Coal transaction goes unconditional
Norton Gold Fields Limited (ASX: NGF) announced on 17 December 2010 that it entered into a binding Sale and Purchase Agreement (“SPA”) with Boardwalk Sienna Pty Ltd, a subsidiary of
Boardwalk Resources Pty Ltd (“Boardwalk”), for the sale of EPC 1033, comprising Norton’s Sienna and Electra coal projects, for a total consideration of $30 million.
The conditions precedent, including indicative approval from the Minister for the sale of EPC 1033 and consent from Lehman Brothers Commercial Corporation (Lehmans), have been received, resulting in the SPA now being unconditional. A $500,000 deposit has already been paid and Tranche 1 ($14,500,000) is now payable by Boardwalk Sienna Pty Ltd on 14th March
2010.
Of the $14,500,000 to be received by Norton on 14th March, approximately $13,000,000 will be immediately applied against the Senior Secured Note (Note) held by Lehmans. After the payment to Lehmans, the outstanding debt on the Note will be approximately $85,000,000.
Norton’s Chief Financial Officer, Rob Brainsbury said: “This is another great outcome for the company. Not only has Norton been able to extract significant value from a non-core asset which we believe was not at all reflected in Norton’s share price, but paying down the debt is an efficient use of Norton’s surplus cash.”
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