Johannesburg - Coal of Africa on Friday announced a deal in which African Global Capital, Coal Investments Limited and their affiliates will take an empowerment stake in the company.
The company said the deal would ensure full compliance with legislative requirements for BEE groups to hold at least a 26 percent equity interest in mining companies by 2014.
Coal Investments Limited - owned by affiliated investment funds of Och-Ziff - will subscribe for shares and options to give itself and its partners in the deal a stake 'in excess of 26 percent' of the company.
African Global Capital is the first fund managed by the recently formed private equity initiative involving Mvelaphanda Holdings, OZ Management - an operating entity of Och-Ziff Capital Management Group - and Palladino Holdings.
"The company's BEE status is absolutely critical to its future and the company is therefore pleased to have reached this agreement. The quality of our BEE partner cannot be understated and we believe that Mvela, AGC and Och-Ziff will add significant value to Coal," said Coal of Africa managing director Simon Farrell.
Mvela chief executive Mark Willcox said the deal was important for Mvela and African Global Capital, as "it strengthens our relationship with Coal of Africa which we see as a strategic investment".
"As we have done in previous Mvela BEE transactions, we will bring together a broad-based group of beneficiaries to ensure that the historically disadvantaged community benefits from exposure to the mining sector in South Africa," he said.
Coal of Africa will issue 37 500 000 new ordinary shares at an issue price of £1.30 per placement share, raising up to £48.75 million in the process.
The deal includes a condition that the partners cannot dispose of the placement shares nor the options within a period of 12 months from the issuance of the first tranche of placement shares, unless such disposal is to an affiliate of the empowerment company or another BEE group.