Blumont also had to withdraw a proposed $81.7 million funding package designed to fund the equity requirements for Cokal’s BBM coal mine project in Indonesia.
Both parties agreed to halt the takeover plans, but further discussions are taking place to restructure the financing and potential takeover offer, Cokal said in a statement.
“Directors believe that such takeover proposals should be developed and brought to shareholders for them to decide on,” the company said.
“Shareholders should be aware that there is no certainty that any Blumont proposals will be made.”
The movement in the Blumont share price materially and adversely affected the commercial terms of the takeover proposal, Cokal said.
There has been a significant downward movement in Blumont's share price.
In response to an SGX price query, Blumont advised on October 4 that a local broking house had recently declared Blumont's shares as designated securities and that this might be a contributing factor to the volatility in its share price, Cokal said.
To develop the BBM project to reach first production next year, negotiations to restructure the financing package continue and Blumont has made available a loan facility of up to $8.5 million.
The loan is repayable within three years, interest is 5% per annum payable quarterly in arrears, and can be capitalised and repaid at maturity.
The facility is secured by fixed charge over up to 5% of Cokal’s shares in Cokal Holdings Pty Ltd.
If a future placement is made to Blumont and should the subscription agreement require, the placement funds received from Blumont will be used to repay the loan. The loan is otherwise on customary terms and conditions for a loan of this nature, size and type.
The BBM coal project in Central Kalimantan covers an area of 15,000 hectares. The project is adjacent BHP Billiton’s Indomet Coal Joloi Project in Murung Raya Regency.
BBM has a JORC resource of 77 Million tonnes in multiple seams, comprised of 70Mt inferred and 7Mt indicated.
Cokal has also been working on converting the 200-350Mt additional exploration target into JORC resources.
Cokal is completing definitive studies and obtaining the necessary approvals with the aim of starting construction late this year, with first production in the first half of 2014.
