JSW Energy to buy majority stake in S. Africa coal mine

JSW Energy will acquire a majority stake in South African Coal Mining Holding (SACMH) for about Rs 382 crore ($85 million) besides making an open offer to the minority shareholders. According to the deal, JSW Energy, through an yet-to-be launched wholly-owned overseas arm, will purchase the SACMH stake from Strider Holdings and RBH Resources at 30 cents a share.

The company will buy 49.8% in Royal Bafokeng Capital from Strider Holdings with an option to acquire the remaining stake. JSW Energy will also acquire Mainsail Trading 55 (Proprietary), an investor in SACMH, from RBH Resources Holdings.

Royal Bafokeng and Mainsail collectively hold about 284.6 million shares. JSW Energy will also make an open offer to the shareholders of Johannesburg Stock Exchange (JSE)-listed SACMH at 30 cents a share.

The Industrial Development Bank of India has provided written confirmation to the Securities Regulation Panel that the necessary resources are available with JSW for acquiring all shares of the minority shareholders of SACMH. The written confirmation from IDBI will be replaced by a bank guarantee from a South African Bank soon.

SACMH has stakes in two coal mines including Ilanga in the Witbank Coal Field, about 200 km east of Johannesburg and Umlabu Colliery in Mpumalanga. The Witbank Coal Field, which has been in operation since 1996, is close to the end of its mine life while Umlabu Colliery, an opencast and close pit mine, has a mine life of another 19 years.