Publications
Partners
Johannesburg – Wescoal’s wholly owned subsidiary Chandler Coal has made an offer to acquire a coal trading business from a third party for R79m
Wescoal’s trading arm Chandler is a coal supplier to the Southern African domestic market with offices and depots in Gauteng‚ Eastern and Western Cape.
Since 2008 the various coal supply companies operating in the domestic market have had to compete with the primary producers resulting in reduced volumes and pressure on margins.
The acquisition will give the trading division the critical mass required to negotiate and overcome these challenges. In addition‚ significant synergy savings and the profits generated by the third party's coal business will enhance Wescoal earnings and shareholder value‚ it said.
The third party is a coal supply business operating within the Southern African region with offices and various depots in Gauteng‚ Eastern and Western Cape.
On 7 June Chandler made an offer to acquire the coal business with effect from 1 October 2013 and the offer was accepted by the third party subject to various suspensive conditions‚ Wescoal said on Thursday.
The acquisition is conditional on the the completion of legal agreements‚ the legal and financial due diligence investigation into the business and Chandler being able to secure funding for the acquisition.
It is also condtitional on Competition Commission approval.
Shareholders will be notified once the final agreements have been signed and will be kept up to date on progress on the acquisition‚ Wescoal said.
