of the AIM Rules for Companies. Peter Chinneck,
a non executive director of the Company, has no interest in Mayford
and is, pursuant to the AIM Rules for Companies, therefore
considered to be an independent director of the Company for the
purpose of the Transaction. Peter Chinneck, having consulted with
the Company's nominated adviser, Allenby Capital Limited, considers
that the terms of the Transaction are fair and reasonable insofar
as the Company's shareholders are concerned. In providing advice to
Peter Chinneck, Allenby Capital Limited has taken account of his
commercial judgment.
Atlantic Managing Director, Steve Best, said, "I am very pleased
that the Company has agreed terms with Mayford for cancelling the
former GE loan note. This will remove the security held over all
the anthracite coal to be extracted from the Company's Stockton
mine. In addition the Company has reduced the amount it would be
required to pay to pay off the Note by almost $0.5 million."
Peter Chinneck, the Independent Director, commented, "The
removal of the General Electric Loan note is in the Company's best
interest. Charges will be released against our assets at Stockton
and the amount payable by the Company is less than would be due if
Mayford (or GECC before them) had enforced all their rights
pursuant to the Note. This is a positive benefit for the
Company."
**ENDS**
For further information on the Company, visit:
www.atlanticcoal.com or contact:
Steve Best Atlantic Coal plc Tel: 020 3328 5670
Nick Naylor Allenby Capital Limited Tel: 020 3328 5656
Alex Price Allenby Capital Limited Tel: 020 3328 5656
Daniel Fox Davies Fox Davies Capital Limited Tel: 020 7936 5230
Hugo de Salis St Brides Media & Finance Tel: 020 7236 1177
Ltd
Elisabeth Cowell St Brides Media & Finance Tel: 020 7236 1177
Ltd
Notes
Atlantic Coal plc is an AIM listed coal production and
processing company focussed predominantly on open cast mining and
the processing of anthracite coal in Pennsylvania, USA. The
Company's primary asset is the Stockton Colliery, a producing
surface coal mine and adjacent anthracite preparation plant
encompassing an area of approximately 900 hectares located in Hazel
Creek in North-East Pennsylvania, which has current Proven Reserves
of 4.2 million tons run-of-mine coal.
Atlantic's strategy is to create a significant mid-tier coal
company; both through the expansion of activities at Stockton and
identifying additional sites in Pennsylvania to build its
production and resource profile, primarily by acquiring defined
assets in stable, recognised, high quality coal regions. The Board
has identified opportunities to expand within the region and is
involved in ongoing negotiations regarding adjacent sites, with the
intention of acting as a regional consolidator in the Pennsylvanian
Coal Field. Expansion within the local area has the potential to
minimise upfront deal costs as a result of existing and proven
infrastructure, equipment, facilities and market demand.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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