| Mon 1 Feb 2010, 14:00 | | SEP - Sephaku Holdings Limited - Gold and nickel pro forma financials |
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SEP
SEP
SEP - Sephaku Holdings Limited - Gold and nickel pro forma financials,
cautionary withdrawal, Sephaku Cement funding, further cautionary
Sephaku Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2005/003306/06)
Share code: SEP
ISIN: ZAE000138459
("Sephaku Holdings" or "the company")
Pro forma financial effects relating to the disposal of certain gold and
nickel assets and withdrawal of cautionary announcement and preliminary
information relating to the funding of Sephaku Cement (Pty) Limited and
further cautionary announcement
1. Disposal of certain gold and nickel assets
1.1 Background
Shareholders are referred to the announcement dated 7 January 2010 concerning
an agreement dated 20 December 2009 ("the gold and nickel agreement") relating
to the sale by the company of its 100% holding in Sephaku Gold Holdings (Pty)
Limited ("Sephaku Gold") (which holds a 26% interest in Taung Gold Limited)
and its 26% interest in African Nickel Holdings (Pty) Limited to Mr. Mong
Seng Wu, Mandra Capital and/or their nominees (jointly referred to as "the Wu
Group") for a total cash consideration of R80 million, to be settled in four
equal tranches over the next 12 months ("the gold and nickel sale").
In an addendum to the agreement, it was agreed that
a) the gold and nickel sale would include the disposal of the claims of
Sephaku Holdings against Sephaku Gold for an unchanged purchase consideration
and that such purchase consideration would be settled in five tranches instead
of four; and
b) the date by which all conditions precedent relating to the gold and nickel
sale had to be fulfilled would be extended from 20 January 2010 to 27 January
2010.
All conditions precedent have now been fulfilled and the gold and nickel sale
is accordingly unconditional.
1.2 Pro forma financial effects
The unaudited pro forma financial effects of the gold and nickel sale are
presented below. Such pro forma financial effects are the responsibility of
the board of directors of Sephaku Holdings and are presented for illustrative
purposes only to provide information on how the gold and nickel sale may have
impacted on the reported financial information of the company if it had been
implemented in the six months ended 31 August 2009. Because of their nature,
the pro forma financial effects may not give a fair indication of the
company`s financial position at 31 August 2009 or its future earnings.
Before the gold After the gold %age change
and nickel sale and nickel sale
(i) (ii)
Attributable loss per (50.65) (26.17) 48
ordinary share for the
six months ended 31
August 2009 (cents)
(iii)
Headline loss per (45.08) (45.08) 0
ordinary share for the
six months ended 31
August 2009 (cents)
(iii)
Net asset value per 235.57 259.86 10
ordinary share at 31
August 2009 (cents)
(iv)
Net tangible asset 197.54 221.83 12
value per ordinary
share at 31 August
2009 (cents) (iv)
Weighted average 154 623 671 154 623 671 0
number of ordinary
shares in issue for
the period
Number of ordinary 155 804 561 155 804 561 0
shares in issue at the
end of the period
Notes:
(i) The figures in this column are extracted from the unaudited interim
financial results of the company for the six months ended 31 August 2009.
(ii) The figures in this column are based on the figures set out in the
previous column, having adjusted for the effects of the gold and nickel sale.
(iii) For purposes of the pro forma attributable and headline loss per
ordinary share, it was assumed that the gold and nickel sale was implemented
and the entire purchase consideration settled with effect from 1 March 2009.
(iv) For purposes of the pro forma net asset value and net tangible asset
value per ordinary share, it was assumed that the gold and nickel sale was
implemented and the entire purchase consideration settled on 31 August 2009.
1.3 Withdrawal of cautionary announcement
As the pro forma financial effects relating to the gold and nickel sale have
now been announced, shareholders need no longer exercise caution in this
regard when trading in the company`s securities.
2. Restructuring of the group
The board has resolved that the Sephaku group will be restructured such that
all of the company`s exploration rights, other than those related to Cement
and Fluorspar, are held by a single subsidiary and that various alternatives
are to be investigated in order to realise the maximum value for the group
from the unbundling and/or disposal of such assets. This will further enhance
the focus of the group on its core projects in Cement and Fluorspar.
3. Funding of the Sephaku Cement Project
3.1 Background
For the past two years, the company has been involved in various capital
raising exercises in order to provide funding for its mineral exploration and
development projects. With the implementation of the gold and nickel sale,
together with the group restructuring referred to above, the company will now
be able to focus primarily on assisting its 80.2% held subsidiary, Sephaku
Cement (Pty) Limited ("Sephaku Cement"), to raise finance for the development
of its cement manufacturing project in Itsoseng and cement grinding plant in
Delmas ("the Sephaku Cement Project").
3.2 Funding arrangements
The global financial crisis has delayed the raising of equity and debt for the
Sephaku Cement Project. The directors are therefore very pleased to be able
to announce that Sephaku Cement is in advanced negotiations with a major
global financial institution regarding an equity investment by that
institution of USD40 million (approximately R300 million) into Sephaku Cement.
The institution has already received preliminary investment committee approval
to proceed with the transaction, and has completed an extensive technical,
financial and legal due diligence review of Sephaku Cement and the Sephaku
Cement Project. The transaction is subject to the fulfillment of certain
conditions precedent including, inter alia, the signature of the relevant
legal agreements between the parties.
In addition, in terms of the gold and nickel agreement, the Wu Group has
agreed to subscribe for shares in Sephaku Holdings in an amount of between R70
and R170 million (bringing its total investment to a maximum of R250m),
conditional upon the Sephaku Cement Project being fully funded. Management is
in discussions with a number of other parties with a view to securing the
balance of the equity and debt funding required.
3.3 Further cautionary announcement
Shareholders are referred to the cautionary announcements dated 20 November
2009 and 7 January 2010 and the information presented above relating to the
funding of the Sephaku Cement Project and are advised that they should
continue to exercise caution when dealing in their Sephaku Holdings shares
until a full announcement relating to such funding arrangements can be made.
The attention of shareholders is also drawn to the announcement released on
SENS on Friday 29 January 2010 which provides an update on the company`s
Fluorspar Project.
Pretoria
1 February 2010
Sponsor
QuestCo Sponsors (Pty) Limited
Corporate advisor to Sephaku Cement
Capital Hill Corporate Finance (Pty) Limited
Date: 01/02/2010 14:00:02 Produced by the JSE SENS Department.
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