Dormant Perth company ZYL entered into voluntary administration today after its creditor Prestige Glory struck a deal with Ascent Capital to buy the collapsed miner’s coal assets in South Africa.
The company also announced today that director John Arbuckle has resigned, with the board appointing Palisade Business Consulting as voluntary administrators.
“Following the appointment of an administrator, Ascent and Prestige will propose a dead of company arrangement which will see the company recapitalised through a 100-for-one share consolidation and subsequent placement of 115 million new shares at 1 cent per new share,” ZYL said in a statement.
Other than the Kangwane South coal project, ZYL’s South African mining assets will be transferred to Prestige in exchange for unpaid debts totalling $2.3 million.
“If required, Ascent will provide interim loans to the administrator and company to complete the recapitalisation,” ZYL said.
The recapitalisation is subject to certain conditions, including ZYL raising a minimum of $1.15 million, the ASX agreeing to re-instate the company’s securities to trading without meeting certain requirements, and receiving shareholder approval.
Perth-based accounting firm Minerva Corporate will co-ordinate the capitalisation.
“Following the recapitalisation, the company’s board expects that the company will focus on its Kangwane South project,” ZYL said.
In September 2012, ZYL entered into a term sheet for an $18 million convertible note facility with Prestige, $2 million of which was drawn down a month later.
The company planned to use the funds to increase its ownership in the Mbila coal project and to finalise a bankable feasibility study at Kangwane.
The funds were contracted to be repaid by the end of 2012, however it was extended until March 2013.
It was extended again in April last year, with Prestige advancing ZYL a further $300,000.
ZYL said despite the best efforts of the board to sustain the company, in difficult equity market conditions and the continuing decline of the global coal market, it was unable to repay its debt.
