Under the terms of the agreement, L&L will provide initial funding to Bowie of up to $3m in loans that will be used to fund its ongoing coal mining operations.
L&L will fund the loan in tranches and the first $1m was funded on 23 November 2010.
The loans will receive interest of 9% per annum and L&L will receive an option to acquire up to 9% equity interest in Bowie at nominal costs, subject to certain conditions.
L&L holds co-senior status with Bowie’s only other secured creditor, GE Energy Financial Services.
The mine currently has long-term, multi-year customer contracts, its largest coming from the Tennessee Valley Authority calling for an average three million tons per year.
L&L is engaged in coal mining, washing, coking and distribution in the Yunnan and Guizhou provinces of China.
