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EXXARO RESOURCES LIMITED - EXX - Exxaro acquires remaining 50% stake of Cennergi from Tata Power

Release Date: 17/09/2019 07:05
Code(s): EXX     PDF:  
Wrap Text
EXX - Exxaro acquires remaining 50% stake of Cennergi from Tata Power

EXXARO RESOURCES LIMITED
Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
JSE share code: EXX
ISIN code: ZAE000084992
ADR code: EXXAY
(Exxaro)

EXXARO ACQUIRES REMAINING 50% STAKE OF CENNERGI FROM TATA POWER

Announcement

-       Exxaro is pleased to announce that it has concluded an agreement with Khopoli Investments Ltd
        (“Khopoli”), wholly owned by the Tata Power Company Ltd (“Tata”), to acquire Khopoli’s 50%
        shareholding in Cennergi (Pty) Ltd (“Cennergi”) for an amount of R1,550 million, subject to normal
        working capital adjustments.
-       Post the conclusion of the agreement, Exxaro will have 100% ownership of Cennergi.

Conditions Precedent

The agreement will be subject to, amongst others, the normal regulatory approvals customary for this type
of transaction.

About Cennergi

-       Cennergi owns 2 wind farms which were originally bid as part of Window 2 of the Department of
        Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)
        namely: -
o       Amakhala Emoyeni Wind Farm situated near Cookhouse in the Eastern Cape with an installed
        capacity of 134 Megawatts; and
o       Tsitsikamma Community Wind Farm located close to Tsitsikamma in the Eastern Cape with an
        installed capacity of 95 Megawatts.

Rationale for the transaction

The acquisition of Tata’s 50% shareholding follows Exxaro’s ambitions of growing its presence in the energy
sector.

Finances

-       Both Cennergi’s projects are financed via limited non-recourse funding to the amount of circa 75%
        of the initial project capital.
o       Outstanding debt is projected to be circa R4.9bn by December 2019, repayable over a 15-year
        period commencing from 2016;
o       The debt will be excluded from the Exxaro debt covenant ratios as it is limited recourse funding
        with no additional security from Exxaro.
-       Projected EBITDA for 2019 is estimated to be circa R850m.

“the collaboration between Exxaro and Tata Power over the past seven years to develop these projects to
their current status has been commendable and an outstanding success in South Africa’s implementation
of its energy strategy. As a South African-based company, Exxaro is pleased with this opportunity to
consolidate its interest in this renewable energy asset at a time in South Africa where we need energy
security as we respond to increasing negative sentiment towards coal-based electricity generation,” said
Mr Mxolisi Mgojo, CEO of Exxaro Resources.

SE VAN LOGGERENBERG
GROUP COMPANY SECRETARY

17 September 2019

Sponsor
Absa Bank Limited, acting through its Corporate and Investment Banking Division

Legal advisers

Inlexso (Pty) Ltd
Tshisevhe Gwina Ratshimbilani Incorporated, TGR Attorneys


Date: 17/09/2019 07:05:00
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