| Mon 26 Apr 2010, 13:00 | | MVL - Mvelaphanda Resources Limited - Announcement relating to the sale by |
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MVL
MVL
MVL - Mvelaphanda Resources Limited - Announcement relating to the sale by
Mvelaphanda Resources Limited ("Mvela Resources") of 44 000 000 shares in the
capital of Northam Platinum Limited ("Northam")
Mvelaphanda Resources Limited
Incorporated in the Republic of South Africa)
(Registration number: 1980/001395/06)
Share Code: MVL ISIN: ZAE000050266
("Mvela Resources")
ANNOUNCEMENT RELATING TO THE SALE BY MVELAPHANDA RESOURCES LIMITED ("MVELA
RESOURCES") OF 44 000 000 SHARES IN THE CAPITAL OF NORTHAM PLATINUM LIMITED
("NORTHAM") TO EURASIAN NATURAL RESOURCES CORPORATION PLC ("ENRC")
1. Introduction
Shareholders of Mvela Resources are advised that Mvela Resources has entered
into an agreement with ENRC in terms of which Mvela Resources will sell
44 000 000 shares in Northam, representing 12.21% of the issued ordinary share
capital of Northam, to ENRC at a price of R50 per Northam share (the
"Transaction"). This equates to a total consideration of R2 200 000 000 to be
settled in cash. Immediately after implementation of the Transaction, Mvela
Resources will own 50.5% of Northam.
2. Rationale for the Transaction
At its interim results briefing and in the SENS announcements published on 19
February 2009 and 4 June 2009, respectively, Mvela Resources outlined and re-
affirmed its strategic intent to dispose of its investment in Gold Fields
Limited ("Gold Fields") in order to redeem its debt and, thereafter, to simplify
its corporate structure through the unbundling of its investment in Northam to
its shareholders ("Unbundling Strategy"). The Unbundling Strategy will, inter
alia, resolve Mvela Resources` pyramid holding company structure under the JSE
Listings Requirements and realise value for shareholders by unlocking the
discount to Net Asset Value ("NAV") that Mvela Resources has historically traded
at.
As previously announced, the disposal of a portion of Mvela Resources`
investment in Gold Fields during the course of 2009 facilitated the redemption
of R1 860 million of the R2 100 million bridging loan raised in March 2009.
However, decreases in Gold Fields` share price since December 2009 have limited
opportunities for Mvela Resources to make further sales.
The consideration received from ENRC under the Transaction will allow Mvela
Resources to redeem a substantial amount of its debt, thereby significantly
deleveraging its balance sheet and enable Mvela Resources to proceed with the
simplification of its corporate structure under the Unbundling Strategy.
Following the sale of the 44 000 000 Northam shares in terms of the Transaction,
Mvela Resources will continue to hold 50.5% of Northam (181.84 million Northam
shares), which will ensure that Northam maintains it empowered status.
3. ENRC overview
ENRC is one of the world`s leading natural resources companies. It operates six
integrated divisions, supported by a central sale and marketing operation,
namely: Ferroalloys, Iron Ore, Alumina and Aluminium, Energy, Logistics and
Other Non-ferrous. ENRC controls sizable proven reserves of chromium,
manganese, iron ore, bauxite, coal, copper and cobalt, supplemented by extensive
resources.
ENRC`s shares are listed on the London Stock Exchange and the Kazakhstan Stock
Exchange with an equivalent market value on 23 April 2010 of approximately R178
billion.
4 Pro forma financial effects
The unaudited pro forma financial effects set out below are included for the
purpose of illustrating the effect of the Transaction on Mvela Resources` basic
earnings (EPS), basic headline earnings (HEPS), NAV and net tangible asset value
(NTAV) per ordinary share for the six months ended, and as at, 31 December 2009.
The directors of Mvela Resources are responsible for the preparation of the
unaudited pro-forma financial effects stated below.
These unaudited pro forma financial effects:
- are presented for illustrative purposes only and have not been reviewed by
the auditors;
- may, because of their nature, not give a fair reflection of Mvela
Resources` financial position, changes in equity, the results of operations
or cash flows after the Transaction; and
- do not necessarily represent or indicate sustainable earnings or future
financial position.
Before (1) After (2) Change
(cents) (cents) (%)
EPS (67) (46) 31.7%
HEPS (54) (33) 38.8%
NAV 3,313 3,691 11.4%
NTAV 3,313 3,691 11.4%
Notes:
1 The Before column is extracted from the Mvela Resources reviewed
interim financial results for the six months ended 31 December 2009;
2 The After column is based on the Before column and after accounting
for the following adjustments:
2.1 Material adjustments to the income statement:
* A reduction of R78.5 million in the preference dividends payable
on the preference share funding during the six months ending 31
December 2009;
* An increase in net profit attributable to minority shareholders
of R18.1 million for the six months ended 31 December 2009;
* Accounting for estimated transaction costs of R10 million and
securities tax on the settlement of preference shares amounting
to R4.9 million;
2.2 Material adjustments to the statement of financial position
include:
* An increase in the minority shareholders` interest of R1.2
billion;
* Accounting for a R1 billion accounting profit on the disposal of
the 12.2% interest in Northam;
* A reduction in the preference share funding of R2 billion;
* Payment of R10 million transaction costs, R4.9 million securities
tax on the settlement of the preference shares and capital gains
tax of R178.8 million on the sale of the Northam shares.
5 Timetable and further announcements
The Transaction is a category 2 transaction from a JSE Listings Requirements
perspective and therefore does not require shareholder approval. The Transaction
is however subject to obtaining any required exchange control approval. It is
expected that the transaction will be implemented during May 2010.
Further announcements regarding the Unbundling Strategy will be made in due
course.
26 April 2010
Johannesburg
Financial adviser and sponsor to Mvela Resources
J.P.Morgan
Legal advisers to Mvela Resources
Bowman Gilfillan
Date: 26/04/2010 13:00:01 Produced by the JSE SENS Department.
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