“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.