| Wed 12 May 2010, 16:31 | | RNG - Randgold & Exploration Company Limited - Re-listing of R&E circular to |
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RNG
RNG
RNG - Randgold & Exploration Company Limited - Re-listing of R&E, circular to
R&E shareholders, notice of general meeting and the Abridged revised listing
particulars of R&E
Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Share Code: RNG & ISIN: ZAE000008819
("R&E" or "the company")
RE-LISTING OF R&E, CIRCULAR TO R&E SHAREHOLDERS, NOTICE OF GENERAL MEETING AND
THE ABRIDGED REVISED LISTING PARTICULARS OF R&E
The board of R&E takes pleasure in announcing the finalisation and distribution
of the Circular to R&E shareholders regarding the proposed settlement between
R&E, JCI Limited ("JCI") and JCI Investment Finance (Pty) Limited ("JCIIF"),
details of which were disclosed to shareholders on SENS on 28 January 2010. The
proposed net settlement will seek to return approximately R 950 million to R&E
shareholders.
Furthermore the board of R&E is pleased to announce that the JSE has approved
the re-listing of R&E shares on the JSE from the commencement of trade on
Friday, 4 June 2010.
The proposed settlement and approved re-listing of R&E marks a key milestone in
managements stated intention of restoring value to R&E shareholders as well as
providing shareholders with a tradable share since its suspension on 1 August
2005.
1 Introduction
1.1 Shareholders are referred to the detailed announcement on SENS on 28
January 2010 setting out the terms of the proposed settlement between R&E,
JCI and JCIIF as concluded between the parties in terms of the revised
Settlement Agreement dated 20 January 2010. The announcement furthermore
contained details on the irrevocable support from certain R&E shareholders
for the proposed settlement.
1.2 Furthermore, as a separate matter and unrelated to the proposed settlement
referred to above, R&E shareholders are hereby advised that on 14 January
2010, R&E exercised the security provided to it by JCI Gold Limited ("JCI
Gold"), a subsidiary of JCI, (being a component of JCI Gold`s interest in
the shares of Free State Development and Investment Corporation Limited
("FSD")) which secured the outstanding loan amount of R 161 960 265 due to
R&E by JCI Gold, as result of which R&E became the beneficial owner of a
further 6 690 610 FSD shares (approximately 30.1% of the equity share
capital of FSD), bringing R&E`s shareholding in FSD to 85.21% (hereinafter
referred to as "the FSD excussion"), further details of which are set out
in paragraph 3 below.
1.3 It has been the stated intention of R&E to comply with the necessary
requirements of the JSE Limited ("JSE") to re-list R&E and to provide R&E
shareholders with a tradable share. Paragraph 6 sets out the Abridged
Revised Listing Particulars as required to be published in terms of the JSE
Listing Requirements.
2 The Proposed Settlement
2.1 As set out on the SENS announcement of 28 January 2010, subject to the
fulfilment of all suspensive conditions to the revised Settlement Agreement
and the implementation thereof:
2.1.1 JCI and JCIIF will cause 6 051 632 shares in Gold Fields Limited
("settlement GFI shares") to be transferred to R&E;
2.1.2 JCI will issue and allot 1 555 710 220 JCI shares to R&E ("new JCI
shares");
2.1.3 R&E will, following the transfer of the settlement GFI shares to R&E
and the issue and allotment of the new JCI shares to it, firstly make
a capital distribution of the settlement GFI shares to R&E
shareholders, out of share premium, in the ratio of 0.0809 settlement
GFI shares for every one R&E share held and immediately thereafter,
unbundle its entire shareholding of JCI (which will consist of both
the new JCI shares per the proposed settlement and its existing JCI
shares owned pre-settlement) to the R&E shareholders in terms of
section 46 of the Income Tax Act 1962 (Act 58 of 1962), in the ratio
of 24.8739 JCI shares for every one R&E share held; and
2.1.4 The parties will be released of all claims against each other.
2.2 For the purposes of the proposed net settlement, incorporating the transfer
of the settlement GFI shares from JCI and JCIIF to R&E and the issue of the
new JCI shares to R&E, the board of R&E has elected to treat such
settlement as a Category 1, related party transaction, in terms of the JSE
Listings Requirements. Accordingly, R&E is required to obtain shareholder
approval (excluding the approval from JCI and its subsidiaries and
associates being the related party to the proposed settlement ("related
parties")) in respect of the proposed settlement.
2.3 In addition, in terms of the JSE Listings Requirements pertaining to
related party transactions, the board of R&E would ordinarily be required
to obtain a fairness opinion in respect of the proposed settlement
incorporating the transfer of the settlement GFI shares to R&E and the
issue of the new JCI shares to R&E, however is unable to do so. The
inability to produce a fairness opinion was motivated to the JSE resulting
in the board of R&E voluntarily including a Mediator`s Report that contains
the opinion of the Mediators (comprising the opinion of Professor HE Wainer
CA(SA), Mr C Nupen and Advocate SF Burger SC) in respect of the proposed
settlement.
2.4 The Mediators conclude by way thereof that:
"...the Randgold/JCI settlement agreement is in our opinion, commercially
prudent and not inequitable to the shareholders of Randgold or JCI".
2.5 At the time of the aforementioned announcement on SENS, the unaudited pro
forma financial effects of the proposed settlement were not available. The
pro forma financial effects of the proposed settlement are set out in
paragraph 4 below.
2.6 Furthermore it should be noted that JCI has obtained the necessary
regulatory approvals in respect of its circular to shareholders regarding
the proposed settlement, which circular is expected to be distributed to
shareholders on or about Thursday, 13 May 2010. The SENS announcement of 28
January 2010 furthermore contained details on the irrevocable support from
certain JCI shareholders in respect of the proposed settlement.
3 The FSD Excussion
3.1 On 17 April 2009, FSD and JCI Gold formalised, by way of the FSD Loan
Agreement, a historical loan of R 105 396 864, including interest thereon
at prime, which had been advanced by FSD to JCI Gold, prior to the
reconstitution of the JCI board in August 2005, the original details of
which could not be established for reasons that have been well documented.
3.2 Furthermore, R&E entered into a loan agreement with, inter alia, JCI Gold
and FSD, and advanced an amount of R60,5 million on 17 April 2009 and a
further R25 million on 18 December 2009 to JCI Gold ("R&E Loan Agreement"),
against the security of 9 933 850 FSD ordinary shares held by JCI Gold,
further details of which were concluded in the Pledge Agreement of 18
December 2009 ("the Pledge Agreement").
3.3 R&E also acquired all rights and claims which FSD had against JCI Gold in
terms of the FSD Loan Agreement (as set out in paragraph 3.1 above), on 18
December 2009.
3.4 The total loan from JCI Gold was repayable to R&E by 11 January 2010,
failing which R&E would be entitled to exercise its rights in terms of the
security provided by JCI Gold to R&E in terms of the Pledge Agreement.
3.5 JCI Gold failed to pay the full loan amount outstanding at 11 January 2010,
and as such R&E exercised the security provided by JCI Gold in terms of the
Pledge Agreement (being a component of JCI Gold`s interest in FSD shares),
against the outstanding loan amount of R 161 960 265 (net of cash already
received by R&E), as a result of which R&E became the beneficial owner of a
further 6 690 610 FSD shares (approximately 30.10% of the equity share
capital of FSD), bringing R&E`s total shareholding in FSD to 85.21%.
3.6 The value at which the FSD shares were realised by R&E in terms of the
security provided by JCI Gold was agreed by R&E and JCI Gold at R24.2071
per FSD share as set out in the Pledge Agreement. This price was based on
FSD`s disclosed net asset value per FSD share at 31 December 2009. Such net
asset value excluded any value for the prospecting rights held in FSD.
3.7 The rationale for the excussion of the FSD shares was to enable R&E to
recover the outstanding portion of the loan receivable from JCI Gold by
exercising the security provided by JCI Gold in respect of such loans
advanced by R&E.
3.8 The JSE have ruled that the FSD excussion is a related party transaction in
terms of the JSE Listings Requirements and as such has requested that R&E
shareholders, excluding related parties, ratify by way of an ordinary
resolution, the FSD excussion. The board of R&E has agreed to ratify the
said FSD excussion but regards the exercise by it of its rights under the
Pledge Agreement (which resulted in it taking transfer of 6 690 610 FSD
shares), to have occurred solely in consequence of JCI Gold having failed
to meet its repayment obligations to R&E when they fell due, in terms of
the FSD Loan Agreement, the R&E Loan Agreement and the Pledge Agreement.
3.9 The FSD excussion enjoys the support of the board of R&E and certain
shareholders as set out in paragraph 3.10 below. Moore Stephens Corporate
Finance (Jhb) (Pty) Limited, an independent expert providing the fairness
opinion, have considered the FSD excussion to be fair to R&E shareholders.
3.10 R&E has procured irrevocable undertakings from the following
shareholders to vote in favour of the resolutions required to give
effect to the FSD excussion:
3.10.1 Clear Horizon Multi-Strategy Fund which holds 1 271 168 R&E shares
i.e. 1.7% of the issued share capital of R&E;
3.10.2 Investec which holds 26.26% of the issued share capital of R&E; and
3.10.3 Allan Gray, in which Allan Gray undertakes to vote in favour of the
resolutions pertaining to the shares in respect of which it exercises
the voting rights, and to recommend to its clients to vote in favour
of the resolutions pertaining to the shares in respect of which its
clients exercise the voting rights. Allan Gray directly and
indirectly holds 24.35% of R&E.
3.11 The unaudited pro forma financial effects of the FSD excussion are set
out in paragraph 4 below.
4 The pro forma financial effects
4.1 The unaudited pro forma financial effects of the proposed settlement and
the FSD excussion, as set out below are the responsibility of the directors
of R&E. The unaudited pro forma financial effects are presented in a manner
consistent with the basis on which the historical financial information has
been prepared and in terms of R&E`s accounting policies. The unaudited pro
forma financial effects have been presented for illustrative purposes only
and, because of their nature, may not give a fair reflection of R&E`s
financial position nor of the effect on future earnings after the
implementation of the proposed settlement and the FSD excussion.
4.2 The table below sets out the unaudited pro forma financial effects of the
proposed settlement (incorporating the capital distribution and unbundling)
and the FSD excussion on R&E, based on the audited consolidated financial
results for the year ended 31 December 2009 and on the assumption that:
* For calculating the earnings per share ("EPS") and headline earnings
per share ("HEPS"), the proposed settlement and FSD excussion were
effected on 1 January 2009; and
* For calculating the net asset value per share ("NAV") and net tangible
asset value per share ("NTAV"), the proposed settlement and the FSD
excussion were effected on 31 December 2009.
"Before" "After
(A) FSD
excussio
n and "After FSD
settleme excussion,
"After nt" settlement, % Diff
FSD % Diff capital (C/A-1)
excussion" (B/A-1) distribution
(B) and
unbundling"
(C)
EPS (cents) 48 1 240
64 33% 1 240 2 483%
HEPS (cents) 48 1 240
64 33% 1 240 2 483%
Weighted 73 063 73 063
average
number of
shares in
issue 73 063 - 73 063 -
(`000)
NAV per 674 1 928
share 674 - 601 -11%
(cents)
NTAV per 674 1 928
share 674 - 601 -11%
(cents)
Number of 71 813 71 813
shares in
issue (`000)
71 813 - 71 813 -
4.3 Salient notes and assumptions
4.3.1 The "Before" EPS and HEPS have been extracted without adjustment from
the audited consolidated statement of comprehensive income for the
year ended 31 December 2009.
4.3.2 The "Before" NAV per share and NTAV per share have been extracted
without adjustment from the notes to consolidated annual financial
statements for the year ended 31 December 2009.
4.3.3 The "After FSD excussion" EPS, HEPS, NAV per share and NTAV per share
have been adjusted to include the effects of the FSD excussion which
would increase only the profit attributable to R&E shareholders.
4.3.4 The "After FSD excussion and settlement" EPS, HEPS, NAV per share and
NTAV per share have been adjusted to include the FSD excussion
referred to in note 4.3.3 above and the proposed settlement of 6 051
632 settlement GFI shares and 1 555 710 222 new JCI shares issued to
R&E.
4.3.5 The "After FSD excussion, settlement, capital distribution and
unbundling" EPS, HEPS, NAV per share and NTAV per share have been
adjusted to include the FSD excussion referred to in note 4.3.3, the
proposed settlement referred to in note 4.3.4 above and the capital
distribution of the settlement GFI shares to R&E shareholders and the
distribution and unbundling of the JCI shares to R&E shareholders in
proportion to their respective shareholdings.
4.3.6 Transaction costs of R4.61 million have been adjusted for.
4.3.7 For the avoidance of doubt, the resultant impact on the NAV per share
and NTAV per share of the proposed settlement and the FSD excussion,
as set out in the "After FSD excussion, settlement, capital
distribution and unbundling" column merely reflects the impact on R&E
of unbundling its existing interest in JCI, comprising 305 186 049 JCI
shares, as the settlement GFI shares and the new JCI shares received
by R&E as a result of the proposed settlement are immediately
distributed and unbundled to R&E shareholders.
Furthermore, and for the avoidance of doubt, shareholders are reminded that
the pro forma financial effects as set out above are based on the audited
consolidated annual financial statements of R&E at 31 December 2009. Such
audited consolidated annual financial statements have accounted for R&E`s
investment in JCI at cost less impairments. The Mediators, in formulating
their opinion regarding the revised Settlement Agreement, have also
considered, inter alia, the unaudited NAV of R&E in which R&E`s investment
in JCI was valued based on the published NAV of JCI at 31 December 2009,
the pre-distribution effect of the proposed settlement and the effect of
the cross holding between R&E and JCI (which affects the NAV of both
companies).
5 Circular to shareholders and notice of general meeting
R&E shareholders are advised that in accordance with the JSE Listing
Requirements, a circular to shareholders incorporating the Revised Listings
Particulars relating to R&E`s re-listing, together with a notice of a
general meeting of R&E shareholders, to be convened at 11h00 on Friday, 28
May 2010 at MW Business Centre, Michelangelo Hotel, Mandela Square,
Sandton, was posted to shareholders today. Copies of the Circular
incorporating the Revised Listing Particulars may be obtained during normal
business hours at the registered office of R&E at 7th Floor, Fredman
Towers, 13 Fredman Drive, Sandown, 2196, and from R&E`s sponsor and
corporate advisor at PSG Capital (Pty) Limited, 1st Floor, Ou Kollege
Building, 35 Kerk Street, Stellenbosch, 7600, from Wednesday, 12 May 2010
until Friday, 4 June 2010.
In addition the Circular incorporating the Revised Listing Particulars can
be downloaded from the company`s website at www.randgoldexp.co.za
6 Abridged Revised Listing Particulars
These Abridged Revised Listing Particulars are not an invitation to the
public to subscribe for or an offer to the public to purchase ordinary
shares in R&E, but are prepared and issued in terms of the JSE Listings
Requirements for the purpose of providing the public and shareholders of
R&E with salient information pertaining to the Company and its re-listing
on the JSE. A complete set of Revised Listing Particulars are contained in
the Circular distributed to R&E shareholders as set out in paragraph 5
above.
6.1 Name and date of incorporation
R&E was incorporated in South Africa as a public company under the name
Randgold & Exploration Company Limited on 29 September 1992 to take over
the gold interests of Rand Mines Limited, being South Africa`s oldest
mining house. R&E is an investment holding company with assets in the
mining industry.
6.2 Background to re-listing
R&E alleges that it was previously the victim of widespread frauds and
thefts of its assets, which resulted in the company being stripped of the
majority of its assets. Uncertainty surrounding R&E`s substantial
investment in Randgold Resources Limited (which comprised the majority of
R&E`s asset base) prevented R&E from publishing annual financial statements
for the financial year ended 31 December 2004.
On 1 August 2005 R&E was suspended on the JSE as a result of it not being
able to produce audited financial statements for the financial year ended
31 December 2004 as required under the JSE Listings Requirements.
At the time of releasing the audited financial results for R&E for the
financial years ended 31 December 2007, 2008 and 2009, the board of R&E had
reaffirmed as a management priority, its commitment to lift the suspension
in the trading of R&E`s shares on the JSE by seeking a re-listing of its
ordinary shares, thereby allowing shareholders to trade their ordinary
shares in R&E. The present board believes that, as a listed entity, the
market will reward R&E`s loyal shareholders appropriately and unlock
additional value, over and above the approximate R 950 million to be
distributed and unbundled to shareholders in terms of the proposed
settlement.
6.3 Overview of R&E and Prospects
6.3.1 R&E continues to operate as an investment and exploration company in
the gold mining sector, while the recovery of misappropriated assets
remains a high priority. Management accordingly continues to
carefully balance between investing in litigation and preserving and
growing current assets.
6.3.2 The Company is managed by a small but skilled and committed team that
endeavors at all times to contain operating expenses. R&E currently
holds prospecting rights directly and indirectly through subsidiary
companies which it plans to develop further, if proven viable, in
order to increase the value of its investments.
6.3.3 Approximately 26% of the assets of R&E at 31 December 2009, being the
date of last audited financial statements, constitutes investments in
the gold market through R&E`s investment in Gold Fields Limited and
gold-related prospecting rights. The balance of the assets of R&E is
comprised of cash and secured loans to JCI and its subsidiaries and
associated companies, making R&E extremely liquid and well placed to
take advantage of viable investment opportunities in the mining
industry.
6.3.4 Going forward, R&E`s strategic objectives are as follows:
* To utilise its liquid assets, exploration targets and skill base
as a platform to develop and participate in investment and
funding opportunities in the resources industry to grow the
current portfolio;
* To review its legal strategy in light of the proposed settlement
with JCI and JCIIF and where feasible, continue pursuing its
claims against third parties and, where possible, to make
recoveries against such parties; and
* To realise further value for R&E shareholder, insofar as is
possible.
6.4 Re-listing and JSE approval
R&E has obtained formal approval from the JSE to re-list all of the
Company`s issued ordinary shares on the main board of the JSE in the
"Mining: Gold Mining" sector of the JSE list under the abbreviated name
"Randgold" and share code "RNG" with effect from the commencement of trade
on Friday, 4 June 2010.
As at the date of re-listing, the total authorised ordinary share capital
of the company will comprise 105 000 000 ordinary shares with a par
value of R0.01 (one cent) each, the issued ordinary share capital will
comprise of 74 813 128 ordinary shares with a par value of R0.01 (one cent)
each and a total share premium account of R986.05 million. All ordinary
shares in issue rank pari passu with each other.
6.5 Directors
The full names, ages, business addresses and capacities of the directors of
R&E are outlined below:
Full name Age Capacity Business Address
Motsehoa Brenda 45 Independent non- Unit 3, 17 Georgian
Madumise executive Crescent Road,Northdowns
director Office Park,Bryanston
2191
Marais Steyn 38 Chief executive R&E,7th Floor Fredman
officer Towers,13 Fredman
Drive,Sandown 2196
David Chaim Kovarsky 62 Non-executive International Ferro
chairman Metals Limited,Suite
14b, 3rd Floor,3
Melrose
Boulevard,Melrose Arch
2076
John Hulme Scholes 43 Independent non- Aquarius Platinum (South
executive Africa) (Pty)
director Limited,1st
Floor,Building
5,Harrowdene Office
Park, Western Service
Road,Woodmead 2191
Van Zyl Botha 29 Financial R&E,7th Floor Fredman
Director Towers,13 Fredman
Drive,Sandown 2196
Johannesburg
12 May 2010
Sponsor and Corporate Advisor - PSG Capital (Pty) Limited
Attorneys - Van Hulsteyns
Auditors and independent reporting accountants to R&E - KPMG Inc.
Independent Expert - Moores Stephens
Date: 12/05/2010 16:31:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
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.
