Last Updated
Wednesday 17 December 2014, 20:36 pm.
Indian firm gets nod to buy Mmamabula

The Mmamabula Energy Project (MEP) received a boost this week when the Competition Authority (CA) gave the green light to a proposed full take over of the developers of the project, CIC Energy, by Indian company, Jindal Steel and Energy.
By Staff Writer Thu 18 Dec 2014, 16:24 pm (GMT +2)
Mmegi Online :: Indian firm gets nod to buy Mmamabula








Jindal Steel and Energy has submitted a two Canadian Dollar per share (P15 per share) 100 percent bid for the Canadian company which has since 2006 suffered a string of setbacks in trying to spring the 1,200MW project to life.

In a statement released yesterday, the CA said they had determined to authorise the proposed acquisition on the grounds that there is no evidence of any substantive competition concerns that the proposed deal will raise in the energy and coal markets in Botswana.

"The proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of the service, due to the nature of the transaction being a foreign direct investment. The transaction is also likely to promote technical and economic progress in that Jindal will be able to resuscitate the pending MEP which will be a reliable source for energy in Botswana and possibly with the neighbouring states," said the CA chief executive officer Thula Kaira.

While CIC's dream to develop the MEP was shattered by a failure to commit South Africa's Eskom as the off taker, Jindal will look to the 2.4 billion tonnes at the Mmamabula coal fields as the answer to their huge appetite for fuel to power its steel plants in India.

In coming up with their decision, the competition watchdog also said they considered that the coal and energy market in Botswana is still underdeveloped and also, with no spade yet on the ground at the Mmamabula coal fields, no significant competition issues are likely to arise from the acquisition.

The CA's decision will be a jolt for the resuscitation of the giant coal mining and energy project as it also follows on last week's decision by government to renew CIC's retention licence for an area holding approximately 361 million tonnes of coal at Mmamabula.

However, despite the recent encouraging developments, a key meeting slated for Monday (August 27th) in Mauritius will make or break the deal, as CIC shareholders will vote on whether to accept or decline Jindal's proposal.

While Jindal's proposed P15 a share offer might be lucrative for some shareholders that have hung on to the stock since 2006, others might feel the bid price is too low compared to the P55 per share offered by another Indian firm, JSW Energy, in a bid that collapsed last May.

 JSW is headed by Sajjan Jindal, the brother of Jindal Steel chairman Naveen Jindal.



Exchange Rates
FOREIGN EXCHANGE: Thursday, 18 Dec 2014
FOREIGN / PULA
PULA / FOREIGN
1 USD = Pula   9.5057
1 GBP = Pula   14.8148
1 EUR = Pula   11.7233
1 YEN = Pula   0.0801
1 ZAR = Pula   0.8185
1 Pula = USD   0.1052
1 Pula = GBP   0.0675
1 Pula = EUR   0.0853
1 Pula = YEN   12.49
1 Pula = ZAR   1.2218
Banner Image
Stock Exchange
STOCK EXCHANGE: Wednesday, 17 Dec 2014
DOMESTIC STOCKS
ABCH
714
BARCLAYS
343
BIHL
1151
CHOBE
427
CHOPPIES
406
CRESTA
89
ENGEN
950
FNBB
361
FSG
237
FURNMART
220
G4S
374
LETLOLE
215
LETSHEGO
266
NAP
217
OLYMPIA
20
PRIMETIME
260
RDCP
202
SECHABA
2810
SEFALANA
922
STANCHART
1258
TURNSTAR
208
WIL
310
IMARA
210
  • Previous
    The Hobbit: The Battle of the Five Armies Poster
    Next
    Masa Centre
    ::: Friday 12 Dec - Thursday 18 Dec :::
    The Hobbit: The Battle of the Five Armies
    Love, Rosie
    Penguins of Madagascar
    No Good Deed
    The Hunger Games: Mockingjay - Part 1
  • Previous
    Walking on Sunshine Poster
    Next
    Riverwalk
    ::: Friday 12 Dec - Thursday 18 Dec :::
    Walking on Sunshine
    The Hobbit: The Battle of the Five Armies
    Penguins of Madagascar
    The Hunger Games: Mockingjay - Part 1
  • Previous
    Love, Rosie Poster
    Next
    Gamecity
    ::: Friday 12 Dec - Thursday 18 Dec :::
    Love, Rosie
    The Hobbit: The Battle of the Five Armies
    Penguins of Madagascar
    The Hunger Games: Mockingjay - Part 1
    Horrible Bosses 2
    The Equalizer