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SACMH raises R79m in rights issue
Brendan Ryan
Posted: Tue, 12 Aug 2008
[miningmx.com] -- SOUTH African Coal Mine Holdings (SACMH) received only a 79% acceptance for its rights offer to raise R100m but CEO Karl Gribnitz says the balance has already been raised through a share placement.
Gribnitz is a major shareholder in SACHM holding 31% of the stock with partner Royal Bafokeng Capital holding another 35%. Both followed their rights at 400c a share in the rights offer.
SACMH is currently trading at around 330c down from a 12-month high of 500c.
Gribnitz said the shortfall was due mainly to a decision by the New African Mining Fund (Namf) not to follow its rights.
“Namf had indicated to us in advance they would not follow their rights because their fund is closed. We held the rights offer to ensure that no shareholder who wanted to follow it would have his interests diluted before finalising the share placement.”
The
SACHM 2007 annual report put Namf’s stake at 7.5% which means that minorities controlling some 13.5% of the company also opted not to follow their rights.
Gribnitz said SACMH already had already raised “more than R100m” and indicated a further R40m was likely to come from a Hong Kong investor he declined to identify.
The equity funding is part of the R400m that SACMH is raising in total to
fund expansions at its Umlabu Colliery near Ermelo.
The bulk of that money - R222.6m – is to be spent on infrastructure including a new rail siding and coal load-out facility as well as the electrification of the 26km spur railway line from Breyten to join the main Richards Bay railway line at Ermelo.
The new siding and will have the capacity to rail 2.5Mt/year which is several times Umlabu’s current export production of 480,000t/year.
Gribnitz’s strategy is to win benefits in rail tariffs and access to other coal reserves in the area through investing in this infrastructure and making it available to other coal groups in the area.
He told Miningmx in April that, “we are in discussions with Transnet Freight Rail (TFR) regarding a possible rebate on rail tariffs to recover the cost of electrifying the line. We are also in discussions with our neighbours over the benefits of utilising the new siding.”
Gribnitz said today that,
“discussions with our neighbours are on-going and I can say nothing further at this stage. In terms of TFR’s proposed new rail tariff structure we will get a better rate through being able to load trains faster through the new siding.
“The faster turn-around time on the trains should means that TFR will have more rolling stock to allocate and we would hope those extra trains will come to us because of our efficiency. The game is all about logistics.”
Gribnitz said construction had already started on the new siding and work on electrification of the line would begin once the siding had been completed.
SACMH has also invested R43m as its share of the Phase Five expansion of the Richards Bay Coal Terminal (RBCT) in terms of which it will export when the expansion is complete in the middle of next year.
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