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Summary
- South African competition court has completed its hearing into the sale procedure of South32’s coal unit, South Africa Energy Coal (SAEC) to Seriti Resources Holdings Pty Ltd.
- The deal was done in November when the company said that it would sell 92 per cent of its stake in its coal unit for the consideration of ZAR100 million
- South32, which is listed at Johannesburg, Sydney and London stock exchanges, will get 49 per cent of the cash produced since the end of the transaction till March 2024.
Australia-based mining and metal firm South32 Ltd has said South African competition court has finished its hearing to consider the planned sale of the company’s shareholding in its coal unit South Africa Energy Coal (SAEC) to Seriti Resources Holdings Pty Ltd. The South African regulator is expected to announce its verdict in the next 10 days.
The deal was finalised in November when South32 said it will divest 92 per cent of stake in its coal unit for the consideration of ZAR100 million, which also includes deferred payment, from the cash flow generated by the unit capped at ZAR1.5 billion.
South32, which is listed at Johannesburg, Sydney and London stock exchanges, would get 49 per cent of the cash produced after the end of the transaction till March 2024. The company anticipates the business transaction to get completed during the March quarter.
In a separate development, the Australian mining firm said state-held utility company Eskom Holdings SOC Ltd had presented a new energy supply pact to South Africa’s National Energy Regulator for its Hillside Aluminium smelter. The new accord will cover power provided for ten years with a tax that will be South African rand based.
The National Energy Regulator of South Africa authorisation procedure is likely to be concluded by June 2021.
In November, South32 had signed a binding agreement for the sale of a minerals royalties package to Elemental Royalties Corp. The royalty package consisted of three gold royalties and one associated non-gold royalty of irrelevant value.
It had mentioned that once the transaction is completed, Elemental will pay about $40 million in cash and issue $15 million in elemental shares to South32. Following the completion of the transaction, South32 will hold around 19.7 per cent stake in the company.
