Sentula raises R670m in Koornfontein Sale
[miningmx.com] - I-Net Bridge : Fri, 12 February 2010
— OPTIMUM Coal Holdings will buy Sentula Mining’s stake in the 3.3 million tonnes/year Koornfontein coal mine for R670m cash, giving Sentula a welcome boost.The sale of the 49.998% stake to the newly formed Optimum will ease Sentula’s debt burden and give it cash to grow its business.”It reinforces our strategy of reducing our gearing, enhancing cash flow, turning around underperforming operations and it will further enable the company to move certain exploration and development coal assets up the value curve,” Sentula CEO Robin Berry said.
Sentula raised R502m in a rights offer in December towards recapitalising the business.This followed a torrid year in which the company’s shares were suspended amid director fraud allegations totalling R240m. The company now had to restructure some R1.6bn in senior debt. A total of R2.7bn in debt will have matured by 2013.Optimum plans to list on the JSE in the first half of this year.Optimum has already agreed a transaction with Siyanda Resources to buy the remainder of Koornfontein in a deal awaiting competition authority approval.
Once both deal are concluded Optimum will own an effective 91% of the mine.Optimum owns opencast and underground mines at Optimum Collieries, which sold 9.3 million tonnes of coal in the year to end-June 2009, of which 45% was exported.It own a 9% interest in Richards Bay Coal Terminal (RBCT), which makes it the largest single BEE shareholder with a 6.86 million tonnes export entitlement, of which 6.5m tons per year are available for its own use.Koornfontein, which has an 18-year life, has a 1.5 million tonnes/year export allocation at RBCT.