The R2.1-billion deal to merge Sentula Mining and Shanduka’s coal assets has gone sour after Shanduka’s shareholders failed to support the move.
Mining contractor Sentula on Tuesday said it has been advised by Shanduka that its shareholders have not approved the exchange of shares necessary to facilitate the transaction.
“Sentula has also been advised by a senior executive of Shanduka Resources that the shareholders of Shanduka Group have approved the acceptance of an alternative offer for Shanduka Resources’ coal assets,” Sentula said.
In terms of the proposed transaction, Sentula was to acquire about 30% of the entire issued share capital of Shanduka Coal as well as about 30% of the entire share capital of Kangra Coal, held via the subsidiary Shanduka Coal Investments.
Unlisted Shanduka Resources, which is headed by Cyril Ramaphosa, would then control 51.9% of the merged entity.
Sentula said earlier this month that it expected the transaction to be completed by August this year.
The merger demonstrated Sentula’s will to reignite its coal mining ambitions by expanding its portfolio from mining services and exploration drilling to include operational coal mining assets.
In addition to adding operating mines, the deal was seen as strategic in that it was to introduce a credible and substantial black economic empowerment (BEE) partner.
Sentula will now have to revisit its coal mining and BEE plans. — I-Net Bridge