A successful R1-billion transaction on November 24, in which Anglo Coal’s black economic empowerment (BEE) partner Inyosi Coal acquired shares in JSE-listed Thungela Resources, is being labelled a “great achievement” in terms of BEE, according to Inyosi chairperson Yoliswa Balfour.
In addition, Thungela reached an agreement with Inyosi to acquire the remaining 27% shareholding of Anglo American Inyosi Coal (AAIC), in exchange for 4.18-million shares in Thungela. As such, Inyosi will own 3.02% of Thungela.
Also, going forward, Thungela owns 100% of AAIC, whose assets include the Zibulo operation and the recently-approved Elders production replacement project.
In addition, Thungela has applied to the JSE, the Financial Conduct Authority and the LSE to have the new Thungela shares be admitted to trade on the JSE and LSE main boards by November 30.
Inyosi was created in 2007 – with a 27% interest in AAIC – in partnership with Anglo Coal to warehouse key current and future domestic and export-focused coal operations.
Besides acquiring a 3% stake in Thungela, the deal enables Inyosi to also transform its previously unlisted interest into a liquid position in a publicly-traded entity with no long-term restrictions on realising its investment.
“The most important thing is that we have liquidity with the shares, which will enable us to do whatever we need to do,” she says.
The conclusion of the transaction with Thungela taught Inyosi to stay focussed on the company’s vision, and that the objectives of empowerment can be sabotaged by conflicts and disunity within partners, says Balfour.
Successfully concluding the deal resulted in a “beautiful moment of an empowerment success story”, demonstrating that success can be yielded where there is willingness among partners, she adds.
“As Inyosi, we retained our cohesion as a consortium of four shareholders.
“This deal catapults us from the periphery of the coal sector and positions us into the nucleus of the industry where we are able to unlock value and play a meaningful role in this important industry,” says Balfour.
Since inception, Inyosi has “learnt valuable lessons”, such as “grit, determination, perseverance and having a dogged single-mindedness about what we sought to achieve”, which the company intends to take forward, she notes.
Inyosi’s journey over the past 15 years has been “long” with “many milestones” along the way, including Anglo American’s exit of Eskom-supplying coal mines in 2019 and its complete exit from all coal mines in 2020, states Balfour.
These activities culminated in Inyosi being left with only two projects and a wash plant – the Zibulo operation and the Elders project.
This left Inyosi “trapped in debt” after Anglo’s demerger with Thungela, she explains.
However, the R1-billion investment, Inyosi’s establishing of sufficient industry capacity and Thungela shares being issued on the JSE and LSE, puts Inyosi in the financial position to successfully conduct business, says Balfour.