https://www.miningweekly.com

enX, Eqstra sign R7.8bn deal to create ‘industrial powerhouse’

30th June 2016

By: Creamer Media Reporter

  

Font size: - +

JSE-listed industrial energy group enX will acquire two of JSE-listed industrial and capital equipment group Eqstra’s divisions and recapitalise Eqstra’s contract mining division in a R7.8-billion deal.

enX would issue 52.7-million of its shares (consideration shares), at R21 apiece, to Eqstra for the acquisition of its Industrial Equipment (IE) and Fleet Management and Logistics (FML) divisions. It would also raise R1.5-billion, of which R1.4-billion would be used to recapitalise Eqstra’s Contract Mining and Plant Rental (CMPR) division.

Under the terms of the transaction, enX would assume R5.2-billion of Eqstra’s reprofiled bank and noteholder debt, while Eqstra shareholders would receive 0.13 enX shares for every Eqstra share held, as well as retain a share in Eqstra’s contract mining business.

Once the transaction was completed, which was currently expected to occur in the fourth quarter of this year, enX’s businesses would be divided into three clusters – industrial equipment, comprising Eqstra’s IE division and enX’s power and wood businesses; fleet management, comprising Eqstra’s FML division; and fuel and chemicals, comprising enX’s oil lubricants business and the chemicals distribution business of soon-to-be-acquired West Africa International.

The contract mining division would have a new capital structure and remain a standalone public company, with the R1.4-billion capital injection to be used to repay current bank debt.

Eqstra would unbundle the consideration shares to its shareholders.

enX CEO Paul Mansour would take up the position of enX deputy chairperson and Eqstra CEO Jannie Serfontein would assume the role of enX CEO once the deal was completed.

“Our vision is to build the next industrial powerhouse. This transaction with Eqstra represents an opportunity to take a significant step towards achieving this goal. We also have the prospect of building a dedicated and focused mining services business.

“We are also confident that this transaction addresses the interests of shareholders and provides a well-grounded opportunity to participate in a new-look company whose prospects are strengthened,” Mansour said in a statement on Thursday.

Serfontein added that Eqstra’s board believed the transaction would deal with the challenges faced by Eqstra in the “most constructive way possible”.

“It provides a material uplift for Eqstra shareholders, allows them to retain exposure to the industrial equipment and fleet management businesses, creates a sustainable capital structure and retains a share in the contract mining division,” he noted.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION