Staff Writer
27 October 2008
BSE-listed Aviva Corporation has entered into a merger implementation agreement with Northern Energy Mining Inc (NEMI) to create a new growth-oriented international coal and energy group, Aviva has announced in a statement.
The combined entity will provide investors with exposure to operating and development stage assets across attractive metallurgical and thermal coal projects, the statement says.
Under the arrangement, Aviva shareholders will receive 0.59 NEMI shares for each Aviva share they hold at completion of the agreement. The merged group will maintain its primary listing on the TSX and the BSE.
Existing shareholders of NEMI and former shareholders of Aviva will each hold approximately 50 percent of the expanded share capital of the merged group at closing on a diluted basis. Following these developments, Aviva, which had suspended trading of its shares on the BSE for two days, resumed trading on Wednesday and gained 10thebe to 150thebe.
In another positive development for the integrated energy developer, the company has been advised that the Aviva Corporation Ltd. and GDF Suez consortium has been unconditionally qualified to submit a bid in respect of the Eskom base-load IPP programme.
Aviva and GDF Suez submitted a qualifying document for a 1,000MW power IPP utilising the coal from the Mmamantswe project in Botswana to Eskom, the South African power utility which is seeking proposals for the supply of up to 4,500MW from Independent Power Producers located in South Africa.
Aviva is proposing a 12Mtpa coal mine to support a 1,000MW integrated power station and 8Mtpa of external sales. Eskom has initiated two supply processes seeking up to 780Mt of coal supply over 40 years for its new power stations, and 4,500MW of independent power generation.Aviva has submitted an Expression of Interest to supply Eskom with 6 to 12Mtpa of coal over a 40-year period from the Mmamantswe deposit.
The Mmamantswe deposit is located only 150 kilometres from planned Eskom power stations across the border with South Africa and 70kilometres from the railway servicing those locations. Aviva's Chief Executive Officer, Lindsay Reed, says signs of sustained energy demand in Botswana and South Africa remained strong. "The demand for electricity in the region continues to exceed supply," Reed says, "a situation that Aviva expects to continue for many years despite the recent commitment by Eskom to construct several very large coal-fired power stations."
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