CIC Energy, the developers of the ambitious Mmamabula Energy Complex in Botswana, said on Thursday there was no progress report as due diligence continues over a possible takeover by an Indian power conglomerate.
Since September, the British Virgin Islands based and Botswana Stock Exchange (BSE) listed company has been a subject of a takeover bid by unnamed suitor because of its value as it controls larger coal deposits in the country.
“(The company) announces that there are no corporate developments,” CIC Energy said on its website.
“The due diligence and negotiations towards a definitive binding acquisition agreement with the conglomerate referred to in the company’s news release of October 8, 2010 remain ongoing,” it added.
The move to give the update follows relentless inquiries from journalists and analysts who are interested in knowing the progress, which, when complete, will make the unnamed Indian suitor influential in the region rich in coal reserves.
The undisclosed conglomerate was reported by India’s Economic Times as JSW Group, which the paper claimed could be in the front line into buying the company, which sits on large economic coal deposits in the Central District of Botswana.
CIC Energy, however, has since declined to name its suitor, only saying it has opened-up to its┬ásuitor 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
It granted to the┬áIndian conglomerate┬á“exclusivity to permit the completion of due diligence and the negotiation of a definitive binding acquisition agreement.”
The company, which is said to be one of the biggest in the world, has since indicated that they are desirous┬áabout acquiring all listed and unlisted shares of the┬áCIC in a bid to have full control of┬áMmamabula project.
It indicated 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.
CIC Energy 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.
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.
CIC Energy 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.
The company has been struggling to raise cash for its flagship project at Mmamabula that was geared to power the southern African regionÔÇöespecially South Africa.