[miningmx.com] – SHARES worth R28m in Wescoal Holdings have been unbundled to its chairman Robinson Ramaite in order for him to lift its stake in the coal business in his personal capacity.
Andre Boje, CEO of Wescoal Holdings, said that shares in the company held by Waterberg Portion Property (WPP), an empowerment grouping in Wescoal’s 34% BEE structure, were unbundled to its shareholders.
If WPP had lifted its stake in Wescoal further, it would have moved the BEE’s total company holding to beyond 34.99%. In terms of company law, this would have triggered a mandatory offer to minority shareholders, Boje said.
Wescoal said in an announcement to the Johannesburg Stock Exchange that the unbundling “… will not have any impact on the current BEE structure of Wescoal”. Some 15.2 million shares in Wescoal were unbundled to Ramaite, equal to 7.7% of the firm.
It is understood that Ramaite will invest in a 50.1%-owned black-controlled special purpose vehicle (SPV) created by Wescoal that would secure the contract supplying coal from its 2.4 million tonnes/year (mtpa) Elandspruit project to Eskom.
This was in terms of Eskom’s requirement that new supplies of coal to it be secured by a contract in which control was with an empowerment company.
“There have been some changes in regulations, but the JSE is generally happy with the structure,” said Boje. Speaking at the presentation of Wescoal’s interim figures on November 4, Boje said Eskom was happy with the arrangement as well.
Roughly half of Elandspruit’s 200,000 tonnes/month production would be sold to Eskom.
“The SPV just secures the Eskom contract,” said Boje.
“For the 50.1% you get a price premium. Eskom and shareholders don’t suffer,” he said. Wescoal also brings into the SPV its 34% BEE at the corporate level.
