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Jindal Steel and Power’s deal to acquire Canada’s CIC Energy for about C$116 million (over Rs 600 crore) has been approved by the shareholders of Canadian firm.
In a filing to the Toronto Stock Exchange (TSX), CIC said the deal was “approved by the shareholders of CIC Energy at the special meeting of shareholders held on August 27.
Approximately 97 per cent of the votes cast at the meeting were voted in favour of the proposed acquisition.”
On July 23, JSPL had entered into an all-cash deal to acquire 100 per cent stake in CIC Energy which holds 2.6 billion tonnes of high thermal coal in Botswana.
As per the agreement, CIC will be merged with JSPL’s wholly owned subsidiary, Jindal BVI Ltd, and its shareholders would get C$2 per share for their outstanding shares in the Canadian firm, taking the total acquisition cost at C$116 million.
The deal has also been approved by the Botswana Competition Authority under the Competition Act (Botswana), it further said, adding that “the merger is expected to close within the next two weeks’’.
The deal would provide the Naveen Jindal-led firm access to CIC’s 2.6 bt of high quality thermal coal in Botswana, which will ensure long-term fuel security to JSPL’s power ventures, including that of subsidiary Jindal Power.
According to CIC, the price offered by JSPL at C$2 per share to CIC shareholders is a premium of 65 per cent to the volume-weighted average trading price of the Canadian firm’s shares on TSX for last one month.
The Canadian firm has a mining-cum-power complex called Mmamabula Energy Complex in Botswana, Africa and its Mmamubala coal field is estimated to hold 2.6 bt of high thermal coal, mostly above 6,000 kcal/kg of calorific value.
According to the company website, CIC is working to begin production in the next 3-4 years and thereafter, it will export up to 24 mt of coal per year from the Mmamabula coal field.
Shares of JSPL were being traded at Rs 348.30 apiece on the BSE in the afternoon trade, down 7.65 per cent from the previous close.
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