Danakali (ASX:DNK) has executed a binding share sale agreement (SSA) with Sichuan Road and Bridge Group Co (SRBG).
The binding SSA was executed for the sale of Danakali’s 50% shareholding in Colluli Mining Share Company (CMSC) to Sichuan Road and Bridge Group Co for a total consideration of US$166 million pre-tax in upfront cash and deferred payments.
Pursuant to the SSA, SRBG has agreed to purchase 100% of the shares held by Danakali’s wholly owned subsidiary company STB Eritrea (STB) in CMSC and the outstanding amount owed by CMSC to STB pursuant to the terms of the shareholders agreement between ENAMCO and STB.
It is reported payment of the full US$166 million will be completed in 2 separate transactions for US$135 million and US$31 million (subject to an adjustment for deferred payment) respectively, will be net of all government taxes, and means Danakali will receive about US$121 million.
The company says key conditions precedent to completion of the transaction include company shareholder approval, ENAMCO and Eritrean Government Ministry approval, and Chinese regulatory approvals being obtained by SRBG.
In addition, subject to shareholder approval and following completion of the transaction, Danakali plans to distribute about 90% of the net proceeds to its shareholders, and continue as a listed company to identify new projects, and potential new alternative growth opportunities.
With the binding SSA between Danakali and SRBG now executed, the company announces both parties aim to complete the transaction in the second quarter of 2023.