[miningmx.com] – EFFORTS to frustrate a takeover offer for Wescoal Holdings were at root of the current board division which sees company founder, Andre Boje at loggerheads with Robinson Ramaite, the firm’s chairman.
An industry source said that Ramaite laid obstructions in the way of a takeover offer last year which was believed to be from an international company until there was “deal fatigue” and the offer was withdrawn.
Boje, who owns 5% of Wescoal, equal to R18.75m at the current share price, was in favour of considering the offer whilst Ramaite was against it. Wescoal announced it had received the offer on December 10.
Ramaite’s reason for rejecting the offer is that he prefers to build his own stake in the company in terms of a plan sanctioned by the company before December in which Wescoal would lift its black economic empowerment status to 50% plus one share.
This was in order to supply Eskom some 2.4 million tonnes/year from its newly acquired Elandspruit project. The Department of Public Enterprises has said new sources of supply to Eskom must be black-controlled.
In order to achieve this, shares worth R28m in Wescoal Holdings were unbundled to Ramaite in order for him to lift its stake in the coal business in his personal capacity. His direct and indirect stake in Wescoal is estimated to be about 30% worth R112.5m.
Ramaite today bought 123,191 shares in Wescoal Holdings at a cost of R221,743, equal on a per share basis to 1,80.
“The clash was at the board level,” the industry source told Miningmx on condition of anonymity. “it’s not the first time there has been a conflict in the boardroom of a listed company and it won’t be the last,” he said.
Boje declined to comment. “It is simply not in the interests of Wescoal to respond to the speculation about the company,” Boje said responding to an article by BDLive which said on March 24 that Wescoal shareholders representing 40% of issued shares wanted the company to appoint two independent non-executive directors.
“Wescoal has examined letters to this effect and there’s the likelihood that this proposal would be taken forward,” the industry source said.
Wescoal has performed reasonably well relative to other coal stocks gaining 0.5% on a 12-month basis. Shares in the company, which largely supplies the Eskom and domestic coal markets, as well as trading some coal, was up 8% on the JSE today.
