MC Mining advises shareholders to accept Goldway A$65.3m offer

AN independent committee appointed by Sydney- and Johannesburg-listed coal miner MC Mining has recommended shareholders accept a A$0.16 per share takeover offer by Goldway Capital Investment (Goldway).

Goldway, a consortium including MC Mining’s largest shareholders Senosi Group Investment Holdings and Dendocept, has a relevant interest in 83.67% of MC Mining’s issued shares, said BusinessLive in a report on Wednesday.

Taking into account the fact that the offer has now been declared unconditional and control of MC Mining will pass to Goldway and its associates, the board believes shareholders should consider accepting the offer, said BusinessLive citing a statement by MC Mining.

MC Mining’s advice comes amid plans by Goldway to delist the company. The board also cites the limited liquidity in the trading of MC Mining’s shares. There is also no likelihood of an alternative bid or competing proposal on more favourable terms in the near term.

Goldway’s offer will remain open for acceptance until April 22. MC Mining previously consistently urged minority shareholders to reject the proposal, which required at least 82.2% of the shares in issue to go through.

Earlier in March, Vulcan Resources announced a nonbinding proposal to make an off-market cash takeover offer for MC Mining. Vulcan’s proposal was at an indicative price of A$0.17-A$0.20 a share, valuing MC Mining at A$69.34m-A$81.58m (compared with the Goldway offer, which valued the company at about A$65.3m). However, a week later, Vulcan Resources said it was walking away from the deal.

The junior miner relies on the Uitkomst colliery in KwaZulu-Natal for cash generation, but its flagship project is the development of the capital-intensive Makhado project, which would be South Africa’s only producer of hard coking coal.

The Makhado project has been in the pipeline for the past decade, but MC Mining has been battling to secure funding for it.