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Bounty Mining defaults on A$35M loan

Cash-strapped Bounty Mining Ltd. defaulted on an upsized A$35 million working capital facility provided by major shareholders Amaroo Blackdown Investments PTE Ltd. and Amaroo Blackdown Investments LLC.

Bounty secured the loan, initially worth A$20 million, in December 2018 when it cancelled coal shipments due to various conditions. Proceeds were meant to support the Cook colliery operation in Queensland, Australia.

But under the loan terms, Bounty will be in default if it fails to generate free cash flow starting Feb. 1, a condition the company did not meet. Bounty also said Sept. 27 that it was unable to obtain a default waiver.

As a result, Bounty is now required to repay the facility by Sept. 30, with an extension subject to shareholder approval during a general meeting on the same day.

Meanwhile, Bounty shareholder QCoal Pty. Ltd. reiterated that its A$85 million recapitalization proposal previously rejected by Bounty was superior to that of Amaroo.

QCoal described Amaroo's offer dilutive to shareholders and called it a "takeover by stealth." QCoal also accused Bounty of misleading its shareholders by failing to compare its offer to Amaroo's.