Guest Contributor | Jul 25, 2017 | 0
EnX, Eqstra announce significant transaction
Eqstra and enX, also a JSE-Iisted industrial company, recently announced a significant transaction that will strengthen and boost their capability to support their customers.
The features of the transaction announced through the Johannesburg Stock Exchange are that enX will acquire Eqstra’s Industrial Equipment and Fleet Management divisions and reposition their mining division, MCC on the JSE as a standalone mining services business, with enX maintaining a 20% stake.
The enX group will pay for the acquisition by issuing new enX shares to Eqstra. This will enable enX to acquire the Industrial Equipment and Fleet Management divisions. enX will also raise fresh equity and the proceeds will be injected into MCC, the contract mining division to reduce gearing levels.
The plan is to arrange the new enX group in three clusters; Industrial Equipment, which will comprise Eqstra’s Industrial Equipment division and enX’s existing power and wood businesses; Fleet Management, which will comprise Eqstra’s Fleet Management division; and Fuel and Chemicals, which will comprise enX’s oil lubricants business and the chemicals distribution business of recently acquired West Africa International Proprietary Limited.
According to the group, the businesses being brought under the umbrella of the new group are complementary in nature with virtually no overlap among their operations.
The implication for customers is that Eqstra will maintain its leading positions across several market sectors and deepen its relationships with OEMs and other suppliers essential to our ability to deliver products and services.
The background to this transaction is to align Eqstra’s strategy to its funding model in the context of the significant changes in the local economy and global commodities sectors over the past few years. This transaction with enX will address this challenge through a new debt facility with smoothed maturities in order to grow alongside our customers.
The plan is to take advantage of new opportunities in different territories, mining of different products and providing new service offerings.
Paul Mansour, the current CEO of enX, will assume the role of Deputy Chairman of the new enX group when the transaction is finalised. Jannie Serfontein will become enX’s Chief Executive Officer.