Phembani Group (Proprietary) Limited, through its wholly owned subsidiary Izimbiwa Associated
Companies (Proprietary) Limited completed the acquisition of Moxitorque Investments (Proprietary)
Limited that will result in it taking a majority stake of Umcebo Mining.
This is a fundamental transaction for Phembani Group in pursuing its goal as a strategic black
empowerment partner to Glencore in South Africa and it demonstrates its ability to execute and
implement sizeable and cash generative transactions. The acquisition is in line with the Group
strategy to increase its coal supply and exercise control over its assets and it will provide it with an
immediate NAV uplift due to the attractive purchase price and deferred payment terms.
Moxitorque owns 16.46% of Lexshell 827 (Proprietary) Limited and 17.08% of Lexshell 826
(Proprietary) Limited, effectively 25.33% of Umcebo Mining (Proprietary) Limited. Moxitorque also
owns preference shares in Lexshell 827.
Umcebo Mining has good quality assets that have generated impressive returns. Umcebo has a 50%
interest in the Wonderfontein Mine and owns 100% of the Wonderfontein Washing Plant in addition
to a number of resources. The Wonderfontein Mine has a three-year Eskom supply contract.
Background and History
Phembani, through its subsidiary Izimbiwa Coal, has a long history of a strong and mutually
beneficial partnership with Glencore that has yielded the Group very attractive returns. Through this
partnership with Glencore, the acquisition of an effective 26% interest in Umcebo in 2010 was
A sale of shares agreement was signed in July 2010 for the acquisition of Umcebo through a special
purpose vehicle Lexshell 826. Phembani (Shanduka at the time) (through Lexshell 828) participated
in the transaction with Glencore, who provided the initial transaction funding and further
The purchase price to acquire 51.9% of Lexshell 827 (effectively 26% of Umcebo) was funded by
preference shares that were issued to Glencore and Moxitorque.
Phembani began discussions with Glencore and the sellers earlier in the year and agreed terms with
the sellers in May 2017. It presented the proposed transaction to its Investment Committee and
Board for approval at the end of May and finalised transaction agreements 14 July 2017. It filed with
the Competition Commission on 20 July 2017 and received approval from the Competition Tribunal
on 20 September 2017. The effective date of the transaction is 3 October 2017.