EastCoal Inc Court Approval of Proposal (8108H)

TIDMECX

RNS Number : 8108H

EastCoal Inc

22 May 2014

EASTCOAL ANNOUNCES COURT APPROVAL OF PROPOSAL

EastCoal Inc. (NEX: ECX.H, AIM: ECX) ("EastCoal" or the "Company") previously announced on April 23, 2014 that at a meeting of its creditors held on April 22, 2014 it had received creditor approval for the Company's proposal (the "Proposal") to its creditors pursuant to the Bankruptcy and Insolvency Act (Canada) (the "BIA"). The Company is now pleased to announce that on May 20, 2014 the proposal trustee, Deloitte Restructuring Inc. (the "Proposal Trustee") and the Company were granted an order from the Supreme Court of British Columbia approving the Proposal and the associated transactions identified below (the "Transactions").

Assuming the Transactions complete within the expected time frames, the Company anticipates completing the terms the Proposal in June 2014.

In connection with the implementation of the Proposal, the Company will effect a share consolidation of its issued and outstanding common shares. The consolidation is proposed to be on a ratio of ten (10) pre-consolidation common shares to one (1) post-consolidation common shares, consolidating the Company's 72,804,853 issued and outstanding common shares to 7,280,485 common shares following the consolidation.

In connection with the implementation of the Proposal the Company has also entered into conditional share subscription agreements with a group of investors. Such investors will acquire, on a private placement basis, approximately 95% (or 140,000,000 common shares on a post-consolidated basis) of the Company's issued and outstanding share capital at a subscription price of Cdn$0.005 per share for total aggregate proceeds of an amount not less than Cdn$700,000.

A portion of the proceeds from the private placement, being Cdn$450,000, will be used to fund a payment to proven unsecured creditors in accordance with the terms of the Proposal. As agreed with the Company's sole secured creditor, the Company's indebtedness to such creditor will be extended for a year subject to certain loan conversion rights being granted to the creditor.

Inquiries regarding the Proposal and the BIA proceeding should be directed to the Proposal Trustee (Paul Chambers [phone]). A copy of the Proposal is available on the website of the Proposal Trustee at www.deloitte.com/ca/eastcoal.

Forward-Looking Statements: This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws that involve risks and uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. In particular, the statement regarding the expected completion of the Proposal is or involves a forward-looking statement. This statement reflects management's expectations as of the date of this press release regarding the Company's future financial performance and should not be read as guarantees of future performance or results. Factors that could cause actual results to differ materially from expectations include the effects of general economic conditions, actions by government authorities and courts and actions by stock exchanges, stakeholders of the Company or regulatory authorities.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:

EastCoal Inc.

Abraham Jonker, President [phone]

Cenkos Securities plc

Alan Stewart/Derrick Lee [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

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