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MML
MML
MML - Metmar - Acquisition of an interest in a Manganese and Stainless
Steel Alloy Producer
Metmar Limited
(formerly Heritage Collection Holdings Limited)
Incorporated in the Republic of South Africa
(Registration number 1998/007269/06)
Share code: MML & ISIN code: ZAE000078747
("Metmar" or "the Company")
Acquisition of an interest in a manganese and stainless steel alloy
producer
1. Introduction
Metmar is pleased to announce that, on 24 April 2007, an agreement was
signed regarding the acquisition by the Company of a 15.8% interest in
PGR 17 Investments (Pty) Limited ("PGR") ("the acquisition"). PGR is an
investment holding company which is the controlling shareholder in Mogale
Alloys (Pty) Limited ("Mogale Alloys"). The acquisition gives Metmar an
effective 8.9% interest in Mogale Alloys. PGR also has other interests
in chrome ore production.
In terms of the Listings Requirements of the JSE Limited ("JSE"), the
acquisition is classified as a category three transaction. This
announcement is therefore for information purposes only and no action is
required by Metmar shareholders.
2. Details of the acquisition
2.1 The vendor
The vendor of the interest in PGR is the Du Toit Family Trust.
2.2 The purchase consideration
The purchase consideration in respect of the acquisition amounts to R36
million and will be settled in cash. In order to fund the purchase
consideration, Metmar will be raising R35,5 million through the placing
of 10 million Metmar ordinary shares with institutions at an issue price
of R3.55 per share.
2.3 The effective date
The effective date of the acquisition is 1 March 2007.
3. Rationale for the acquisition
Mogale Alloys is an alloy producer situated in Krugersdorp which produces
silico manganese from manganese ore and stainless steel alloy from
chrome, nickel and iron raw materials. Metmar has already developed a
sales/marketing relationship with Mogale Alloys. The acquisition is
therefore in line with Metmar`s stated aim of acquiring strategic
minority shareholdings in order to secure long term marketing income. In
addition, the acquisition supports the opportunity for Kalagadi, a new
manganese ore project in the Kalahari in which Metmar has an interest, to
compete as a future supplier of manganese ore to Mogale Alloys.
4. Pro forma financial effects of the acquisition
The pro forma financial effects of the acquisition, as presented below,
are the responsibility of the board of Metmar and are presented for
illustrative purposes only to provide information on how the acquisition
might have impacted on the reported financial information of the Company
if it had been implemented in the six months ended 31 August 2006.
Because of their nature, the pro forma financial effects may not give a
fair indication of the Company`s financial position at 31 August 2006 or
its future earnings.
Before the After the % change
acquisition acquisition
1 2
Attributable and headline earnings 12.91 12.22 (5.34)
per ordinary share for the six
months ended 31 August 2006
(cents)
Net asset value per ordinary share 41.94 58.83 40.27
at 31 August 2006 (cents)
Net tangible asset value per 38.29 55.38 44.63
ordinary share at 31 August 2006
(cents)
Weighted average number of 175 362 058 185 362 058 5.70
ordinary shares in issue for the
period
Number of ordinary shares in issue 175 362 058 185 362 058 5.70
at the end of the period
Notes:
1. The figures in this column are extracted from the unaudited interim
financial results of the Company for the six months ended 31 August 2006
as released on SENS on 13 November 2006.
2. The figures in this column are based on the figures set out in the
previous column after the implementation of the acquisition. For purposes
of the attributable and headline earnings per ordinary share it was
assumed that the acquisition had been in effect for the six months ended
31 August 2006 and that no income had been received from Mogale Alloys as
it reinvests its profits in the business and makes no distributions. For
purposes of net asset value and net tangible asset value per ordinary
share, it was assumed that the acquisition had been implemented on 31
August 2006.
26 April 2007
Bryanston
Sponsor
BDO QuestCo (Pty) Ltd
Date: 26/04/2007 15:00:01 Produced by the JSE SENS Department.
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