| Tue 14 Jul 2009, 17:10 | | ALM - Alliance - Announcement of a Broad Based BEE transaction and withdrawal of |
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ALM
ALM
ALM - Alliance - Announcement of a Broad Based BEE transaction and withdrawal of
the cautionary announcement
ALLIANCE MINING CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/013402/06)
JSE code: ALM
ISIN: ZAE000104733
("Alliance" or "the "company")
ANNOUNCEMENT OF A BROAD BASED BEE TRANSACTION VIA THE SUBSCRIPTION FOR 40 000
000 (28.3%) ORDINARY SHARES IN ALLIANCE BY DARTINGO TRADING 178 (PROPRIETARY)
LIMITED ("DARTINGO") BY WAY OF A SPECIFIC ISSUE OF ORDINARY SHARES FOR CASH AND
WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the various cautionary announcements issued by
the company and are advised that, an agreement has been entered into
between Alliance and Dartingo in terms of which Dartingo, a special purpose
vehicle incorporated for the sole purpose of subscribing for the Alliance
shares, will subscribe for 40 000 000 Alliance ordinary shares at an issue
price of R3.00 per share by way of a specific issue of shares for cash
("the cash issue"). The cash issue is subject to shareholders` approval as
Dr. NM Phosa (the non-executive Chairman of the company) and Mr. P Maema
(an executive director) are regarded as related parties in terms of the
Listings Requirements of the JSE Limited ("JSE"), being the material
shareholders of Dartingo. The issue price of R3.00 equates to a 12%
discount to the volume weighted average traded price of the company`s
securities measured over the 30 business days prior to the date that the
issue price was agreed between the parties.
2. Rationale for the cash issue
The Alliance directors resolved to raise additional capital and to partner
with a suitable Broad Based BEE company, i.e. the Empowered Investment
Partners, to ensure compliance with the Department of Trade and Industry`s
Code of Good Practice on BEE.
The cash issue will have the following developmental impact:
- Meaningful equity participation by a BEE compliant company in the
mining and mining-related services industry;
- Meaningful equity participation by a Workers Trust; and
- The potential for additional job creation by securing new contracts in
Alliance as a result of the company meeting its empowerment
credentials.
3. Mechanics of the cash issue
The subscription of the Alliance shares for a total cash consideration of
R120 000 000 by Dartingo, funded by the IDC, will be allocated as follows:
Party % of the cash issue
IDC 15.00
Mr P Maema 25.50
Kgato Investments (Pty) Limited 38.25
Little Swift Investments (Pty) Limited 11.25
ALM Workers Trust 10.00
100.00
The allocation to the ALM Workers Trust provides the historically
disadvantaged employees of Alliance with a share in the ownership of
Alliance.
The cash issue shares will rank pari passu in all respects with the
presently issued ordinary shares of the company.
4. Financial effects of the cash issue
The unaudited pro forma financial effects of the cash issue, for which the
directors are responsible, are provided for illustrative purposes only to
show the effect thereof on earnings and headline earnings per share as if
the cash issue had taken effect on 1 March 2008 and on net asset value and
net tangible asset value per share as if the cash issue had taken effect on
28 February 2009. Because of their nature, the unaudited pro forma
financial effects may not give a fair presentation of the company`s
financial position and performance. The unaudited pro forma financial
effects have been compiled from the reviewed results for the year ended 28
February 2009 and are presented in a manner consistent with the format and
accounting policies adopted by Alliance and have been adjusted as described
in the notes below:
Pro forma
Reviewed After the
Before cash issue %
Notes the cash change
issue
Earnings per share (cents) 2 182.66 144.23 (26)
Headline earnings per share 2 182.66 144.23 (26)
(cents)
Net asset value per share 3 366.46 309.35 (18)
(cents)
Tangible net asset value per 251.44 215.83 (16)
share (cents) 3
Weighted average number of 81 598 121 540
shares in issue (`000)
Shares in issue at end of 101 156 141 156
period (`000)
Notes:
1 The "Reviewed Before the cash issue" column information has been
extracted from the company`s reviewed results for the year ended 28
February 2009.
2. The effects relating to earnings and headline earnings per share are
based on the following assumptions and information:
- the cash issue was effective 1 March 2008;
- R120 million was received in terms of the 40 million shares
issued;
- no adjustments have been made to reflect any benefit (income or
interest earned / saved) to be derived from the proceeds of the
share issue, in terms of the "Guide on Pro Forma Financial
Information" issued by the South African Institute of Chartered
Accountants dated September 2005. Management is nevertheless of
the opinion that the proceeds of the shares will be used in a
manner which will be to the benefit of shareholders; and
- the expenses relating to the cash issue are insignificant but
will be written off against share premium.
3. The effects relating to the balance sheet are based on the following
assumptions and information:
- the cash issue was effective 28 February 2009;
- the actual number of shares in issue will increase by 40 million
as a result of the cash issue;
- the share premium account will increase by R119 996 000 as a
result of the cash issue.
4. The funds raised will be extended to companies within the Alliance
group at a rate of 12% per annum to fund their future growth.
5. Conditions precedent
Other than shareholders` approval, there are no conditions precedent to the
cash issue.
6. Circular to shareholders
Subject to JSE approval, a circular to shareholders, including a notice of
a general meeting, will be posted to shareholders within the next 28 days.
7. Withdrawal of cautionary announcement
Pursuant to this announcement, the cautionary announcement is hereby
withdrawn.
JOHANNESBURG
14 July 2009
Designated Adviser
Vunani Corporate Finance
Date: 14/07/2009 17:10:02 Produced by the JSE SENS Department.
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