Tue Oct 11, 2011
* To pay up to $650 mln to buy stake from ENRC founders
* Acquisition to lift ENRC coal capacity to over 25 mtpa
* Independent shareholders to vote on deal on Nov 7
* CEO mulls future development within platinum sector
By Julie Crust
LONDON, Oct 11 (Reuters) - Miner ENRC plans to buy the outstanding 75 percent of Kazakh coal producer Shubarkol Komir from ENRC's founders for up to $650 million, giving it access to low-cost coal for its existing operations and expansion plans.
Eurasian Natural Resources Corp (ENRC) plans to exercise an option to buy the shareholding from the three founding shareholders, who together own 43.8 percent of the London-listed miner, for $600 million plus assumed debt of $50 million.
As a related transaction, the acquisition will require approval from independent ENRC shareholders at a meeting due to be held on Nov. 7 and, if approved, could be completed by the end of next month, ENRC Chief Executive Felix Vulis told Reuters on Tuesday.
Vulis said he is "pretty confident" that the acquisition will get shareholder approval and that the amount to be paid is a fair price.
"We secured the deal when the price of coal was $45-55 a tonne, today it is twice as much," said Vulis. "We have been through a very thorough appraisal process," he said, noting that both advisors valued the deal in line with ENRC.
Credit Suisse advised ENRC and Lazard & Co. advised the independent non-executive directors.
FTSE 100 miner ENRC acquired a 25 percent stake in Shubarkol for $200 million in cash in February 2009.
The acquisition of Shubarkol, a thermal coal producer that produced about 6.0 million tonnes of coal last year will raise ENRC's coal production capacity in Kazakhstan to more than 25 million tonnes a year.
"This is an important strategic acquisition which secures reliable access to the supply of relatively high quality and low-cost thermal coal," Vulis said.
"We are consuming more than 1 mln tonnes of this coal within our enterprises in Kazakhstan," he said.
Current valuation levels for miners are close to the lows hit during the 2008 crisis, making potential targets cheap, and enabling cash-rich miners such as Glencore to lift minority stakes in existing companies.
ENRC has a 14.35 percent stake in Northam Platinum , a major South African platinum producer, that has seen its shares fall almost a third this year.
"We are pretty much considering our future development within this sector," Vulis said, adding that an announcement would be made in due course.
ENRC said it plans to use about 50 percent of the semi-coke and the majority of the coke produced by Shubarkol within its own operations and will sell the majority of the thermal coal to third-party customers.
Shubarkol has estimated proved and probable coal reserves of about 326.2 million tonnes, as of the start of this year.
Shares in ENRC were down 1 percent at 0959 GMT, in line with a British mining index .
"With an H1 2011 net debt of just $2 million, ENRC is well-placed to fund the acquisition however for us the proof will be in the pudding as ENRC increase product diversification and demonstrate the cost benefits of securing additional raw materials to drive its Kazakh businesses," said Liberum Capital analyst Ash Lazenby.
ENRC ended a long-awaited governance review on Sept. 28, unexpectedly confirming both the chairman and chief executive in their roles as part of a trimmer board that it hopes will revive its underperforming shares.
However, speculation about possible board changes has continued to be reported.
"I don't know where these rumours are coming from. I am very happy with the size of the board and I'm very happy with the review," Vulis said. (sourced Reuters)
Showing posts with label ENRC. Show all posts
Showing posts with label ENRC. Show all posts
Tuesday, October 11, 2011
Thursday, March 10, 2011
The biggest company you never heard of
Thu Mar 10, 2011 10:47am GMT
Performance is rewarded on a scale that would turn even Wall Street green, with bonuses for star traders running into the tens of millions. Glencore's 500 partners and key staff are sitting on a book value of $20 billion.
The secret, says the second outsider, is the traders' incredible focus. "I don't recall talking to any of these guys -- and I've spent a lot of time with them -- about anything other than business," he told Reuters. "I have no idea what sort of family life these guys have. This is everything."
Employees are hired young and expected to make a career at the group, where they are known as either "thinkers" -- bright number-crunchers who design the company's complex financial deals -- or "soldiers", the hard-driven traders who fight to win the transactions.
The company's 10 division managers are aged 37 to 52 and remain largely anonymous outside Glencore's business circles. "They're really bright guys, they are really focused, they play to win every day," says a mining executive in North America. Or as the second outsider puts it: "They look like kids, really -- but they are incredibly impressive individuals."
Nobody more so than Chief Executive Ivan Glasenberg, a lean publicity-shy operator whose sport is race-walking. Glasenberg, 54, grew up in South Africa and has been a champion walker for both South Africa and Israel. Each morning he runs or swims, often with colleagues. "The thing about Ivan, he can fly in and meet presidents of countries but he also talks to the guy on the trading floor," said Jim Cochrane, chief commercial officer and executive director of the Kazakh mining group ENRC.
After earning an MBA at the University of Southern California in 1983, Glasenberg was hired by Glencore as a coal trader in South Africa. He does not suffer fools and has a fiery temper, but is also intensely charming and has a sharp memory for details about people, according to people who know him. Despite being a billionaire in charge of thousands of staff, "this is a guy that picks up his own phone," the second outsider said. For more visit Thomson Reuters site
The secret, says the second outsider, is the traders' incredible focus. "I don't recall talking to any of these guys -- and I've spent a lot of time with them -- about anything other than business," he told Reuters. "I have no idea what sort of family life these guys have. This is everything."
Employees are hired young and expected to make a career at the group, where they are known as either "thinkers" -- bright number-crunchers who design the company's complex financial deals -- or "soldiers", the hard-driven traders who fight to win the transactions.
The company's 10 division managers are aged 37 to 52 and remain largely anonymous outside Glencore's business circles. "They're really bright guys, they are really focused, they play to win every day," says a mining executive in North America. Or as the second outsider puts it: "They look like kids, really -- but they are incredibly impressive individuals."
Nobody more so than Chief Executive Ivan Glasenberg, a lean publicity-shy operator whose sport is race-walking. Glasenberg, 54, grew up in South Africa and has been a champion walker for both South Africa and Israel. Each morning he runs or swims, often with colleagues. "The thing about Ivan, he can fly in and meet presidents of countries but he also talks to the guy on the trading floor," said Jim Cochrane, chief commercial officer and executive director of the Kazakh mining group ENRC.
After earning an MBA at the University of Southern California in 1983, Glasenberg was hired by Glencore as a coal trader in South Africa. He does not suffer fools and has a fiery temper, but is also intensely charming and has a sharp memory for details about people, according to people who know him. Despite being a billionaire in charge of thousands of staff, "this is a guy that picks up his own phone," the second outsider said. For more visit Thomson Reuters site
Thursday, March 3, 2011
ENRC to Spend USD 7 billion on Kazakh and Brazilian iron ore growth
Thursday, 03 Mar 2011 |bloomberg|
Tags :investment in iron ore and coal reserves, raw material, steel mills
Eurasian Natural Resources Corp a ferroalloy producer plans to invest USD 6.8 billion to increase iron-ore output in Kazakhstan and Brazil as prices for the steelmaking ingredient climb.
ENRC, based in London, aims to become a leading global iron ore miner with annual output of 70 million tonnes by 2016, Mr Felix Vulis CEO of ENRC at a BMO Capital Markets conference in Hollywood, Florida said that the company currently mines iron ore only in Kazakhstan, where its annual production is 17 million saleable tonnes.
Mining companies are boosting investment in reserves of iron ore and coal, both used to make steel, as Asian demand drives up prices. The price of iron ore imports to China, the world’s largest consumer of the raw material, jumped 70% last year, while European benchmark coal rose 38% in London, according to data compiled by Bloomberg.
ENRC’s investment program includes USD 2.1 billion to expand iron ore operations in Kazakhstan, where the company plans to increase output to 23 million tonnes by 2015.
ENRC, based in London, aims to become a leading global iron ore miner with annual output of 70 million tonnes by 2016, Mr Felix Vulis CEO of ENRC at a BMO Capital Markets conference in Hollywood, Florida said that the company currently mines iron ore only in Kazakhstan, where its annual production is 17 million saleable tonnes.
Mining companies are boosting investment in reserves of iron ore and coal, both used to make steel, as Asian demand drives up prices. The price of iron ore imports to China, the world’s largest consumer of the raw material, jumped 70% last year, while European benchmark coal rose 38% in London, according to data compiled by Bloomberg.
ENRC’s investment program includes USD 2.1 billion to expand iron ore operations in Kazakhstan, where the company plans to increase output to 23 million tonnes by 2015.
Tags :investment in iron ore and coal reserves, raw material, steel mills
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