EastCoal Announces Implementation of Proposal, Board Changes and Proposed Cancellation of Admission to Trading on AIM

Vancouver, BC / ACCESSWIRE / June 23, 2014 / 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 also previously announced 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”). The Company is pleased to announce that the Company’s obligations under the Proposal have been completed and the Transactions were effected as of June 23 2014.

In connection with the implementation of the Proposal, the Company effected a share consolidation (the “Consolidation”) of its issued and outstanding common shares (the “Common Shares”). The Consolidation was on a ratio of ten (10) pre-consolidation Common Shares to one (1) post-consolidation Common Share, consolidating the Company's 72,804,853 Common Shares to 7,280,485 Common Shares following the Consolidation. In addition, adjustments were made to the Company’s 807,500 options and 5,151,600 warrants in accordance with their terms to reflect the Consolidation, such that after the Consolidation there are 80,750 options and 515,160 warrants outstanding. The Company’s name will not be changed in connection with the Consolidation.

In connection with the implementation of the Proposal the Company also entered into conditional share subscription agreements with a group of investors which were subject to the completion of the Proposal. Such investors acquired, on a private placement basis, approximately a 95% (or 148,800,000 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$744,000.

Following the Consolidation and the closing of the subsequent private placement, the Company has 156,080,485 common shares issued and outstanding.

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. The remaining proceeds from the private placement will be used to fund the Company’s ongoing working capital requirements.

The 59,800,000 of the common shares issued in connection with the private placement have been issued to insiders of the Company and will be subject to the resale restrictions contained in the Corporate Finance Manual of the TSX Venture Exchange, which resale restrictions will expire on October 24, 2014.


Board Changes

The Company also announces the resignation of Mr. John Byrne as director, executive chairman and chief executive officer of the Company with immediate effect and the Company thanks him for his support and contribution during his tenure.

The Company further announces the appointments of Mr. Greg Cameron as director and non-executive chairman and the appointment of Hendrik Dietrichsen as director and chief executive officer of the Company with immediate effect.*

Mr. Cameron brings 16 years of deal experience focused on small and mid-capitalisation companies in North America and abroad. He has held senior positions in investment banking at Canaccord Capital (SVP Investment Banking), MGL Securities (founder) and Macquarie Capital Markets Canada formerly Orion Securities (SVP Investment Banking). During his 12 year career in banking, Mr. Cameron has worked on a significant number of equity, debt, merger and acquisitions and restructurings. He is the current President of Colby Capital Limited, a private merchant bank in Toronto, Canada. Mr. Cameron is the former Chairman and a former director of Cub Energy Inc. an oil and gas company focused on developing significant oil and gas reserves in Ukraine, and a board member of Voyageur Oil and Gas Corporation, an oil and gas exploration company with significant assets in Tunisia. Mr. Cameron is a graduate of Saint Mary’s University in Halifax, Nova Scotia, Canada with a bachelor of commerce in finance and accounting and holds numerous financial industry designations.

Mr. Dietrichsen holds law degrees from both the University of Stellenbosch and the University of Pretoria. He has more than 30 years’ experience as a legal practitioner and advising at senior management and board level within private and public listed companies. He has also held various positions at board level including that of Chairman and CEO. Mr. Dietrichsen has been a consultant with the Company since June 2012 and also acted as Eastcoal’s General Counsel and Company Secretary.


Proposed Cancellation of Admission of the Company’s Common Shares from Trading on AIM:

The Company intends to seek shareholder approval for the cancellation of the admission of its common shares from trading on AIM (the “Cancellation”). A circular (“Circular”) will be sent to shareholders shortly together with a combined notice of an Annual General Meeting and Extraordinary General meeting, for the purposes of, inter alia, considering a special resolution to approve the Cancellation. The rationale for proposing the Cancellation, including what action shareholders should take, will be set out in the Circular. It is currently anticipated that Cancellation will be effective from or around August 7, 2014 and that the Company’s shares will remain suspended from trading on AIM until this time.

Inquiries regarding the Proposal and the BIA proceeding should be directed to the Proposal Trustee (Paul Chambers +1 604 640 3368). 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 with respect to the Company’s intention to seek the cancellation of the admission of its common shares from the AIM market of the London Stock Exchange plc, the timing with respect to any circular published for the purpose and such circular’s content, the timing with respect to such cancellation and the continued suspension from trading on AIM, and the results of any shareholder votes with respect to such cancellation. These statements reflect management's expectations as of the date of this press release regarding the Company's future 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
+1 (604) 681-8069

Cenkos Securities plc
Alan Stewart/Derrick Lee
+44 (0) 131 220 6939


*In relation to the appointments of Mr Dietrichsen and Mr Cameron, the Company confirms that there is no further information to be disclosed under paragraph (g) of Schedule 2 of the AIM Rules for Companies save as disclosed below:

Full name: Hendrik Frederick Dietrichsen
Age: 57

Shareholding in the Company:
None
Current Directorships:
- AL&H Consultancy Ltd
- Frog Ventures Ltd

Previous Directorships / Partnerships in the last 5 years:
- Pivetal Ltd
- Giemni Clinical Ltd
- Dr FR Strydom Ltd

Other disclosures: Mr Dietrichsen was previously a director of Best Corporate Ltd, a business which was amalgamated into Pivetal Ltd prior to the sale of the enlarged group. Following the sale process, the company was placed into members voluntary redundancy.

Full name: Gregory McFarlane Cameron
Age: 40

Shareholding in the Company:
10,000,000 Ordinary shares, representing 6.41% of the Company's issued share capital are held on behalf of Mr. Cameron by Colby Capital Limited

Current Directorships:
- Voyager Oil & Gas Inc
- Salida Capital LP

Previous Directorships / Partnerships in the last 5 years:
- Crocodile Gold
- Alder Resources Ltd
- EastCoal, Inc