Wescoal CEO Waheed Sulaiman resigns
The company has provided no reasons for his exit
Waheed Sulaiman, the Wescoal group CEO who spearheaded the company’s transformation into a majority black-owned coal producer, has resigned.
The company provided no reasons for his exit, announced on the JSE’s stock exchange news service on Monday afternoon, and head of investor relations Jacques de Bie said an agreement between Sulaiman and Wescoal is in place and bound by strict confidentiality.
Sulaiman was appointed acting CEO of Wescoal in April 2015 after Andre Bojé, who had been at the helm for 18 years, resigned. Bojé’s exit followed a widely publicised fallout with board chair Robinson Ramaite over how the company could best achieve a black shareholding of more than 50%.
At the time, coal producers were under the impression that a majority black shareholding was required in order to supply coal to Eskom. But in recent months this has been shown to be incorrect and was, in fact, never an official Eskom policy despite previous communications put out by the utility.
Sulaiman had been part of the push for a +50% black ownership consolidation, said Hurbey Geldenhuys, head of research at Vunani Securities.
“Now it seems it was never Eskom policy, so the strategy is a bit up in the air,” he said.
The company, which sells half of its coal production to Eskom, has been executing a long-term growth strategy to dispose of noncore assets and pursue value-enhancing opportunities.
Under Sulaiman’s leadership the company performance improved and shareholders benefited from strong cash flows
However, the share remains undervalued. “The company share has not performed to expectations,” said Geldenhuys. “It’s a bit of a value trap, it seems.”
In October the company announced it had joined a consortium, led by private equity firm Ata Resources Coal Investments, to acquire Australian-listed Universal Coal. Universal Coal supplies Eskom and the export market and fits with a Wescoal strategy to increase revenue streams and diversify its asset base. Negotiations to conclude the detailed transaction agreements are still in progress, the company advised shareholders on Thursday.
Sulaiman’s resignation is effective from January 31. The board confirmed mining doyen Humphrey Mathe, a director at Wescoal since 2013, will act as CEO until a suitable candidate is appointed. A recruitment process is under way.
“The board is appreciative of Waheed’s commitment and wishes him the best in his future endeavours,” the company statement said.
Shareholders and the market will be updated as soon as it is appropriate to do so after January 31, De Bie said.