OTTAWA, Jan. 21 /CNW Telbec/ - Shareholders' coalition believes that voting NO to the proposed deal from Pala Investments is the best thing for the company and shareholders. The steps taken by former management, by filing an application to the OSC will help in making sure that the proposed deal is not allowed during the special resolution meeting to be held on February 11th. Minority shareholders' votes will decide the decision. For those of you that will be voting from abroad be sure to contact your brokers to obtain the bid circulars that have to be mailed by January 22nd "the mailing deadline".
As Coalcorp stated:
"The Company's position is that the Proposed Transaction is not a "related party transaction" and, therefore intends to oppose the Application aggressively at the OSC in the interests of all the Company's shareholders".
Why not let minority shareholders decide the vote in the "special resolution meeting" if this is not a related party transaction? This would be acting in the best interest of ALL shareholders.
Although the board of directors believes that former management is acting in counter attack due to their position as defendants in a legal action initiated by Pala, us retail shareholders do not want Pala investments to control Coalcorp's board of directors and interest. The present deal is undervalued compared to other peers operating in the same area as CCJ's mines (LF 1 & II), and should be sold or valued based on the SRK Consulting results as per NI 43-101 with a value of $374 million.
The only reason management wrote down the assets to $150 million is due to the agreement with Goldman Sachs as stated in the audited annual report submitted on Sedar Dec 16th 2009. (p. 22 of document or p.24 of pdf)
"As discussed in note 1, subsequent to year end, the Company entered negotiations with a third party for sale of the Company's primary assets, being La Francia I and La Francia II. The proposed sale amount is substantially less than the carrying value as at June 30, 2009. As a result, the Company wrote down the carrying value of these properties to their estimated fair value of $151.0 million, resulting in an impairment charge of $233.3 million and reduction in the future tax liability of $53.6 million for the year ended June 30, 2009"
Minority shareholders only want to be treated fairly and with honesty by current management of Coalcorp, in terms of getting the best price possible for the assets. Where are the other bidders? What has been done to try and sell the assets at a better price? The management refuses to answer questions, this speaks for itself...
What benefit does Pala Investements have in agreeing to this deal? They have over 150$ million invested in the company through common shares and warrants. This deal will only make them lose money... How are these actions from Coalcorp's current management unlocking shareholder value?
They have stated that their intention is to make CCJ a litigation company. Shareholders have not agreed to this. At this time we ask that Coalcorp management start acting in the best interest of the shareholders and sell the assets at fair market value and stop the agreement with Goldman Sachs.
Minority shareholders continue to vote NO!!!
SOURCE DJ SHARE HOLDERS COALITION
For further information: For further information: Denis Brisson, (613) 218-4812