In a statement, Canada Coal said that delays on the part of Medcolcanna meant that it became impossible to meet a deadline of 15 September 2018 for a definitive agreement on a proposed business combination to be signed. An original Letter of Intent dated 24 July 2018 had been executed by both parties.
Notwithstanding this, both parties continued to work together on other deliverables including, but not limited to, Canada Coal preparing a comprehensive draft information circular which was provided to Medcolcanna (BVI) on 10 October 2018.
On 11 October 2018, legal counsel for GMP Securities LP (retained by Medcolcanna to assist in completing a planned private placement) contacted Canada Coal’s legal counsel to set out new terms for the definitive agreement, which Canada Coal has said were ‘significantly different’ from the terms set out in the Letter of Intent, and to indicate that the definitive agreement would need to be signed in the morning of 12 October 2018.
Prior to the notification by GMP Securities, Canada Coal said that it had expressed concerns that arose from its due diligence process related to the suitability of management of Medcolcanna. The specific due diligence questions related to these concerns were forwarded to the appropriate parties.
However, as responses to such questions were not received by the deadline of 12 October set by Medcolcanna to sign the definitive agreement, on the same day Medcolcanna informed Canada Coal that it had decided to terminate any further discussions in connection with the planned transaction.
Canada Coal concluded by saying that it is reviewing its options, which may include commencing an action against Medcolcanna for acting in bad faith and to recover costs incurred for this transaction while acting in good faith.
Read the article online at: https://www.worldcoal.com/coal/22102018/canada-coal-and-medcolcanna-terminate-discussions/