| Tue 30 Mar 2010, 17:21 | | SAH - South African Coal Mining Holdings Limited - Detailed cautionary |
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SAH
SAH
SAH - South African Coal Mining Holdings Limited - Detailed cautionary
announcement regarding the acceptance of a proposal received from Shanduka Coal
(Proprietary) Limited to acquire all of the issued ordinary share capital of
SACMH
SOUTH AFRICAN COAL MINING HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/009012/06)
Share code: SAH ISIN: ZAE000102034
("SACMH" or "Company")
DETAILED CAUTIONARY ANNOUNCEMENT REGARDING THE ACCEPTANCE OF A PROPOSAL RECEIVED
FROM SHANDUKA COAL (PROPRIETARY) LIMITED TO ACQUIRE ALL OF THE ISSUED ORDINARY
SHARE CAPITAL OF SACMH
1. INTRODUCTION
1.1 Shareholders are referred to previous announcements by SACMH, the
latest being dated 18 February 2010. In such announcements, the board
of directors of SACMH ("Board") undertook that all serious offers in
respect of which the board has received satisfactory external proof of
funding will be submitted to shareholders for consideration.
1.2 During the week commencing on 15 March 2010, the Board was informed by
The Standard Bank of South Africa (Proprietary) Limited ("SBSA"), the
secured financiers of SACMH, that SBSA has entered into an agreement
with Shanduka Coal (Proprietary) Limited ("Shanduka") to sell a
portion of SBSA`s secured claim against SACMH to Shanduka (as
described in paragraph 3 below) and to grant Shanduka a period of
exclusivity in respect thereof until the Final Date (as defined in
paragraph 2.1.1 hereto) or a period of 35 business days, whichever is
the longer.
1.3 On 18 March 2010 the Board received a proposal from Shanduka which,
subject to certain conditions precedent set out herein and which, on
implementation thereof, would allow for the acquisition by Shanduka of
the entire issued share capital of SACMH and a portion of the
indebtedness or claims of whatsoever nature and howsoever arising
which may be owing by SACMH, or any of its subsidiaries, to SBSA
(collectively, "the Transaction").
2. THE TRANSACTION
2.1 Implementation of the Transaction:
2.1.1 Shanduka shall propose a scheme of arrangement in terms of
the provisions of Section 311 of the Companies Act no 61 of
1973 ("Act") to the holders of the ordinary shares in the
issued share capital of the Company ("Scheme Shares"), but
excluding the Forward Sale Participants (as defined below)
("Scheme Participants") pursuant to which Shanduka shall
purchase the Scheme Shares from the Scheme Participants on
the implementation date of the Scheme ("Final Date") for a
consideration of 28 cents per Scheme Share based on the
assumptions and subject to the adjustments as detailed in
schedules attached to the proposal ("Scheme Consideration")
("Scheme").
2.1.2 Prior to the implementation of the Scheme, Shanduka will
approach Royal Bafokeng Capital (Proprietary) Limited,
Mainsail Trading 55 (Proprietary) Limited, New Africa Mining
Fund (Proprietary) Limited and any of the other principal
shareholders defined in the subscription agreement entered
into between SACMH and Richards Bay Coal Terminal Company
Limited dated 14 December 2009 ("Subscription Agreement")
who were shareholders on the commencement date of the said
agreement, or their successors-in-title ("Forward Sale
Participants") to enter into a forward sale agreement in
terms of which the Forward Sale Participants shall, on the
Final Date, sell their shares ("Forward Sale Shares") to
Shanduka with effect from and on the first anniversary of
the commencement date of the Subscription Agreement
("Closing Date"), in consideration for which Shanduka shall
pay the Forward Sale Participants a consideration of 28
cents per Forward Sale Share plus accrued interest from the
Final Date until the day prior to Closing Date at the SBSA
daily call deposit rate ("Forward Sale Consideration"). The
Forward Sale Participants shall have no entitlement to any
profits earned or dividends declared by SACMH for the period
up to the Closing Date.
2.2 Terms of the Transaction:
2.2.1 On the Final Date, Shanduka shall pay to the Scheme
Participants, the Scheme Consideration;
2.2.2 On the Closing Date, Shanduka shall pay to the Forward Sale
Participants, the Forward Sale Consideration; and
2.2.3 The sum of the Scheme Consideration and the Forward Sale
Consideration will amount to R126 687 177 (one hundred and
twenty six million six hundred and eighty seven thousand one
hundred and seventy seven rand), plus interest on the
Forward Sale Consideration from the Final Date until the
Closing Date.
2.3 Conditions precedent to the Transaction:
The implementation of the Transaction is subject to the fulfillment or
waiver, as the case may be, of, inter alia, the following conditions
precedent, which conditions precedent may be waived by Shanduka in its
sole discretion:
2.3.1 SACMH will, on the day immediately prior to the sanctioning
of the Scheme by the South Gauteng High Court, have no
liabilities other than those disclosed by SACMH detailed in
the schedules to the proposal;
2.3.2 the receipt by Shanduka of irrevocable undertakings from
Scheme Participants holding not less than 75% of the Scheme
Shares given in favour of Shanduka and the Company to attend
the Scheme meeting and vote in favour of the Scheme, within
30 days of acceptance of the proposal by SACMH;
2.3.3 approval of the Scheme by a majority of Scheme Participants
representing not less than three-quarters of the votes
exercisable by Scheme Participants present and voting,
either in person or by proxy, at the Scheme meeting;
2.3.4 the Scheme being sanctioned by the South Gauteng High Court;
2.3.5 a certified copy of the Order of Court sanctioning the
Scheme being lodged with and registered by the Registrar of
Companies in terms of the Act;
2.3.6 for purposes of the Forward Sale, the approval of the
Forward Sale by the Department of Mineral Resources ("DMR"),
to the extent required;
2.3.7 for purposes of the Transaction, the approval of the
Transaction by the requisite regulatory authorities within
120 days of acceptance of the proposal by SACMH; and
2.3.8 the necessary formal agreements being concluded on terms
reasonably acceptable to the parties thereto within 28
working days of acceptance of the offer by SACMH, which
agreements shall include an implementation agreement,
Forward Sale Agreement, shareholders` agreement, and mining
management agreement.
2.4 General offer:
Shanduka will be entitled, at any time prior to the Final Date, to
convert the Scheme into a general offer to Scheme Participants, in
terms of section 440 of the Act.
2.5 Delisting:
If the Scheme is successful or the general offer becomes
unconditional, application will be made to the JSE Limited ("JSE") for
the termination of the listing of the shares of SACMH on the JSE.
2.6 Funding of the Transaction:
Prior to the announcement of an offer ("Offer") in terms of the Securities
Regulation Code on Takeover and Mergers ("SRP Code"), Shanduka will provide
the Securities Regulation Panel ("SRP") with confirmation that Shanduka has
sufficient resources available to it to satisfy full acceptance of such
Offer.
3. SBSA
SBSA, as secured financiers to the Company, has accepted a proposal from
Shanduka that, on implementation of the Scheme, would allow for the
acquisition by Shanduka of a portion of the indebtedness and claims of
whatsoever nature and howsoever arising which may be owing by SACMH, or any
of its subsidiaries, to SBSA ("SBSA Agreement") resulting in SBSA having no
further claims against SACMH, however certain claims are being retained by
SBSA so as to enforce certain claims by it against third parties.
4. SHANDUKA AND ITS UNDERTAKINGS
Shanduka is a private company incorporated in South Africa and forms part
of the Shanduka Group. Shanduka has various thermal and anthracite
collieries.
In addition to the terms of the Transaction, Shanduka has undertaken to:
4.1 provide a rehabilitation guarantee in favour of the DMR for an amount
of approximately R34 million;
4.2 provide finance and/or procure the requisite assistance, under the
terms of a mining management agreement, to the Company in order to
recommence mining operations to ensure compliance with the
Subscription Agreement; and
4.3 procure that the Company has sufficient cash resources to fund its
operating costs,
(collectively, "Shanduka Undertakings")
Shanduka currently owns no shares in SACMH.
5. OPINION AND RECOMMENDATIONS
On 18 March 2010 the majority of the Board (with the exception of Mr.
Gribnitz), after having evaluated the terms and conditions of the
Transaction (including the Shanduka Undertakings) as well as an offer by
another party (set out in a separate announcement), believed that it was in
the best interests of the Company and its stakeholders to recommend the
proposal received from Shanduka to its shareholders based inter alia on the
better price, better major shareholder provisions, the SBSA Agreement
(critical to any transaction`s success) and the Shanduka Undertakings.
Shanduka is the potential preferred offeror referred to in other
announcements and to this end, the Board agreed to a 35 business day
exclusivity period from date of acceptance of the proposal.
Due to the time constraints of the proposal, the Board obtained telephonic
approval from the SRP to evaluate and recommend this proposal prior to
obtaining an opinion from an external adviser as required by the SRP Code.
An appropriate external adviser will be appointed to evaluate the
Transaction and any further proposals that may be received and to make
appropriate recommendations to the Board and SACMH shareholders.
6. DOCUMENTATION AND SALIENT DATES
Pursuant to the Offer, a circular will be posted to SACMH shareholders,
subject to the approval of the JSE and the SRP andwithin the requisite
timeframes stipulated in the SRP Code.
7. CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue to exercise caution when dealing in
the Company`s shares until a further announcement is made.
Johannesburg
30 March 2010
Sponsor:
Exchange Sponsors
Date: 30/03/2010 17:21:01 Produced by the JSE SENS Department.
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