French oil and gas major, Total, has confirmed it has closed the sale of its coal mining subsidiary, Total Coal South Africa, to Exxaro, following approval by the South African government. The divestment took place on 20 August, according to a company statement.
Exxaro will pay US$262 million in cash for the assets, as well as five annual payments totalling US$120 million – valuing the deal at significantly less than the US$472 million price tag given when the deal was first announced last year.
“In the 12-month period since the acquisition was announced, commodity market conditions have deteriorated significantly,” Exxaro said in a statement. “As a consequence, Exxaro and Total have agreed to a reduction in the purchase consideration to take into account the change in market circumstances.”
Exxaro also said that it intended to create new black-empowerment participation in the deal on “arms-length commercial terms.”
Meanwhile, Total announced that it intended to exit the coal industry completely with the sale of its coal marketing business by the end of next year to focus on its core oil and gas operations.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/mining/25082015/total-completes-sales-of-coal-mining-operations-2778/