(MENAFN - ProactiveInvestors - UK) Pan Asia Corporation (ASX: PZC) is to be repaid US4.5 million (A4.2 million) by mid-March under a restructured agreement with Ranrich Investments.
Under the agreement struck with Ranrich in Jakarta yesterday, Pan Asia will also exchange its right to earn a 50% interest in the BCKP project for a royalty of US1 per tonne on all coal sold from the project, up to US15 million.
Pan Asia chief executive officer Alan Hopkins said, "This restructuring of the initial Ranrich arrangements strengthens our near term cash position and allows us to focus on our flagship TCM project which continues to shape up well."
Ranrich Investments, a company controlled by Pan Asia director Honardy Boentario and Pan Asia wholly owned company Innovation West, initially entered into a Memorandum of Agreement in 2010 for the financing of and investment in various coal projects.
The repayment of the finance was based on Ranrich making contracted coal shipments to a designated buyer arranged by Innovation West.
Since entering into the original financing arrangement, Ranrich has struggled to provide the scheduled coal deliveries and must now repay the principal monies outstanding under the contract to Pan Asia.
Also as part of the restructured agreement Boentario will tender his resignation as a director of Pan Asia by Wednesday 7 March, and Ranrich will deliver its current outstanding contracted shipments of 220 billion tonnes of coal to Pan Asia's designated buyer.
Pan Asia being noticed
The company certainly hasn't been flying under the radar lately, with investors starting to re-rate the stock.
Pan Asia received an ASX speeding ticket early last month after shares hit an intra-day high of 0.195 on Wednesday 8 February, up 82% from the closing price on Monday 30 January.
Towards the end of 2011 Pan Asia received a major 115% JORC Resource boost to 114.6 million tonnes at the Transcoal Minergy Coal Project in Indonesia " which importantly has 62% of the resource in the higher confidence categories of Measured and Indicated.
The size of the upgrade was better than expected at the time, and supported the company's belief that the project has potential to be an initial open pit mine and bring project cash flows forward while generating a preferred entry for future underground mining.