Mining Company: South32 to expend $250m to finish off South African Energy Coal Enterprise Trade Bargain
By Abdul Rahman Bangura–
NEW AFRICA DAILY NEWS (NADN) Freetown, Sierra Leone- Mining firm South32 has conceded to disburse $250m in cash to mining group Seriti Resources in order to finalize the sale of South African Energy Coal (SAEC) enterprise.
Mining firm South32 has agreed to pay $250m in cash to mining group Seriti Resources to complete the sale of South African Energy Coal (SAEC) business. In order to enhance favor the sustainability of the SAEC corporation under Seriti holding, South32 will render a payment of $200m to Seriti for the improvement of coal assets, with the first instalment scheduled to be made in July 2020.
Besides, South32 ratified a $50 million facility with Seriti to principally finance the expenses of restructuring specific loss-making mining areas. Seriti is also scheduling to approve a five-year working capital facility with a South African commercial bank to rise $120 million to grant modifications to the South Africa Energy Coal undertakings.
South32 CEO Graham Kerr said: “Securing the long-term sustainability of South Africa Energy Coal has been our keraisejective in transitioning the business to black ownership, consistent with South Africa’s transformation imperative.
“This additional support package moves us closer to completion of the sale and will enable the business to continue to operate safely and sustainably into the future for the benefit of its employees, customers and local communities.
“For South32, the transaction will significantly simplify our business, substantially reduces our capital intensity, improves the Group’s underlying operating margin and supports our strategy to re-shape our portfolio with a bias to base metals.”
However, this stir signing of deal in November 2019 by South32 to peddle its SAEC industry to Seriti by giving ZAR100m ($6.7m) upfront payment.
Based on the mines’ future cash flows until March 2024, South32 was to receive deferred payments from Seriti.
For New Africa Daily News Abdul Rahman Bangura Reports, Africa Correspondent