conti and absa

I know part of Conti’s growth strategy was about picking up small, fractured and distressed coal assets and bundling them into the development pipeline on their way to becoming a mid-tier producer. This was how Mashala came into Conti’s sights and was part of the ‘vision’ that many investors were attracted too.

I believe that Unihold Resources is one of the keys to understanding Conti. Unihold Resources did own the controlling stake (50.5%) in Mashala Resources and all the associated companies. The main entities being Mashala Hendrina Coal, Mandla Coal Resources, BW Mining and Penumbra Coal Mining. (Note – Conti owns a direct 38% holding in Mashala and about 70% of Unihold’s 50.5% stake in Mashala, which gives Conti 73% control and I assume SIOC-cdt will pick up the remaining stake eventually). See p4 of Conti’s AIM admission details for details on Unihold Resources holdings in CCC.
http://www.conticoal.com/fileadmin/content/Aim_listing_docs/CCC_AIM_Admission_Appendix_-_clean_version.pdf

From Unihold’s own website we gleam the following …

- The present focus of Unihold is investment banking, corporate finance, management consulting and business turnarounds. (can say that again).

- Unihold (Unihold Limited) was until 2002, listed on the Johannesburg Stock Exchange (JSE) for over 40 years.

- Gary Harlow, Chief Executive of Unihold since 1996, led a successful MBO in June 2002.

- Unihold is wholly owned by Clidet No. 390 (Pty) Ltd, in turn owned by directors and business associates.

(Full blurb on Unihold here http://www.unihold.co.za/homepage.htm)

So who owns Clidet No. 390 (Pty) Ltd?

Well according to this document Clidet No. 390 (Pty) Ltd is owned by ABSA. (Link http://www.saflii.org/za/cases/ZACT/2002/36.pdf)

Some key points from this document:

On 29 May 2002 the Competition Tribunal issued a Merger Clearance Certificate approving the merger between Clidet No. 390 (Pty) Ltd and Unihold Limited in terms of section 16(2)(a).

The acquiring firm is Clidet No. 390, a special purpose vehicle formed for the purpose of the instant transaction.

In terms of a scheme of arrangement under section 311 of the Companies Act 61 of 1973, Clidet, is acquiring a 77.4% shareholding in Unihold. Clidet will post-merger be controlled by ABSA Bank Limited (“ABSA”) and Unihold Shareholders (the “Management Shareholders”).



Hopefully when the time is right we shouldn’t have too much trouble getting the ABSA financing/drawdown for Penumbra. I guess what will be interesting is what facilitation or loan fees we need to pay for, if any, assuming Conti goes with ABSA’s $65m package.