| Mon 12 Oct 2009, 8:59 | | SNU - Sentula Mining Limited - Rights offer terms conditional sale of a |
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SNU
SNU
SNU - Sentula Mining Limited - Rights offer terms, conditional sale of a
49.998% interest in Koornfontein Coal Mine and further cautionary
announcement
Sentula Mining Limited
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: SNU ISIN: ZAE000107223
("Sentula" or "the Company" )
RIGHTS OFFER TERMS, CONDITIONAL SALE OF A 49.998% INTEREST IN KOORNFONTEIN
COAL MINE AND FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the announcement released on SENS on
Tuesday, 6 October 2009, in which shareholders were advised that
following the breach of the Company`s debt service cover ratio in
December 2008 and in anticipation of the imminent recapitalisation of
the Company, the Company had restructured its senior debt facility of
approximately R1.6 billion with its consortium of financiers ("the
Funding Consortium"), and that the board of directors of Sentula ("the
Board") had made significant progress with the proposed rights offer of
approximately R500 million ("Rights Offer").
2. The possible sale of the Koornfontein Coal Mine interest
Subsequent to the announcement on 6 October 2009, the Board is pleased
to announced that it has accepted a conditional offer from a consortium
comprising Africa Commodities Group (Proprietary) Limited ("ACG") and
Bravura Group ("Bravura") (collectively, "the Consortium") to acquire
Sentula`s 49.998% shareholding in, and shareholder loans and other
claims against, Siyanda Coal (Proprietary) Limited, the company that
operates the Koornfontein Coal Mine ("the Koornfontein Sale") for an
aggregate cash consideration of R686 million ("the Purchase
Consideration").
ACG is a 60% held South African subsidiary of Noble Group Limited
("Noble"), with the remaining 40% held by Altius Investment Holdings
(Proprietary) Limited ("Altius"), a black-owned South African company.
Noble is a Hong Kong based, Singapore listed company with a market
capitalisation of approximately USD6.1 billion. Noble is an integrated
commodities, logistics and supply group, with business interests
including coal mines in Australia, Indonesia and South Africa. Noble`s
distribution network encompasses more than 100 offices in over 40
countries, across 5 continents. Altius is an investment company with
investments in agri-businesses, commodities, technology and private
equity.
Bravura is one of the leading independent equity, debt and advisory
houses in South Africa, with offices in Cape Town and Johannesburg,
Australia, Namibia and Mauritius. Dr Christo Wiese is the main external
shareholder of Bravura.
The Board has considered the terms and conditions of the Koornfontein
Sale and is of the opinion that the Purchase Consideration represents
fair market value for Koornfontein and, on the basis that it is capable
of implementation, is the preferred recapitalisation alternative.
In addition to normal regulatory conditions, the Koornfontein Sale and
Purchase Consideration are conditional on, inter alia, the Consortium
having successfully concluded a due diligence investigation ("Due
Diligence") by no later than 30 October 2009. Should the Consortium
identify any material issues during the Due Diligence, the Consortium
may either amend the Purchase Consideration or, in the event the
adjustment exceeds 10% of the Purchase Consideration, either party may
withdraw from the Koornfontein Sale.
Given Sentula`s obligation to make a payment of R400 million to the
Funding Consortium by 30 November 2009 or incur significant penalties on
its existing debt facility, the Board is cognisant of the risk inherent
in the Due Diligence, the potential adjustments to the Purchase
Consideration and the outstanding conditions to the Koornfontein Sale,
as outlined in paragraph 3 below. To minimise the risk to Sentula, the
Board has elected to secure the underwriting of the Rights Offer on the
terms set out in paragraph 4 below. However, Sentula has until 30
October 2009 to terminate the Rights Offer, by which date the Due
Diligence will have been concluded and other key conditions may have
been fulfilled, which will allow Sentula to assess the implementation
risk of the Koornfontein Sale. At such time Sentula will be in a
position to decide whether to pursue the Koornfontein Sale exclusively,
in addition to the Rights Offer or not at all.
3. Conditions to the possible sale of the Koornfontein Coal Mine interest
In addition to the successful conclusion of the Due Diligence and
barring any meaningful adjustment to the Purchase Consideration by the
Consortium, the Koornfontein Sale remains subject to, inter alia, the
fulfilment or waiver (as applicable) of the following conditions:
3.1. the conclusion of the requisite legal agreements to give effect to the
Koornfontein Sale;
3.2. the approval of the Koornfontein Sale by the Competition Authorities;
3.3. the approval of the Koornfontein Sale by Sentula shareholders
and the Funding Consortium;
3.4. the receipt of irrevocable undertakings from Sentula
shareholders holding no less than 35% of Sentula`s issued share
capital to vote in favour of the Koornfontein Sale; and
3.5. to the extent required, the approval of the Koornfontein
Sale by JSE Limited, Exchange Control Department of the
South African Reserve Bank and any other regulatory bodies.
4. The Rights Offer
Should Sentula not find itself in a position to exclusively pursue the
Koornfontein Sale by 30 October 2009, Sentula will undertake a fully
underwritten renounceable Rights Offer to raise R501 920 340. In terms
of the Rights Offer 350 993 245 new ordinary shares of 1 cent each
("Rights Offer Shares") will be offered to Sentula shareholders at a
subscription price of 143 cents per Rights Offer Share, in the ratio of
149 Rights Offer Shares for every 100 Sentula shares held. The Rights
Offer price represents a 45.5% discount to the 20 day volume weighted
average price as at the close of business on 9 October 2009.
The Rights Offer is subject to the fulfilment of the following
conditions precedent:
- the JSE granting formal approval for the Rights Offer;
- the registration by the Companies and Intellectual Property
Registration Office of all documents required to be registered in terms of
the South African Companies Act (Act 61 of 1973), as amended, for the
implementation of the Rights Offer; and
- the JSE granting a listing of the renounceable (nil paid) letters of
allocation and the Rights Offer Shares to be allotted and issued pursuant
to the Rights Offer.
Sentula has been able to secure an underwriting agreement in terms of
which Investec Bank Limited, acting through its Investec Principal
Investments division ("the Underwriter"), will underwrite the full
Rights Offer. Sentula will pay to the Underwriter a fee of 5% of the
committed R501 920 340, irrespective of whether the Rights Offer is
launched.
The underwriting agreement is subject to the following conditions
precedent:
- Sentula providing the Underwriter with a written notice on or before
12h00 on 30 October 2009 that it wishes to proceed with the Rights Offer;
- the finalisation date of the Rights Offer occurring on or before 6
November 2009; and
- the Underwriter not having given Sentula a cancellation notice, which
cancellation notice shall only be given in the case where the FTSE/JSE
General Mining Index (J154) has fallen by more than 20% from its closing
level on 8 October 2009 and remains below such level over the 2 days
preceding 30 October 2009; the employment of certain senior members of
Sentula having been terminated by the Company; or Sentula has breached the
provisions of the underwriting agreement which are normal for a transaction
of this nature.
5. Further cautionary announcement
Shareholders are advised to continue to exercise caution when dealing in
the Company`s securities until a further announcement is made by Sentula
on or about 30 October 2009, at which stage the shareholders will be
advised whether the Koornfontein Sale or the Rights Offer will proceed.
Johannesburg
12 October 2009
Sponsor:
Merchantec (Proprietary) Limited
Adviser on the Koornfontein Sale:
RFA Consulting (Proprietary) Limited
Corporate adviser:
Investec Bank Limited
Underwriter:
Investec Principal Investments, a division of Investec Bank Limited
Joint Legal advisers:
Werksmans Inc.
Cliffe Dekker Hofmeyr Inc.
Date: 12/10/2009 08:59:01 Produced by the JSE SENS Department.
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