ENRC to buy control of Kazakh coal company for US$650m
- Publishing Date
- 11 Oct 2011 10:40am GMT
- Author
- Mining Journal
The board of directors of Eurasian Natural Resources Corporation plc (ENRC) has agreed to exercise an option allowing the company to purchase the remaining 75% of Kazakh coal producer, Shubarkol Komir JSC for US$650 million.
ENRC says the acquisition will strengthen its integrated business model by securing supply of semi-coke and thermal coal used in its ferroalloys, iron ore and alumina and aluminium divisions.
In 2010 Shubarkol produced approximately 6Mt of thermal coal. The company reported earnings before interest, tax, depreciation and amortisation (EBITDA) of US$85.3 million.
In 2009, ENRC purchased its initial 25% stake in Shubarkol and the call option for US$200 million. Shubarkol is owned by Eurasian's largest shareholders, making the proposal to buy the remaining 75% a related party transaction that will require a shareholder vote.
The deal involves a US$600 million cash purchase and US$50 million in assumed debt.
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