New Delhi, India — 25 July 2012 – Indian industrial giant Jindal Steel & Power Limited is to purchase Canadian coal mine developer CIC Energy Corporation “’ owner of the Mmamabula coal field in Botswana “’ for US114 million.
Reuters reports that in November 2010 Indian power company JSW offered to buy CIC for US$414 million, but the deal was terminated about eight months later, forcing CIC to look for other buyers.
JSW is headed by Sajjan Jindal, the brother of Jindal Steel chairman Naveen Jindal.
CIC, which has lost a third of its value in the last 12 months, said Jindal Steel had made an offer of C$2.00 per share. The offer is at a premium of 27% over the stock’s Monday closing price of C$1.57 on the Toronto Stock Exchange.
“In the current challenging economic and capital markets environment, we believe that this offer provides fair value for CIC Energy shareholders, CIC chief executive Warren Newfield said.
CIC’s Mmamabula coal field in Botswana has an estimated mineral resource of about 2.4 billion tonnes, giving Jindal Steel much-needed fuel to power its plants in India.
Chairman Naveen Jindal told Reuters in June that Jindal Steel was looking at coal and iron ore projects in South America, Africa and Australia as part of its aim to increase its self sufficiency in steel raw materials.
Source: Reuters Africa. For more information, click here.