Canada Coal Inc. said Oct. 18 that Medcolcanna (BVI) Inc. terminated discussions for a proposed merger.
Under a letter of intent signed in July, Canada Coal planned to exit mining after agreeing to a reverse takeover by Medcolcanna.
The companies earlier missed the Sept. 15 deadline to ink a definitive deal as outlined in the letter of intent due to delays on Medcolcanna's part, but the two sides continued to work together to seal an agreement. During the time, Canada Coal prepared a comprehensive draft information circular, which was provided to Medcolcanna on Oct. 10.
However, Medcolcanna's legal counsel on Oct. 11 set out new terms for the definitive agreement, with the deadline for signing set on Oct. 12. The company also did not respond to Canada Coal's concerns regarding its management during due diligence.
The company was later informed by Medcolcanna's plan to terminate any further talks.
Canada Coal is reviewing its options, which may include an action against Medcolcanna for acting in bad faith, and to recover costs incurred by the company for this transaction.