Eqstra announces mammoth deal with enX, sees shares jump 11.33%

Capital equipment, fleet management and contract mining group Eqstra has concluded an all-share deal with JSE-listed industrial energy group enX which will see enX acquire its fleet management and industrial equipment divisions in exchange for 52.7 million shares, valued at R21 per share, and raise R1.5 billion of which R1.4 billion will be used to recapitalise the contract mining business.

The deal will make Eqstra a 29.6% owner of enX, although Eqstra has said it intends unbundling the enX shares to its shareholders once this part of the deal is concluded. Following the announcement, Eqstra's share price jumped 11.33% to R2.85, though enX's share price remained unchanged at R2.13.

The transaction will see the spinning off of Eqstra's contract mining business, which will remain listed. Eqstra's contract mining and plant rental divisions will gain R101.4 million by selling 101.4 million preference shares to enX for R1 each. Eqstra has said the deal should help it substantially reduce debt and enable its contract mining and plant rental business to pursue its own strategic agenda independent of the capital requirements of the other divisions.

The deal will also see Jannie Serfontein (pictured), Eqstra CEO, take over the role of enX's CEO, while Paul Mansour, enX's incumbent CEO, will become executive deputy chairman of the merged group.