East Energy Resources in fight with financier over $5 million loan
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The future of coal play East Energy Resources is in limbo as it seeks to resolve a dispute with financier Noble Group.
The dispute is over a $5 million loan dating back to May 2013 which was provided by Noble to East Energy as part of the company’s acquisition of Idalia Coal.
Idalia, a wholly-owned subsidiary of East Energy, has since issued two draw-down notices under the loan agreement. However, Noble has failed to hand over the money requested in the first notice and has disputed the second notice.
Perth-based East Energy Resources (ASX: EER) has suspended its shares from trade as it seeks to resolves the dispute.
“These circumstances create uncertainty and while the company seeks resolution the company believes it is appropriate for its securities to be placed in voluntary suspension,” East Energy said.
“A failure to resolve this issue is critical to the company’s continued solvency.”
East Energy expects the suspension to last until either commencement of trading on 31 October or release of an announcement to the market.
East Energy is a coal exploration and development company primarily focused in the Eromanga Basin in Queensland.
The company’s shares were trading at 1c prior to suspension.