Wollongong Coal's struggles to make some money

In December last year, the troubled miner gained approval for its mine extension at Russell Vale - something it had been pushing for for more than a decade.

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Now Wollongong Coal is looking to raise more than $52 million in a share offer to allow it to purchase mining machinery to start mining at Russell Vale, and also at its Wongawilli operations.

"Following completion of the offer, the company's proposed business objectives will be to recommence mining operations and ramp up production at Russell Vale Colliery and Wongawilli Colliery," a company prospectus said.

The share offer would see shareholders granted 56 new shares for each single share they hold - with a value of $0.0001 per share.

The prospectus states the start of production at Russell Vale was expected to be between July and September this year.

That target may not be reached because it appears the fundraising effort is not going too well at all.

When the prospectus was released on July 7, it set a closing date of July 28.

However, since then the deadline has been extended four times and is now sitting at August 25 - this Wednesday.

Also the company's own prospectus highlights the real risk that the company may be going under.

It notes Wollongong Coal is bringing in no revenue and is solely relying on a $600 million loan facility from major shareholder Jindal.

"The company's current liabilities exceed its current assets and there is a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern," the prospectus stated.

While the directors stated it was still a going concern due to that $600 million lifeline, if the current share offer fails to raise at least $32 million, that could be curtains for Wollongong Coal.

"In the event that the minimum subscription is not achieved under this offer, there is significant uncertainty as to whether the company can continue as a going concern," the prospectus stated.

If the company does somehow manage to raise the money, it raises the possibility that Jindal's ownership - now at 61 per cent - will expand to swallow up almost all the shares available.

"Assuming Jindal takes up its full entitlement and no other shareholders accept their entitlements, Jindal's voting power in the company could increase to up to 98.89 per cent," the prospectus stated.

"Shareholders' holdings in the company may be significantly diluted if they do not subscribe for their entitlements."

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