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EXX04/ EXX05 - Exxaro receives force majeure notification from Eskom
EXXARO RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 2000/011076/06
(“Exxaro”)
Bond Code: EXX04
ISIN Code: ZAG000160326
Bond Code: EXX05
ISIN Code: ZAG000160334
EXXARO RECEIVES FORCE MAJEURE NOTIFICATION FROM ESKOM
Exxaro shareholders are hereby advised that Eskom Holdings SOC Limited (‘Eskom’)
served a subsidiary of Exxaro, Exxaro Coal (Proprietary) Limited, with letters calling
force majeure on the coal supply agreements in place for the supply of coal to the
Medupi and Matimba power stations. As indicated in the letters received, this will be
applicable for the period starting at 16 April 2020 until one month after national
lockdown has been completely lifted. The effect of the letters received by Exxaro, is
that Eskom will not be taking the full contractually agreed tons of coal for the aforesaid
period.
After consultation with its legal advisers Exxaro, is of the view that this event does not
constitute force majeure as stipulated in the coal supply agreements, as the power
stations are still capable of supplying power. Exxaro will vigorously defend its position
in this matter and take the necessary action.
Exxaro is also of the view that this communication from Eskom is not in accordance
with the spirit of the call by President Ramaphosa, requesting businesses to continue
paying contractors.
Exxaro will engage with Eskom to discuss this matter and seek a mutually acceptable
resolution. As Eskom has not indicated the extent of the reduced coal offtake, the
potential impact on Exxaro cannot be quantified until discussions with Eskom have
been finalised.
SE VAN LOGGERENBERG
GROUP COMPANY SECRETARY
21 April 2020
Debt Sponsor
Absa Bank Limited, acting through its Corporate and Investment Banking Division
Date: 21-04-2020 09:09:00
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