Continental Coal had a take-up of about 10%, leaving nearly $32 million worth of shares to be placed by the underwriter to the entitlement issue, in accordance to the provisions of its August 28 prospectus.

The company said the offers for its 74% stake in CCL SA included proof of funds and “were also of a quantum which provides for the satisfaction of key debts at both the parent and 74% subsidiary level (namely ABSA and EDF) in accordance with negotiations that have been ongoing since the new board was appointed in February 2014”.

“The offers [if accepted and completed] would leave the company with excess cash reserves at its disposal and the ability to pursue new opportunities that have been presented to it,” Continental Coal said.

The board is finalising legal advice for alternative scenarios. “It is expected that an announcement detailing the outcome of this consideration, together with advice received, will be released to the ASX on or before October 14,” the company said.

Continental Coal has two operating mines – Vlakvarkfontein and Penumbra – in South Africa’s major coal fields, producing about 2 million tonnes per annum of thermal coal for the export and domestic markets. A feasibility study was also completed on a proposed third mine, the De Wittekrans coal project with a mining right granted in September last year.