MC Mining’s independent board committee has advised shareholders to consider accepting Goldway Capital Investment’s A$0.16 per share offer.
The board noted that as of April 8, the offer was declared unconditional by Goldway and that it and other consortium members had disclosed a relevant interest in 83.67% of MC Mining’s issued shares.
Taking into account the fact that the offer has now been declared unconditional and control of MC Mining will pass to Goldway and its associates, the board believes shareholders should consider accepting the offer, it said in a statement on Wednesday.
They have advised this in light of Goldway's statements regarding its intention to delist MC Mining and its statements that it may exercise rights for the compulsory acquisition of all remaining shares if it acquires a relevant interest of 91.075% or more.
The board also cites the limited liquidity in the trading of MC Mining’s shares and its view that there is no likelihood of an alternative bid or competing proposal on more favourable terms arising in the near term.
The junior coal miner has a primary listing in Australia and secondary listings on the JSE and the UK’s Alternative Investment Market.
If shareholders who have not yet accepted the offer do not do so before it closes, they may, in the event Goldway does not exercise compulsory acquisition rights, become minority shareholders in an unlisted, illiquid company and face difficulty selling their minority shareholding off-market, the board said.
The board also cautioned shareholders against taking no action and waiting for their shares to be acquired by Goldway as part of a compulsory acquisition transaction, given that there is no certainty that Goldway will be entitled to proceed to compulsory acquisition.
“Even if shareholders believe that the compulsory acquisition is likely to occur, the receipt of any consideration from Goldway for the acquisition of shares under the offer will be at a significantly earlier date than any consideration payment from Goldway pursuant to a compulsory acquisition transaction,” it said.
The offer will remain open for acceptance until 11am SA time on Monday April 22.
In February, Goldway offered to buy out the remaining MC Mining shareholders for A$0.16 a share in cash.
MC Mining at the time accused the consortium represented by Goldway of presenting misleading information to shareholders to encourage them to accept an offer that its independent board committee has said significantly undervalued the company.
MC Mining previously consistently urged minority shareholders to reject the proposal, which required at least 82.2% of the shares in issue to go through.
Earlier in March, Vulcan Resources announced a nonbinding proposal to make an off-market cash takeover offer for MC Mining. Vulcan’s proposal was at an indicative price of A$0.17-A$0.20 a share, valuing MC Mining at A$69.34m-A$81.58m (compared with the Goldway offer, which valued the company at about A$65.3m). However, a week later, Vulcan Resources said it was walking away from the deal.
The junior miner relies on the Uitkomst colliery in KwaZulu-Natal for cash generation, but its flagship project is the development of the capital-intensive Makhado project, which would be SA’s only producer of hard coking coal.
The Makhado project has been in the pipeline for the past decade, but MC Mining has been battling to secure funding for it.
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