ENRC plan is silly, says ex director Olisa

David Hellier
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FORMER ENRC director Ken Olisa yesterday slammed as “silly” a plan by the mining company to pay $650m (£405.6m) to buy the outstanding 75 per cent of Kazakh coal producer Shubarkol Komir from its founders.

“The ENRC directors were ill advised to try to do this transaction. Not because it’s a bad deal – it’s not. It’s just a bad idea,” Olisa told City A.M. yesterday.

“Their priority is to convince the City that ENRC’s corporate governance is beyond reproach. Trying to pay $600m to the founding shareholders so soon after the board revolution was silly and is deeply unhelpful to the wider debate about the FTSE.”

ENRC decided last week to postpone a vote on the deal, fearing the board would suffer an embarrassing defeat.

ENRC’s independent shareholders – excluding the three founder shareholders who are selling the Shubarkol shares – had been due to vote on the deal yesterday.

The London-listed miner planned to secure control of Shubarkol by buying the remaining shares from its founder shareholders for up to $650m, a figure independently verified by Lazard, the investment bank.

The company’s senior non-executive director Mehmet Dalman favoured the deal, saying it gave ENRC access to good quality thermal coal.