Boart Longyear's underground screwfeed diamond drilling business in South Africa will be sold into Calulo Drilling in an empowerment transaction that involves the transfer of assets, skills and technology. Initially Calulo Investments will hold 51%, making it a majority-owned, empowered stakeholder in the new drilling venture, while Boart Longyear and Anglo Zimele, Anglo American's business development and empowerment initiative, will hold 39% and 10% respectively.
Calulo Drilling, with an annual turnover of R60 million, employs 600 people. The transaction is subject to the approval of the domestic Competition Commission.
"This is a natural extension of our maturing service business," said Mpho Diale, managing director of Calulo Investments and new chairman of Calulo Drilling.
"It gives us a base into mining services and procurement arena from which we'll be looking at adding other products and services. The structure augments well with our philosophy of operational involvement and driving of our investments."
Paul Brunner, Boart Longyear chief executive officer, said formation of the new entity was a move aimed at "sharing Boart Longyear's drilling expertise to actively support South Africa's black empowerment initiatives".
"This joint venture must add shareholder value and widen the door to future empowerment opportunities. The success of Calulo Drilling is non-negotiable."
It is Boart Longyear's intention to reduce its shareholding to 26% in Calulo Drilling within two year while Anglo Zimele will sell its shares to Calulo Investments within a similar period, in line with a clear exit strategy underpinned by a philosophy of "independence through enterprise".
"We are delighted to see another empowerment venture come to fruition – the fourth for this year," said Anglo Zimele chairman Godfrey Gomwe.
"It is our hope that Calulo Drilling will base its growth and success on participation, engagement and trust, and that the team will be a shining example to other entrepreneurs."
Headquartered in South Africa, Boart Longyear is a global organisation and a member of the Anglo American group. It has more than 40 operating subsidiaries and employs about 6000 people.
Calulo Investments is an investment holding company with core focus in the petro-chemical sector, energy and other resources.
