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Wescoal to buy coal trader for R79m

13th June 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – JSE-listed junior miner Wescoal has moved to acquire a coal trading business from an undisclosed third party for R79-million in property, movable assets and goodwill.

The acquisition, through Wescoal’s wholly owned subsidiary Chandler Coal, was expected to provide the group’s trading arm with sufficient critical mass to negotiate and overcome competition and volume challenges.

“Since 2008, the various coal supply companies operating in the South African domestic market have had to compete with the primary producers resulting in reduced volumes and pressure on margins,” the company said in a statement in Thursday.

Further, the purchase of the coal business would enable Chandler to generate significant synergy savings and profits, thereby, enhancing Wescoal’s earnings and shareholder value.

The undisclosed third party’s coal supply business operated within Southern Africa, with offices and depots located in Gauteng, the Eastern Cape and the Western Cape.

The deal was expected to be completed by October 31, subject to conditions, including the conclusion of a legal and financial due diligence investigation; shareholder approval; the necessary regulatory approvals; and Chandler being able to secure funding for the acquisition, besides others.

Edited by Mariaan Webb
Creamer Media Contract Publishing Editor

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