TORONTO, Jan. 20 /CNW/ - Coalcorp Mining Inc. ("Coalcorp" or the "Company") (TSX-CCJ) announces that it has received notice from legal counsel to the former management of Coalcorp, Serafino Iacono, Miguel de la Campa, Jose Francisco Arata, Efrain Carrera, Juan Manuel Pelaez, Peter Volk and Michael Davies (the "Former Management Group"), that the Former Management Group has submitted an application (the "Application") to the Ontario Securities Commission ("OSC") for an order under Section 127 of the Securities Act (Ontario) requiring Coalcorp to obtain "minority approval", as defined in Multilateral Instrument 61-101 - ("MI 61-101"), of the Proposed Transaction (as defined below) at its special meeting of shareholders to be held on February 11, 2010 (the "Special Meeting").
As announced in a January 7, 2010 press release, certain subsidiaries of Coalcorp have entered into agreements to sell the La Francia I mine and related infrastructure assets and all of the issued and outstanding shares of Adromi Capital Corp., the holder of the La Francia II concession, to a subsidiary of the Goldman Sachs Group, Inc. (the "Proposed Transaction").
The Application by the Former Management Group alleges that the Proposed Transaction is a "related party transaction" (as defined in MI 61-101) with the Company's Executive Vice Chairman, Joseph Belan, and its most significant shareholder, Pala Investments Holdings Limited. Accordingly, it is alleged that the votes attached to the securities held by Mr. Belan and Pala should be excluded from voting at the Special Meeting.
Coalcorp disputes the validity of the Application. 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.
Coalcorp believes the Former Management Group's OSC Application and the threat of injunction proceedings to block the Proposed Transaction by Blue Pacific Assets Corp. (a corporation that has been disclosed to be controlled by members of former management) as announced by Coalcorp on January 18, 2010, are actions being taken by members of the Former Management Group as a result of them being defendants in a legal action (the "Statement of Claim") commenced by Coalcorp against certain former directors and officers and other parties, including each of the individuals in the Former Management Group. Coalcorp announced the Statement of Claim on September 29, 2009. The Statement of Claim alleges, among other things, that the defendants participated or allowed Coalcorp to participate in improper transactions that were harmful to the Company and its shareholders.
If the Proposed Transaction is not completed, Coalcorp may be required to seek creditor protection or commence insolvency proceedings. If this occurs, the Statement of Claim may not proceed and the Company will not recover any damages for what it alleges were improper transactions that were harmful to Coalcorp and its shareholders. Conversely, if the Proposed Transaction is completed, the Company intends to use a portion of the proceeds to vigorously pursue the Statement of Claim.
Based on the unanimous recommendation of a Special Committee of independent directors and the unanimous endorsement of the entire Board of Directors, Coalcorp continues to believe that the Proposed Transaction is in the best interest of the Company, its shareholders and other stakeholders. While litigation continues, Coalcorp does not intend to comment further on these matters unless a material development occurs which requires disclosure.
Coalcorp is a coal mining, exploration and development company with interests in the La Francia coal mine and related infrastructure projects and a number of coal exploration properties, all located in Colombia. Coalcorp also holds a 60% equity interest in Carbones Colombianos del Cerrejon which owns the La Caypa coal mine in Colombia. Further information can be obtained by visiting our website at www.coalcorp.ca or under the Company's profile at www.sedar.com.
Forward Looking Statements Disclaimer
Statements made in this news release may be forward-looking and therefore subject to various risks and uncertainties. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Coalcorp does not undertake to update any forward-looking statements; such statements speak only as of the date made.
SOURCE Coalcorp Mining Inc.
For further information: For further information: Juan Carlos Gomez, Interim Chief Executive Officer, +57 - 1 - 658 - 5050 Ext: 9990