SAEC requires on-going investment to sustain production and meet its take or pay rail and domestic supply obligations. To sustainably improve its financial performance, the company will restructure SAEC and manage it separately from the rest of the Group with tailored functional support, systems and governance processes.
This change will also allow the Group to further simplify the way it manages its global portfolio.
Once SAEC has been established as a stand-alone business and consistent with South32’s objective to further transform its South African operations, it will commence a process to broaden ownership of SAEC.
This will present opportunities for Broad-Based Black Economic Empowerment entities, employees and communities, and could lead to a listing of SAEC on the Johannesburg Stock Exchange.
SAEC will continue to be consolidated in the Group’s financial statements on a 100% basis until there is a change in control.
“Establishing South Africa Energy Coal as a stand-alone business will enable us to improve the operation’s competitiveness and ensure its on-going sustainability. This process will also allow us to further simplify our organisation and unlock additional value for shareholders,” says South32 CEO Graham Kerr.
“We will also seek to increase the local ownership of South Africa Energy Coal, consistent with our commitment to South Africa’s economic transformation, and may ultimately list the business on the Johannesburg Stock Exchange.”
Feature image credit: www.123rf.com