| Thu 25 Jun 2009, 17:52 | | MTX - METOREX LIMITED - Disposal By Metorex Of Its Entire Shareholding In Pan |
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MTX
MEMTX
MTX - METOREX LIMITED - Disposal By Metorex Of Its Entire Shareholding In Pan
African Resources Plc And Further Cautionary Announcement
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
Share code: MTX
ISIN: ZAE000022745
Issuer code: MEMTX
("Metorex" or "the Company")
DISPOSAL BY METOREX OF ITS ENTIRE SHAREHOLDING IN PAN AFRICAN RESOURCES PLC AND
FURTHER CAUTIONARY ANNOUNCEMENT
Metorex Chief Executive Officer, Terence Goodlace said:
"The disposal of our interest in Pan African Resources, which owns and operates
Barberton Mines, forms part of our decisive asset disposal strategy. The gross
proceeds of this disposal amount to R386 million and we will use these proceeds
as part of our process to restore the Metorex balance sheet. We are also
pleased that the BEE Company, Shanduka Gold, participated in the Bookbuild
process and in so doing they will now own 26% of Pan African Resources. Metorex
has been proudly associated with the Barberton Mines over the past six years and
we wish the new Pan African Resources shareholders every success in the future."
1. INTRODUCTION
Shareholders are referred to the announcement by Metorex on 12 December
2008 in which shareholders were advised of the Company`s intention to
dispose of its non-core assets in the short to medium term.
The board of directors of Metorex ("the Board") identified the Company`s
investment in Pan African Resources Plc ("PAR"), comprising 593 740 476
ordinary shares ("the PAR Shares") and constituting approximately 53.4% of
the current issued share capital of PAR, as a non-core asset.
The Board considered various alternatives to unlock value for the Company
from a disposal of the PAR Shares, whilst being cognisant of the positive
impact that an accelerated receipt of the disposal consideration would have
by reducing Metorex`s current debt exposure and other funding requirements.
The Board concluded that the Company`s interests would be best served by
disposing of the PAR Shares in the market in an orderly fashion. The Board
appointed Barnard Jacobs Mellet Corporate Finance (Pty) Limited as sole
bookrunners to conduct a bookbuild exercise on behalf of Metorex with
regard to the PAR Shares ("the Bookbuild") and to dispose of the PAR Shares
via the Bookbuild.
2. OUTCOME OF THE BOOKBUILD
The Board is pleased to announce that the Bookbuild was successfully
concluded at a price of ZAR0.65 per PAR share, resulting in the disposal of
all the PAR Shares, as more fully set out in this announcement.
Metorex will receive gross proceeds amounting to ZAR385 931 309 from the
Bookbuild ("the Disposal Consideration").
3. DISPOSAL OF PAR SHARES TO SHANDUKA AS PART OF THE BOOKBUILD
Metorex is pleased to announce that it has agreed to allow Shanduka Gold
(Proprietary) Limited ("Shanduka Gold") to participate in the Bookbuild and
that Shanduka Gold has agreed to acquire a further 5% of PAR`s enlarged
issued share capital (i.e. following the implementation of Shanduka Gold`s
share exchanged, as more fully set out in PAR`s announcement dated 19 June
2009) from Metorex through the Bookbuild ("the Shanduka Disposal").
Shanduka Gold will acquire 70 417 036 PAR shares from Metorex, subject to
fulfilment of the suspensive conditions set out in paragraph 7 below.
4. BACKGROUND INFORMATION ON METOREX AND PAR
4.1 Metorex
Metorex is an established mid-tier mining group that occupies a unique
position in the southern African mining industry. It specialises in
identifying, developing and profitably managing mining projects. The
Company`s current diversified portfolio includes base-metal, gold and
industrial minerals mines.
4.2 PAR
PAR is an emerging mid-tier gold producer with significant gold
exploration targets. The strategy of the company is to grow a
profitable gold mining business by focusing on projects that are at an
advanced stage of development. It has also recently acquired the
Phoenix platinum project in South Africa. The project involves the
treatment of chrome tailing dumps for PGE extraction with the
potential to produce between 10 to 15koz of 4PGE`s within the near-
term (24 months). The development of this project could result in the
company having a more precious metals focus.
5. RATIONALE FOR THE BOOKBUILD
The rationale for the Bookbuild and the Shanduka Disposal is:
- to enhance Metorex`s liquidity position for the purpose of funding the
Ruashi Project during its build-up phase, which includes the tail-end
of the project capital expenditure; and
- to reduce the bridge loan facility currently outstanding with the
Company`s bankers.
6. SMALL RELATED PARTY TRANSACTION
Mr Cyril Ramaphosa is a director of Barberton Mines (Proprietary) Limited
("Barberton Mines") (a subsidiary of PAR and also of Metorex, prior to
implementation of the Bookbuild).
Shanduka Gold currently owns 26% of Barberton Mines.
Accordingly, the Shanduka Disposal is deemed to be a small related party
transaction in terms of the Listings Requirements of the JSE Limited ("the
JSE").
Metorex has appointed an independent expert to provide an opinion on
whether the Shanduka Disposal is fair to Metorex shareholders.
7. WARRANTIES AND SUSPENSIVE CONDITIONS
The Bookbuild and the Shanduka Disposal are subject to the conditions,
warranties and indemnities associated with transactions of this nature.
The Shanduka Disposal is furthermore subject to the following suspensive
conditions:
- to the extent required, the Securities Regulation Panel ("SRP") ruling
that the Shanduka Disposal is not an "affected transaction" as defined
in the Securities Regulation Code on Take-overs and Mergers and the
Rules of the SRP and that Shanduka Gold shall accordingly not have any
obligation to make a mandatory offer to the shareholders of PAR;
- Metorex delivering to Shanduka written confirmation from the United
Kingdom Panel on Takeovers and Mergers confirming that the provisions
of the City Code on Takeovers and Mergers shall not apply to the
Shanduka Disposal; and
- Metorex obtaining a fairness opinion from an independent expert to the
effect that the terms and conditions of the Shanduka Disposal are fair
to Metorex shareholders.
8. EFFECTIVE DATE
From a Metorex perspective, the Bookbuild is expected to become
unconditional on 1 July 2009. Shareholders will be notified of the
effective date of implementation of the Shanduka Disposal, which will
become effective on the first business day after the date on which the last
of the suspensive conditions have been fulfilled or waived.
9. APPLICATION OF THE DISPOSAL CONSIDERATION
The Disposal Consideration will be used by Metorex to fund the Ruashi
Project during its ongoing build-up phase and towards reducing Metorex`s
third party debt.
10. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects as out below have been prepared
for illustrative purposes only to assist the shareholders of Metorex to
assess the impact of the Bookbuild and Shanduka Disposal on the earnings
per share ("EPS"), diluted earnings per share ("DEPS"), headline earnings
per share ("HEPS"), diluted headline earnings per share ("DHEPS"), net
asset value per share ("NAVPS") and tangible net asset value per share
("TNAVPS") of Metorex had the Bookbuild and Shanduka Disposal occurred on 1
July 2008 for income statement purposes and 31 December 2008 for balance
sheet purposes.
These unaudited pro forma financial effects have been disclosed in terms of
the Listings Requirements of the JSE and because of their nature may not
fairly present Metorex`s financial position, changes in equity, results of
operations or cash flows.
The unaudited pro forma financial effects have not been reviewed or
reported on by the Company`s auditors and are the responsibility of the
directors of Metorex.
Unaudited Pro forma
Notes before the after the Change
Bookbuild Bookbuild (%)
and and the
Shanduka Shanduka
Disposal disposal
EPS (cents) 1 42.09 59.00 40.18
DEPS (cents) 1 41.88 58.70 40.16
HEPS (cents) 1 48.21 38.78 -19.56
DHEPS (cents) 1 47.96 38.58 -19.56
NAVPS (cents) 2 843.61 854.14 1.25
TNAVPS (cents) 2 805.59 852.26 5.79
Weighted average 379,304 379,304 -
number of shares in
issue (000)
Weighted average 381,283 381,283 -
diluted number of
shares in issue (000)
Number of shares in 613,077 613,077 -
issue (000)
Notes:
1. The EPS, DEPS, HEPS , DHEPS, NAVPS and TNAVPS as set out in the
"Unaudited before the Bookbuild and the Shanduka Disposal" column of
the table, are based on Metorex`s consolidated unaudited interim
results as at 31 December 2008 as published on SENS on 3 March 2009.
2. The unaudited pro forma financial effects have been prepared in
accordance with International Financial Reporting Standards and are
consistent with the accounting policies applied by Metorex for the
financial year ended 30 June 2008.
11. CATEGORISATION
In terms of the Listings Requirements of the JSE, the Bookbuild and
Shanduka Disposal are deemed to be Category 2 transactions.
12. TERMINATION OF THE METOREX MANAGEMENT CONTRACT IN RESPECT OF BARBERTON
MINES
Metorex currently has a management contract in respect of Barberton Mines
("the Metorex Contract"). Metorex and PAR are in the process of
negotiating the termination of the Metorex Contract. The termination of
the Metorex Contract will be executed in an orderly fashion and will not
disrupt operations at Barberton Mines.
13. CHANGES TO THE BOARD OF DIRECTORS OF PAR
Mr Charles Needham, representing Metorex, has resigned from the PAR board
of directors with immediate effect. In the interest of effecting a smooth
exit and not to disrupt the affairs of PAR, Mr Maritz Smith, currently the
finance director of PAR and also a Metorex representative, will tender his
resignation as a director of PAR as soon as PAR appoints a new finance
director.
14. FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised that Metorex remains involved in negotiations
which may have a material effect on the price of the Company`s securities.
Accordingly, shareholders should continue to exercise caution when dealing
in their Metorex securities until a further announcement is made.
Rosebank
25 June 2009
Corporate Advisor, Sole Bookrunner and Sponsor to Metorex:
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 25/06/2009 17:52:18 Produced by the JSE SENS Department.
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