Tuesday, November 24, 2020
Home Finance & Regulations Czech Sev.en Energy acquires stakes in US coal producer Corsa Coal

Czech Sev.en Energy acquires stakes in US coal producer Corsa Coal

Sev.en Energy AG, a major player on the Czech energy market announced that it has acquired 17,1 per cent shares in US-based metallurgical coal producer Corsa Coal Corporation, marking the entry of the Group into the metallurgical coal mining industry.

All of the purchased shares were acquired pursuant to a private transaction for CAD 0.22 dollars per share in cash, for an aggregate amount of CAD 3,6 million dollars, reads the company announcement.

Dentons acted as transaction advisor for Sev.en Energy to conclude the acquisition of shares in Corsa. Dentons has already advised Sev.en Energy on several transactions, including the high profile acquisition of 50 per cent stake in power generation and development company, InterGen NV.

Corsa mines, processes, and sells metallurgical coal from both underground and surface mine operations. The company is specialised on the production of high-quality, low volatile metallurgical coal that has strong coking properties, making it ideally suited for steelmakers.

Sev.en Energy sees potential in the metallurgical coal mining industry, although it is suffering now during the global industrial downturn triggered by the COVID-19 pandemic.

“In the long-term, we expect strong demand from steel making industry driven by urbanisation in emerging markets,” said the Executive Director of Sev.en Energy, Alan Svoboda, who is leading the international expansion of the Group. “This, combined with insufficient investments into developing new mines creates, a supportive environment for metallurgical coal prices in the upcoming years.”

Sev.en Energy owns significant coal and energy production assets in the Czech Republic, the United Kingdom and Australia. Besides, it is the largest private operator of coal mines and conventional power plants in the Czech Republic.

Last year, Sev.en Energy acquired additional power generation assets from Swiss energy group Alpiq AG. The transaction included two Czech coal-fired power plants in Kladno and Zlín with an installed capacity of 588 MWe and 1,342 MWth.

Further to its current portfolio, Sev.en Energy also agreed to take over the Počerady power station, the largest Czech coal-fired energy generating plant with installed capacity 1000 MW from the Czech incumbent electricity producer and distributor, CEZ as.

Company CEO, Luboš Pavlas underlined that Sev.en Energy wants to be “a bridge to the energy of the future”, adding that once the need for coal ends, the company will also discontinue coal use. However, he pointed out that this is not yet feasible in the Czech Republic where renewable sources meet only a fraction of energy demand and new NPPs have not yet been built.

Nevertheless, Sev.en Energy itself is making intensive preparations for a no-coal future and intends to continue to play a major role in the energy market.

“Our primary mission is to ensure that Czech consumers can rely on regular energy supply for affordable prices in the future as well,” emphasised Luboš Pavlas.

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