| Mon 23 Apr 2007, 17:20 | | RNG/JCD - R&E/JCI - Joint announcement by R&E And |
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JCD RNG KRHT
JCD RNG
RNG/JCD - R&E/JCI - Joint announcement by R&E And JCI(Collectively "The
Companies" or "Both Companies")
Randgold & EXPLORATION COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1992/005642/06)
Share code: RNG & ISIN: ZAE000008819 (Suspended)
ADR Ticker symbol: RNG
Nasdaq trading symbol: RANGY (Delisted)
("R&E")
JCI LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1984/00854/06
Share code: JCD & ISIN: ZAE0000039681 (Suspended)
("JCI")
JOINT ANNOUNCEMENT BY R&E AND JCI
(COLLECTIVELY "THE COMPANIES" or "BOTH COMPANIES")
A PROPOSAL FOR THE MERGER OF THE COMPANIES
AND
FURTHER RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. Background
R&E and JCI shareholders are referred to the joint cautionary announcement
published on 15 March 2007 wherein shareholders of both companies were
advised that negotiations regarding a possible settlement between the
companies were in progress.
Shareholders are reminded that on 28th February 2007, the Mediators issued
an interim recommendation, in terms whereof they embraced the notion of a
merger and indicated to both R & E and JCI that "....it is recommended that
an overall settlement be pursued on the basis of a merger between the two
companies ".
Pursuant to such recommendation the boards of R&E and JCI have each
resolved to propose a merger of the companies ("the proposal") and to
recommend such merger to their respective shareholders. They are currently
in negotiations with each other in order to settle the terms of the
proposal.
The purpose of this announcement is to update shareholders and to advise
them of the process that will be required to bring the proposal into
effect.
2. Proposed scheme of arrangement
The merger contemplated by the proposal ("the merger") will be effected by
way of a scheme of arrangement ("the scheme") in terms of Section 311 of
the Companies Act, 1973, as amended, ("Companies Act") between JCI and its
shareholders other than JCI subsidiaries and R&E. R&E will be the proposer
of the scheme. If acceptable to the shareholders of R&E and JCI, and
subject to satisfaction of the conditions set out in paragraph 4 below and
any others that may be proposed, JCI shareholders will be required to
exchange their shares in JCI for shares in R&E, thereby effectively merging
the two companies. The proposed exchange ratio, ("the exchange ratio")
which has been approved by both companies` boards of directors, is 1 R&E
share for every 95 JCI shares in issue.
If the merger is successfully concluded, R&E shareholders and JCI
shareholders will, respectively own approximately 78% and 22% of the post
merger R&E share capital and JCI will become a wholly owned subsidiary of
R&E.
3. Applications for rulings from the Securities Regulation Panel (" SRP")
and the JSE Limited ("JSE")
Shareholders are further advised that JCI and R&E are currently unable,
given the circumstances previously announced, to fulfil certain of the
published requirements of, respectively the JSE and the SRP including the
disclosure of audited financial information and certain other information
relating to events that occurred prior to the reconstitution of both
company`s Boards of directors in August 2005. The Boards of both companies
and their advisers have made preliminary approaches to and intend to make
application to the JSE and SRP to obtain rulings relating to the
appropriate disclosures to be made and other requirements to be fulfilled
within the companies` current abilities, including the obtaining of
opinions from independent experts regarding the proposal. The boards of
both companies advise that nothing contained in this announcement may be
taken as a representation that the companies will be able to fulfil the
requirements of the JSE and SRP.
4. Applicable conditions
There are a number of conditions to be satisfied before the scheme can
become effective. These include but are not limited to:
- Agreement between the boards of both companies being reached on the
detailed terms of the proposal and the relevant documentation;
- The approval of the relevant regulatory authorities, including those
of the JSE, the SRP, the SA Reserve Bank, and the Competition
Authorities ;
- The Supreme Court of South Africa ("Court") ordering that a meeting of
shareholders of JCI be convened in order to consider and, if thought
fit, to approve the scheme ("scheme meeting");
- Approval of the scheme by the requisite majority of JCI shareholders
at the scheme meeting;
- Passing of the requisite resolutions by R&E shareholders that are
required to implement the proposal;
- Court sanction of the scheme, and
- Registration by the Registrar of Companies of the Court Order
sanctioning the scheme and of the applicable special resolutions to be
passed by R&E shareholders.
5. Mediation
The companies continue to be bound by the terms and conditions of the
Mediation Agreement concluded by them on 7 April 2006.
Nothing contained in this announcement is to be construed as a waiver by
R&E or JCI of of any of their rights , all of which will remain in force
and unaffected by the merger.
6. Financial information and further announcements
Subject to obtaining favourable rulings as contemplated in 3 above,
financial information, including a computation of the respective unaudited
unreviewed net asset values of both companies and the pro forma financial
effects of the proposal will be published once it is available.
Once the relevant approvals have been received, announcements will be made
giving the salient dates pertaining to the proposal.
Documents relating to the proposed merger will be sent to shareholders in
due course, if the High Court of South Africa orders the convening of the
scheme meeting. Such documents will contain more details of the claims and
assets and liabilities of the companies.
7. Renewal of cautionary announcement to JCI and R&E shareholders
Until the publication of further information as set out above, shareholders
in both companies are advised to continue to exercise caution in trading
their shares over-the-counter until the proposal is finalised.
FORWARD-LOOKING STATEMENT DISCLAIMER FOR R&E
Certain statements in this announcement, as well as oral statements that
may be made by R&E`s officers, directors or employees acting on its behalf
relating to such information, contain "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of 1995,
specifically Section 27A of the U.S. Securities Act of 1933 and Section 21E
of the U.S. Securities Exchange Act of 1934. All statements, other than
statements of historical facts, are "forward-looking statements". These
include, without limitation, those statements concerning the value of the
net assets of R&E and JCI; the ability of the companies to successfully
consummate a merger that is approved by the shareholders and is acceptable
to the necessary governmental authorities, the fraud and misappropriation
that are alleged to have occurred and the time periods affected thereby;
the ability of R&E to recover any misappropriated assets and investments;
the outcome of any proceedings on behalf of, or against R&E; R&E`s ability
to complete its forensic investigation and prepare audited financial
statements; the time period for completing its forensic investigation and
audited financial statements; the amount of any claims R&E is or is not
able to recover against others, including JCI, and the success of its
mediation with JCI; the likelihood and economic parameters of any merger
arrangement between JCI and R&E; the estimated valuations given to assets
and liabilities in the NAV statement; and the ultimate impact on R&E`s
previously released financial statements and results, assets and
investments, including with respect to Randgold Resources Limited,
business, operations, economic performance, financial condition, outlook
and trading markets. Although R&E believes that the expectations reflected
in such forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to be correct, particularly in
light of the extent of the alleged frauds and misappropriations uncovered
to date. Actual results could differ materially from those implied by or
set out in the forward-looking statements.
Among other factors, these include the inherent difficulties and
uncertainties in ascertaining the values of the net assets of the
companies, particularly in light of the absence of any independent
valuations, the existence of any unknown liabilities, the willingness of
any governmental authority to sanction any merger in light of the absence
of independent valuations or otherwise; the extent, magnitude and scope of
any fraud and misappropriation that may be ultimately determined to have
occurred and the time periods and facts related thereto following the
completion of the forensic investigation and any other investigations that
may be commenced and the ultimate outcome of such forensic investigation;
the ability of R&E to successfully assert any claims it may have against
other parties for fraud or misappropriation of R&E assets or otherwise and
the solvency of any such parties, including JCI; the determinations of the
mediators and acceptance of any such determinations by the shareholders of
R&E and JCI; the ability of R&E to defend successfully any counterclaims or
proceedings against it; the ability of R&E and its forensic investigators
to obtain the necessary information with respect to R&E`s transactions,
assets, investments, subsidiaries and associated entities to complete the
forensic investigation and prepare audited financial statements; the
willingness and ability of R&E`s forensic investigators and auditors to
issue any final opinions with respect thereto; the ability of R&E to
implement improved systems and to correct its late reporting; the JSE
Limited`s willingness to lift its suspension of the trading of R&E`s
securities on that exchange; changes in economic and market conditions;
fluctuations in commodity prices and exchange rates; the success of any
business and operating initiatives, including any mining rights; changes in
the regulatory environment and other government actions; business and
operational risk management; other matters not yet known to R&E or not
currently considered material by R&E; and the risks identified in Item 3 of
R&E`s most recent annual report on Form 20-F filed with the SEC and its
other filings and submissions with the SEC.
All forward-looking statements attributable to R&E, or persons acting on
its behalf, are qualified in their entirety by these cautionary statements.
R&E expressly disclaims any obligation to release publicly any update or
revisions to any forward-looking statements to reflect any changes in
expectations, or any change in events or circumstances on which those
statements are based, unless otherwise required by law.
Johannesburg
23 April 2007
Sponsor to R&E and JCI
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 23/04/2007 16:33:31 Produced by the JSE SENS Department.
