| Wed 27 Aug 2008, 17:21 | | JCD - JCI Limited - Mediation process with Randgold & Exploration Company |
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JCD KRHT
JCD
JCD - JCI Limited - Mediation process with Randgold & Exploration Company
Limited ("R&E") further cautionary announcement
JCI LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1894/000854/06
Share code: JCD ISIN: ZAE0000039681 (Suspended)
("JCI")
MEDIATION PROCESS WITH RANDGOLD & EXPLORATION COMPANY LIMITED ("R&E")
FURTHER CAUTIONARY ANNOUNCEMENT
JCI shareholders are referred to previous joint announcements by JCI and R&E
("the companies"), the salient ones of which were dated 15 March 2007, 28
February 2007, 23 April 2007, 22 July 2008 and 19 August 2008. These
announcements related to the mediation process undertaken by the companies in
respect of claims between them arising from alleged mismanagement by the former
boards of the two companies under the late Mr Brett Kebble.
Shareholders are further referred to an announcement released unilaterally on
SENS by R&E on 26 August 2008, the contents of which will be discussed later in
this announcement.
Shareholders are reminded that the companies, on 7 April 2006, agreed to enter
into a mediation agreement ("the Mediation Agreement"), in terms of which they
agreed to cooperate fully and in good faith with each other in investigating
their respective claims and defences and to present their disputed claims to
independent mediators who in turn would make recommendations for a resolution of
the dispute to the shareholders of both companies. The boards of both companies
agreed to present these recommendations, once made, to their respective
shareholders, together with their own views thereon. Should the shareholders of
both companies in general meeting accept the recommendations, they would become
binding. If the mediation were to fail, the companies would enter into an
arbitration phase.
In the joint announcement of 23 April 2007, the companies advised that pursuant
to a recommendation by the mediators, their respective boards had resolved to
propose a merger between the companies ("the merger"). The proposed merger did
not terminate the Mediation Agreement. The companies embarked on a difficult
process to effect the merger, which has to date not been finalised.
Subsequently, on 22 July 2008 the companies announced the signing of a
memorandum of understanding ("MOU") in terms of which they advised their
shareholders that they would endeavour to enter a binding settlement agreement
to provide for a full and final settlement of all claims between the companies
by means of a transfer of assets between them. The announcement stated that
"should the Settlement Agreement become binding on JCI and R&E, the proposed
merger (which has not been aborted at this stage) will not proceed."
The R&E announcement of 26 August 2008 stated that the companies "have not been
able to achieve the settlement agreement as envisaged by the MOU," and that "R&E
and JCI have not been able to execute the proposed merger... and consequently,
the merger having failed, the dispute between the companies will now be referred
to arbitration."
JCI advises its shareholders that the failure to achieve the settlement as
contemplated by the MOU does not preclude JCI and R&E from continuing to
endeavour to achieve a merger between them pursuant to the recommendation of the
mediators as advised in the joint announcement of 23 April 2007. There is no
reason why this process should be aborted or terminated. JCI notes the
announcement of R&E that R&E is of the view that the disputes between the
companies should now be referred to arbitration and JCI will engage with R&E on
these issues.
Accordingly, JCI shareholders are advised to continue to exercise caution in
dealing in their shares (over the counter) until a further announcement is made.
Johannesburg
27 August 2008
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 27/08/2008 17:21:01 Produced by the JSE SENS Department.
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