| Thu 28 Jan 2010, 16:55 | | RNG / JCD - Randgold & Exploration Company / Jci - |
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JCD RNG KRHT
JCD RNG
RNG / JCD - Randgold & Exploration Company /Jci - Detailed
Announcement and renewal of cautionary announcement
RANDGOLD & EXPLORATION COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1992/005642/06)
Share code: RNG
ISIN: ZAE000008819 (Suspended)
ADR Ticker symbol: RNG
Nasdaq trading symbol: RANGY (Delisted)
("R&E")
JCI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1894/00854/06)
Share code: JCD
ISIN: ZAE0000039681 (Suspended)
("JCI")
DETAILED ANNOUNCEMENT TO R&E AND JCI SHAREHOLDERS IN RESPECT OF
PROPOSED SETTLEMENT BETWEEN R&E AND JCI, THE LITIGATION SETTLEMENT
AGREEMENT AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
R&E and JCI shareholders are referred to the SENS announcement
of 21 January 2010, wherein shareholders were advised that JCI,
JCI Investment Finance (Pty) Limited ("JCIIF") and R&E
(hereinafter collectively referred to as "the parties") had
signed a revised settlement agreement ("the revised Settlement
Agreement"), following the lapsing of the settlement agreement
concluded between the parties initially on 31 August 2009 and
again on 18 September 2009 ("the prior settlement agreements"),
the terms of which were previously communicated to R&E and JCI
shareholders.
Shareholders of JCI and R&E were further informed in the
aforementioned announcement that a Litigation Settlement
Agreement between the parties, Letseng Diamonds Limited
("Letseng"), Hawkhurst Investments Limited ("Hawkhurst"),
Investec Bank Limited ("Investec"), Investec Bank Plc
("Investec Plc") and certain other parties was also concluded
on or around 20 January 2010 ("the Litigation Settlement
Agreement"), the salient details whereof are set out in
paragraph 3 below.
2. THE REVISED SETTLEMENT AGREEMENT
2.1 RATIONALE
R&E and JCI shareholders are referred to, inter alia, prior
announcements and shareholder updates regarding the disputes
between R&E and JCI, the proposed merger between R&E and JCI
and the failure thereof, and the conclusion and lapsing of the
prior settlement agreements between R&E and JCI.
Strategies endeavouring to conclude a settlement of the legal
dispute between R&E and JCI were embarked upon by the boards of
both R&E and JCI as an alternative to costly and time consuming
litigation. In keeping with such strategies the parties have
again, for commercial reasons concluded the revised Settlement
Agreement.
Subject to the fulfillment of the suspensive conditions to the
revised Settlement Agreement set out below, the implementation
of the revised Settlement Agreement will as between the R&E
group and the JCI group only and certain directors and officers
thereof, result in the JCI group and such directors and
officers being discharged from the R&E group`s claims against
the JCI group and such directors and officers, and vice versa,
this, without the parties making any admissions of liability or
any concessions in regard to their respective claims.
2.2 SALIENT TERMS OF THE REVISED SETTLEMENT AGREEMENT
In terms of the revised Settlement Agreement, subject to the
fulfillment of the suspensive conditions to the revised
Settlement Agreement and the implementation thereof:
2.2.1 JCI and JCIIF will cause 6 051 632 (six million fifty one
thousand six hundred and thirty two) shares in Gold Fields
Limited ("the GFL shares") to be transferred to R&E;
2.2.2 JCI will allot and issue 1 555 710 220 (one billion five
hundred and fifty five million seven hundred and ten
thousand two hundred and twenty) new ordinary shares in
JCI ("the new JCI shares") to R&E, representing
approximately 44% of the issued share capital of JCI post
the issue of such new JCI shares; and
2.2.3 R&E will, following the transfer of the GFL shares to R&E
and the allotment of the new JCI shares to it, firstly
make a capital distribution of such GFL shares to R&E
shareholders and immediately following the distribution
thereof, unbundle the new JCI shares to the R&E
shareholders, both in proportion to such R&E shareholders`
respective shareholdings.
In addition, whilst not obliged to do so in terms of the
revised Settlement Agreement, R&E intends after the revised
Settlement Agreement is concluded, as part of an unbundling
process, to unbundle its existing shares in JCI, comprising 305
186 049 ordinary shares, to the R&E shareholders in proportion
to their respective shareholdings.
2.3 EFFECTIVE DATE
The effective date of the revised Settlement Agreement is the
date on which the last of the GFL shares and the new JCI shares
are registered in the Central Securities Depository Participant
("CSDP") account of R&E following fulfillment of the suspensive
conditions of the revised Settlement Agreement, being a date
not more than 16 (sixteen) business days after the fulfillment
of such suspensive conditions, whichever is the first occurring
("the Effective date").
2.4 SUSPENSIVE CONDITIONS
The revised Settlement Agreement is subject to the fulfillment
of the following remaining suspensive conditions:
2.4.1 within 30 (thirty) calendar days of the Signature Date,
such date being 20 January 2010, or such later date as the parties
may agree to in writing:
2.4.1.1 the parties shall have obtained a ruling from the
Securities Regulation Panel ("SRP") specifying that in the view of
the SRP, the transaction contemplated in the revised Settlement
Agreement is not an affected transaction within the meaning of
section 440(A)(1) of the Companies Act, No. 61 of 1973, as amended
("the Companies Act"), alternatively, the SRP determines that the
transaction contemplated in the revised Settlement Agreement is an
affected transaction within the meaning of section 440 (A) (1) of
the Companies Act, to which the SRP imposes conditions which are
acceptable to the parties, or the SRP waives the applicability of
the rules in relation to section 440 (A)(1)of the Companies Act
and
the parties (in either of the latter events only) inform each
other
in writing that they wish to proceed with the revised Settlement
Agreement;
2.4.1.2 the parties shall have procured an irrevocable undertaking
from Investec on the terms of the irrevocable undertakings
attached
to the revised Settlement Agreement, in which Investec undertake
to
vote in favour of the resolutions to be passed by the R&E
shareholders and the JCI shareholders at the R&E general meeting
and
the JCI general meeting respectively, in order to give effect to
the
implementation of the revised Settlement Agreement (hereinafter
collectively referred to as "the resolutions");
2.4.1.3 the parties shall have procured an irrevocable undertaking
from Allan Gray Limited ("Allan Gray") on the terms of the
irrevocable undertakings attached to the revised Settlement
Agreement, in which Allan Gray undertakes to vote in favour of the
resolutions in respect of the shares in which it exercises the
voting rights, and to recommend to its clients to vote in favour
of
the resolutions in respect of the shares in which its clients
exercise the voting rights;
2.4.1.4 JCI and JCIIF will have furnished Computershare Investor
Services (Proprietary) Limited ("Computershare"), as their
nominated
CSDP (who shall hold the GFL shares as contemplated in the revised
Settlement Agreement), with an irrevocable written instruction, on
the terms of the irrevocable instruction attached to the revised
Settlement Agreement, to deal with the GFL shares as specified
therein and to furnish a copy of such instruction to R&E;
2.4.2 within 60(sixty)calendar days of the Signature Date, or
such later date as the parties may agree to in writing:
2.4.2.1 JCI and JCIIF will have procured an irrevocable written
confirmation from Investec on terms acceptable to the parties,
confirming that Investec shall release from any security held by
it
in respect of any obligation owed to it by JCI and/or JCIIF
whether
directly or indirectly the GFL shares, in order to facilitate the
transfer of the GFL shares to the CSDP account of R&E as envisaged
in the revised Settlement Agreement, free of any withholding or
claim by Investec thereto whatsoever;
2.4.2.2 Investec shall have released all and any assets encumbered
under the Security documents, as defined in the revised Settlement
Agreement, after settlement of the Investec Raising Fee, as also
defined in the revised Settlement Agreement, to JCIIF;
2.4.3 within 90 (ninety) days of the Signature Date, or such
later date as the parties may agree to in writing, the
shareholders
of JCI in general meeting will have adopted the appropriate
resolutions, approving of and ratifying the conclusion and
implementation of the revised Settlement Agreement, including but
not limited to the passing of:
2.4.3.1 a special resolution to increase the authorised share
capital of JCI from R27 000 000 (twenty seven million rand)
divided
into 2 700 000 000 (two billion seven hundred million) JCI shares,
to R38 000 000 (thirty eight million rand), divided into 3 800 000
000 (three billion, eight hundred million) JCI shares, through the
creation of 1 100 000 000 (one billion one hundred million)
additional JCI shares (which shall include the new JCI shares) in
the authorised share capital of JCI, such additional JCI shares to
rank pari passu in every respect with the existing JCI shares
(save
that in respect of the new JCI shares only, the voting rights
attaching thereto shall be suspended until 48 (forty eight) hours
after the distribution thereof to the R&E shareholders as
envisaged
in the revised Settlement Agreement) and amending the Memorandum
of
Association of JCI, if necessary, it being acknowledged that
nothing
contained in the revised Settlement Agreement shall prohibit JCI
from legally issuing JCI shares at any time after the Effective
date;
2.4.3.2 the requisite resolution ratifying the transfer of the GFL
shares by JCI to JCIIF in August 2005;
2.4.3.3 the requisite resolution approving of the transfer of the
GFL shares to R&E;
2.4.3.4 the requisite resolution approving of the issue of the new
JCI shares to R&E;
2.4.3.5 the requisite resolution providing that in the event of
the new JCI shares being issued to R&E and the revised Settlement
Agreement failing for any reason whatsoever and the new JCI shares
being required to be returned to JCI and a court not sanctioning
the
cancellation thereof (following an application being made to it
therefore), that in such event, JCI buys back the new JCI shares
from R&E at a purchase price of R1.00 (such new JCI shares being
deemed by the parties to have been issued and allotted for no
consideration and to be void ab initio);
2.4.4 within 90 (ninety) calendar days of the Signature Date,
or such later date as the parties may agree to in writing:
2.4.4.1 the R&E shareholders in general meeting will have adopted
the appropriate resolutions (including and to the extent necessary,
in terms of section 228 of the Companies Act), approving and
ratifying the conclusion and implementation of the revised
Settlement Agreement, including such authority and consent as may
be
required from the R&E shareholders in order to give effect to the
GFL shares being transferred to R&E and the new JCI shares to be
issued to R&E, being distributed as soon as possible to the R&E
shareholders in accordance with the unbundling provisions of
section
46 of the Income Tax Act no.58 of 1962, as amended;
2.4.4.2 R&E will have furnished to Computershare, as its nominated
CSDP (who shall receive the GFL shares and the new JCI shares as
contemplated in the revised Settlement Agreement), an irrevocable
written instruction, on the terms of the irrevocable instruction
attached to the revised Settlement Agreement, to deal with the said
shares as specified therein;
2.4.5 within 120 (one hundred and twenty) calendar days of the
Signature Date, or such later date as the parties may agree to in
writing:
2.4.5.1 the parties will have received the unconditional written
consent of the Competition authorities, in terms of Chapter 3 of
the
Competition Act, to conclude the transaction contemplated in the
revised Settlement Agreement;
2.4.5.2 the special resolution referred to in paragraph 2.4.3.1
above will have been registered at the Registrar of Companies; and
2.4.5.3 the JSE Limited ("JSE") will have approved of the issue of
the new JCI shares to R&E and/or have imposed conditions which are
acceptable to the parties.
The suspensive conditions of the revised Settlement Agreement are
for the benefit of R&E and JCI, either of whom shall on prior
written notice to the other, be entitled to extend the date for
the fulfillment of the conditions for a period not exceeding 20
(twenty) business days, provided that such notice is given prior
to the expiration of the date for the fulfillment of the relevant
suspensive condition in respect of which an extension is sought.
2.5 OTHER SALIENT TERMS
2.5.1 If any dividends are declared by Gold Fields Limited in
respect of the GFL shares in the period between the Signature Date
and the date that the revised Settlement Agreement is implemented,
such dividends shall, if the revised Settlement Agreement is
implemented, be for the benefit of R&E. If the revised Settlement
Agreement is not implemented, such dividends shall be for the
benefit of JCI.
2.5.2 For a period of 120 (one hundred and twenty) calendar days
calculated from the Effective date, R&E and JCI will disclose each
to the other and on behalf of their group companies, all forensic
reports furnished to each of them by their forensic investigators,
all accounting records and bank account statements of each other and
all trading account statements in respect of the operation of any
trading account(s) held by them and their respective group companies
pertaining to all periods prior to the Effective date, which may be
used solely for the purposes of enabling each of them and their
respective group companies to complete outstanding financial
statements (including any re-statement thereof), to determine
whether they enjoy any claim against any third party and to permit
for the evaluation and/or prosecution and/or institution of such
claims against third parties where deemed appropriate and in order
to enable each of them to comply with taxation and other reporting
requirements.
2.5.3 Each of R&E and JCI will co-operate and use their
reasonable commercial endeavours to assist one another in terms of
the revised Settlement Agreement in order to enable each of them to
pursue claims which either of them or their respective group
companies may enjoy against third parties.
The full and further material terms and conditions of the
revised Settlement Agreement will be detailed in the
circulars which will be furnished to shareholders as set
out in paragraph 4 below. This announcement is not intended
to detail all of the terms of the revised Settlement
Agreement nor to be an exhaustive summary thereof.
3. THE LITIGATION SETTLEMENT AGREEMENT
3.1 RATIONALE
The parties to the Litigation Settlement Agreement are
Letseng, JCI, R&E, Investec, Investec Plc, JCIIF, Hawkhurst,
Discus Limited ("Discus"), Global Management Overseas
Limited ("Global"), Latitude Investments Limited
("Latitude"), African Strategic Investment (Holdings)
Limited ("Holdings") and the Azalia Trust ("Azalia").
Certain legal proceedings in relation to various legal
disputes, which legal disputes are more fully defined in the
Litigation Settlement Agreement, have been instituted
amongst certain of the parties to the Litigation Settlement
Agreement ("the Litigation Disputes").
Subject to the suspensive conditions to the Litigation
Settlement Agreement (which are detailed in 3.5 hereof) the
parties for commercial reasons and in order to avoid costly
litigation have agreed, without making any admissions or
concessions as to liability, to resolve the Litigation
Disputes on the basis set out in the Litigation Settlement
Agreement.
The provisions of the Litigation Settlement Agreement and
the payments to be made in terms thereof shall constitute a
full and final settlement of the Litigation Disputes insofar
as the parties to the Litigation Settlement Agreement are
concerned.
The Litigation Settlement Agreement is independent of the
revised Settlement Agreement.
3.2 SALIENT TERMS OF THE LITIGATION SETTLEMENT AGREEMENT
On the effective date of the Litigation Settlement
Agreement:
3.2.1 each of the parties will to the extent within their power,
take all steps to withdraw and terminate each of the designated
actions which actions are defined in the Litigation Settlement
Agreement (including the lifting of the interdict by Letseng which
forms part of an application between inter alia Letseng, Investec
and JCI in the South Gauteng High Court (Johannesburg));
3.2.2 Letseng shall transfer 42 000 (forty two thousand)
ordinary shares in the capital of Randgold Resources Limited ("the
RGR Shares") to R&E;
3.2.3 JCI shall pay an amount of R267 500 000 to Investec ("the
Loan Settlement Fee") in settlement of any disputes pertaining to
the payment of a Raising Fee in terms of a loan agreement concluded
between JCI and Investec in August 2005, as amended from time to
time ("the Loan Agreement"). Alternatively, Investec shall allow
certain of the assets encumbered to it as security in terms of the
Loan Agreement to be released for the sole purpose of those assets
being realised and the realisation proceeds being applied in
settlement of the Loan Settlement Fee. Immediately following
payment of the Loan Settlement Fee to Investec, Investec shall
release to JCIIF all assets encumbered and/or held by them in terms
of the Loan Agreement. Should the Loan Settlement Fee, or any part
thereof, not be paid to Investec on the effective date of the
Litigation Settlement Agreement, interest shall accrue on the Loan
Settlement Fee, or any balance thereof that remains owing, at the
SAFEX Call Rate from the Effective date to the date of payment
thereof (both days inclusive);
3.3 If all of the suspensive conditions to the Litigation
Settlement Agreement have been fulfilled or waived (other than the
suspensive condition (unless waived) referred to in 3.5.3 of this
announcement) JCI will by no later than 14 (fourteen) business days
prior to the date of the meeting referred to in 3.5.3 and subject to
compliance with certain other provisions of the Litigation
Settlement Agreement, pay an amount of R40 000 000 to Letseng ("the
Letseng Indemnity Costs") into a bank account nominated by Letseng,
which will, subject to further provisions of the Litigation
Settlement Agreement become available to Letseng.
3.4 THE EFFECTIVE DATE
The effective date of the Litigation Settlement Agreement is
the first business day immediately following the fulfillment
of the last of the suspensive conditions referred to in
paragraph 3.5 below.
3.5 SUSPENSIVE CONDITIONS
The Litigation Settlement Agreement is subject to the
fulfillment of the following suspensive conditions:
3.5.1 within 45 (forty five) calendar days of the date of
signature of the Litigation Settlement Agreement, being 22 January
2010 ("the Signature Date of the Litigation Settlement Agreement")
or such extended date as determined by Letseng on written notice to
the other parties (provided that such extended period shall not be
longer than 30 (thirty) calendar days), the Exchange Control
Department of the South African Reserve Bank approves the
transactions contemplated in the Litigation Settlement Agreement;
3.5.2 within 15 (fifteen) calendar days of the Signature Date of
the Litigation Settlement Agreement or such later date as determined
by Investec on written notice to the other parties, 75% of the
shareholders of JCI who are entitled to vote at the relevant meeting
of such shareholders provide Investec with irrevocable undertakings
to vote in favour of the resolution which is to be passed by the
shareholders of JCI authorising the payment of the Loan Settlement
Fee to Investec as well as the payment of any interest payable
thereon ("the JCI Resolution"). (For the purposes of determining
whether the aforesaid 75% threshold is met, the irrevocable
undertakings of Hawkhurst and Letseng to vote their shares held in
JCI in favour of the JCI Resolution on the terms set out in the
Litigation Settlement Agreement, will be taken into account.
Investec shall be entitled in its sole and absolute discretion to
waive compliance with this suspensive condition on written notice to
the other parties);
3.5.3 within 45 (forty five) calendar days of the Signature Date
of the Litigation Settlement Agreement or such extended date as
agreed in writing by the parties, the shareholders of JCI:
3.5.3.1 approve the JCI Resolution with the requisite majority;
and
3.5.3.2 approve the payment of the Letseng Indemnity Costs to the
extent payable by JCI;
3.5.4 within 15 (fifteen) calendar days of the Signature Date of
the Litigation Settlement Agreement or such extended date as agreed
in writing between the parties, R&E, in its capacity as the largest
creditor of BNC Investments (Proprietary) Limited (in
liquidation)("BNC") procures that BNC signs the waiver attached to
the Litigation Settlement Agreement waiving any and all claims
actions, proceedings and/or enquiries of BNC against Hawkhurst and
undertakes not to institute, at any point in the future, any claims,
actions proceedings and/or enquiries on behalf of BNC against each
of Letseng, Global, Discus, Latitude, Azalia and/or Hawkhurst, the
cause of action of which arose before the Signature Date of the
Litigation Settlement Agreement, or in circumstances which arise
after the Signature Date of the Litigation Settlement Agreement in
respect of transactions, dealings, conduct and/or acts or omissions
which arose prior to the Signature Date of the Litigation Settlement
Agreement.
The suspensive conditions set out in paragraph 3.5.3 and
3.5.4 above may be waived by written agreement between the
parties.
3.6 OTHER TERMS OF THE LITIGATION SETTLEMENT AGREEMENT
3.6.1 The other terms of the Litigation Settlement Agreement are
set out therein.
3.6.2 This announcement is not intended to detail all of the
terms of the Litigation Settlement Agreement nor to be an exhaustive
summary thereof.
4. DOCUMENTATION TO SHAREHOLDERS AND REGULATORY APPROVALS
The terms of both the revised Settlement Agreement and the
Litigation Settlement Agreement will be detailed in circulars
that will be furnished to the shareholders of R&E and JCI in
due course. The revised Settlement Agreement will be subject to
the necessary regulatory approvals being obtained from the JSE,
the SRP and the Competition Commission, to the extent
applicable.
The requisite approvals will be sought from the R&E
shareholders as required in terms of the revised Settlement
Agreement whilst the requisite approvals will be sought from
the shareholders of JCI in accordance with the requirements of
the revised Settlement Agreement and the Litigation Settlement
Agreement.
5. FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY
R&E and JCI shareholders are advised to continue to exercise
caution when trading in their shares over-the-counter until
further announcements are made, setting out the pro forma
financial effects of the proposed settlement on R&E and JCI
respectively, as detailed in the announcement above.
R&E and JCI shareholders will be kept abreast of developments
as soon as practically possible regarding the implementation of
the revised Settlement Agreement and the Litigation Settlement
Agreement and the necessary regulatory and shareholder
approvals required in this regard.
Johannesburg
28 January 2010
Sponsor and Corporate advisor to R&E:
PSG Capital (Pty) Limited
Attorneys to R&E:
Van Hulsteyns
Sponsor to JCI:
Sasfin Capital
(a division of Sasfin Bank Limited)
Date: 28/01/2010 16:38:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
