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Resources Prima, substantial shareholder agree to extension of time to complete convertible loan pact

INDONESIAN coal miner Resources Prima Group and substantial shareholder Ang Liang Kim have agreed to an extension of time until June 30, 2019 to complete the key terms of a convertible loan agreement. This includes the submission of a trading resumption proposal, holding a general meeting to seek shareholder approval for the convertible loan, and the issuance of shares pursuant to the conversion, rights issue and whitewash waiver.

Mr Ang previously committed not less than S$4 million of investment in Resources Prima through a convertible loan of up to S$2 million and a rights issue. The funds would be used for general working capital and where needed, capital expenditure.

Operations of RPG's subsidiary, PT Energy Indonesia Resources (EIR), were adversely affected in November 2018 as the partner of its coal hauling agreement, PT Coalindo Adhi Nusantara (CAN), was unable to sell its coal inventory.

This continued in December, resulting in coal haulage of 23,031 tonnes for November, and 16,683 tonnes for December, resulting in an average monthly quantity of 31,988 tonnes for the 14-month period from November 2017 to December 2018.

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This is significantly less than the 100,000 tonnes monthly haulage target previously set out by the company.

Its accounts receivable for coal hauled from November to December 2018 amounted to US$76,600.

CAN’s coal hauling activities were temporarily suspended on Jan 1, 2019, and it has now called for the resumption of operations between Feb 13 and 14.

EIR and CAN will further discuss the ramifications of the temporary suspension, and possible recourse actions.

EIR is also seeking professional legal advice on the matter.