Tuesday, May 26, 2020

CIC Energy declines to name suitor

CIC Energy, the developers of the ambitious Mmamabula Energy Project, said it is keeping the identity of its suitor in the private for the moment as it opened its arms for the Indian giant to conduct due diligence.

The Botswana Stock Exchange (BSE) quoted company last week allowed the unnamed energy conglomerate to go over its books although a timetable has not been set over a possible deal.

“No, we cannot name the suitor,” Erica Belling, the company spokesperson, said. “A timeframe has not been publicly disclosed.”

The British Virgin Islands based, CIC, which is involved in developing the Mmamabula coal field in Botswana has been a subject of takeover bid since last month.

The unnamed suitor is prepared to take at least 51 percent and up 100 percent of the company at $ 7.75 Canadian dollars per share.

“We cannot comment beyond what was in CIC Energy’s news release,” the company said.

However, India’s Economic Times has speculated that JSW Group could be in the front line to buy the company, which sits on large economic coal deposits in the Central District of Botswana.

The newspaper revealed that the $5-billion JSWgroup has been scouting for coal assets globally to feed its growing steel and power businesses. In May, the group paid about $250 million to buy mines with coking coal ÔÇö used in steelmaking ÔÇö in the US.

Again in April last, JSW Energy, a group company, bought a thermal coal mine in South Africa for about $50 million.

CIC Energy has taken the matter seriously that it has engaged Deutsche Bank as its financial advisor to the Special Committee of the board of directors to, among other things, assist in the assessment and negotiation of this potential transaction.

“This proposal is noteworthy in that the terms do not require the fulfillment of any project milestones,” Warren Newfield, Chairman and CEO of CIC Energy said.

The company said it has granted to the Indian conglomerate “exclusivity to permit the completion of due diligence and the negotiation of a definitive binding acquisition agreement”.

Analysts have supported the deal saying the second offer of 7.75 Canadian dollars per shareÔÇögiving it a premium of 170 percent against the $ 2.87 as at September 14 was reasonable.
The offer to the mining company is around C$450-million or P2.9 billion.

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