CIC Energy Corp, the developers of the Mmamabula coal fields, said it has opened-up to its┬áIndian suitor following a mouth-watering┬ápremium that sparked the two to go into┬áa tight-lipped negotiation process┬áaimed at the possible purchase of the company.┬á
The Indian suitors have since indicated that they are desirous┬áabout acquiring all listed and unlisted shares of the┬ácompany in a bid to have full control of┬áMmamabula project.
The Indian conglomerate┬áindicated that they┬áare prepared to take┬áat least 51 percent┬áand up 100 percent of the┬ácompany at $ 7.75 Canadian dollars per shareÔÇögiving it a premium of 170 percent┬áagainst the┬á$┬á2.87 as at September 14,┬ájust┬áa day before the news of possible take-over broke out.
“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 on Friday.
“CIC Energy’s Special Committee will be reviewing the merits of this proposal,” he added.
CIC Energy also announced 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.
CIC Energy has granted to the┬áIndian conglomerate┬á“exclusivity to permit the completion of due diligence and the negotiation of a definitive binding acquisition agreement”.
India is very hungry for coal to fire up its development and the conglomerate might be looking at Botswana coal as another source.
Botswana has unmined coal resources of┬áaround 2 billion metric tones which, if mined at the┬ácurrent rate,┬áshould have a life-span of┬á15,000 years.
The company has 52.6 million common shares outstanding and 70 million┬ácommon shares┬áfully diluted ÔÇô including┬ávesting of options and warrants.
┬áIt has appointed a three men committee of independent directors to evaluate the bid.
Based in the British Virgin Islands, CIC is involved in developing the Mmamabula coal field in Botswana and has interests in power generation. Further, the developments include export coal project and a potential for coal-to- hydrocarbons project.
┬áThe company has been struggling to raise cash for its flagship project at Mmamabula that was geared to power the southern African regionÔÇöespecially South Africa.
The move brings to two┬áthe number of┬áresources companies listed on the Botswana Stock Exchange┬áwhich are under┬áimminent┬átake-over as the international┬ácommodity markets recovers. The┬ácompany that is being┬áunder take-over bid is┬áAfrican Diamonds.