HMS Bergbau AG is planning sale of up to 15 percent of Silesian Coal International Group of Companies S.A.
Berlin, 17 May 2018: The Management Board of HMS Bergbau AG, one of the leading independent raw materials marketing and trading companies in Germany and a major shareholder of Silesian Coal International Group of Companies S.A. (“Silesian”), is planning to sell up to 15 percent of Silesian Coal International Group of Companies S.A. to Carbo Funding AG. The purchase price is expected to be EUR 10 per share. HMS Bergbau AG intends to use the proceeds from the sale of the stake to finance the preparations for coal mining in Orzesze, Poland, and strengthen the company’s international trading activities.
Carbo Funding AG is a special purpose financing entity that directly and indirectly invests in promising coal development projects. The company is in the process of preparing to place a listed short-term senior secured bond (2018-2019/21) in an amount of up to EUR 30 million (ISIN: DE000A2G8WX5, WKN: A2G8WX, ticker symbol: CFY1) to finance its activities. The sale of up to 15 percent of Silesian to Carbo Funding AG is subject to the success of Carbo Funding AG’s bond transaction. In the course of the transaction, mutual, differently structured tender rights of the shares were agreed between the contractual parties.
The drilling in Orzesze, carried out by HMS and based on an exclusive exploration license, indicate potential coal reserves of 2.2 billion tonnes in-situ, of which approximately 672 million tonnes were identified as high-grade, recoverable coal according to the JORC standard. Silesian plans to develop the reserves using the existing infrastructure and to build production to roughly 3 million tonnes of coal annually at low cost (approx. 1/3 of the cost of a greenfield project) and at in a short period of time (within two and a half years of receiving the mining licence). The planned production is split equally between high-margin coking coal and thermal coal. HMS expects to receive the mining license for the 20 km² lot in the historic Katowice (Poland) coal mining region as early as this year.
The Management Board