NuCoal Energy Corp.'s shareholders have rejected a plan that would have resulted in a Chinese resource firm taking majority ownership of the Saskatchewan company's coal assets.
The company needed 67 per cent of shareholder votes to pass the proposal, but missed reaching the legal threshold for a major corporate reorganization, according to the company's president and chief executive officer, Jamie McIntyre.
NuCoal had asked its shareholders to vote in favour of the proposal, which would have seen China's Coal-Based Investment Holdings Co. Ltd. (CBI) own 65 per cent of a new company created to develop NuCoal's vast energy assets.
The Saskatoon firm would have held the remaining 35 per cent of the new business, according to the plan pitched to shareholders.
NuCoal has several coal properties in Saskatchewan. The largest is a billion-tonne coal deposit called the South 50 project along the United States border near Estevan.
Despite the failed vote, a memorandum of understanding signed between CBI and NuCoal still stands, the company president said.
Under the agreement, the companies have vowed to work together to create a new corporate entity designed to build, own and operate a proposed coal polygeneration plant in Saskatchewan.
Shareholders were told the plant would have cost more than $620 million to build and would have employed at least 250 people in long-term jobs.
A site for the plant has not been determined, but the company plans to conduct a site options study for the facility in the next few months.
The majority of the capital investment for the polygeneration project would come from Chinese sources, including CBI and its partners.
from Western Investor, November 2010
