| Thu 10 Jun 2010, 8:53 | | SIM - Simmers shareholders offered innovative alternative to the proposed rights |
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SIM
SIIF
SIM - Simmers shareholders offered innovative alternative to the proposed rights
offer and reminder of cautionary announcement
Simmer & Jack Mines, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
Share code: SIM ISIN Code: ZAE000006722
("Simmers")
SIMMERS SHAREHOLDERS OFFERED INNOVATIVE ALTERNATIVE TO THE PROPOSED RIGHTS OFFER
AND REMINDER OF CAUTIONARY ANNOUNCEMENT
Simmers is offering shareholders an alternative to the proposed rights offer as
announced on SENS on 28 April 2010 and in the press on 29 April 2010. The rights
offer was proposed primarily to repay a R220 million bridge loan facility
entered into in March 2010 ("bridge loan facility") with Rand Merchant Bank, a
division of FirstRand Bank Limited ("RMB"), enabling Simmers to subscribe for
Rand denominated secured convertible redeemable notes ("Rand FIU Notes") issued
as part of the First Uranium Corporation ("First Uranium") recapitalisation
programme.
Simmers funded its share of the First Uranium recapitalisation programme by
using approximately R70 million of its cash reserves plus the R220 million
bridge loan facility. In order to repay the bridge loan facility and to
replenish its cash reserves, Simmers received permission from shareholders on 24
May 2010 to offer R360 million secured convertible redeemable bonds to
shareholders by way of a rights offer.
While this remains a suitable option, the Simmers board has since had the
opportunity to consider alternative funding mechanisms.
As previously announced on SENS on 4 June 2010 and in the press on 7 June 2010,
Simmers has mandated Sovereignty Capital Advisors (Pty) Limited to test the
appetite from investors for the listing and sale of part of the R463.9 million
(C$62.7 million) Rand FIU Notes issued by Mine Waste Solutions (Proprietary)
Limited ("Mine Waste Solutions") as part of the First Uranium recapitalisation
programme.
Simmers believes that the sale of the Rand FIU Notes is advantageous as it
provides a mechanism for Simmers to repay the bridge loan facility without
diluting the holdings of Simmers shareholders that do not participate in the
proposed rights offer, and offers Simmers` shareholders an opportunity to
participate directly in the upside from a First Uranium re-rating. Furthermore,
the successful sale of Rand FIU Notes will obviate the need for all Simmers`
assets to be provided for the next three years as security for the secured
convertible redeemable notes to be issued in terms of the proposed rights offer.
The Rand FIU Notes provide a fixed 11% interest per annum and are convertible
into First Uranium shares listed on the JSE at the option of the holder at any
stage until redemption in 2013 at a strike price of R9.30 per First Uranium
share.
The sale of the Rand FIU Notes is supported by Vulisango Holdings, Simmers`
largest shareholder and BEE partner.
"Vulisango is fully-supportive of Simmers` approach. The Simmers board will
decide which funding option is best for the Company - the sale of the FIU Rand
notes or the proposed rights offer, and Vulisango will support their decision
either way. The beauty of the sale of the Rand FIU Notes is the flexibility it
provides as it does not preclude Simmers from pursuing the proposed rights offer
should it wish to do so," said Vulisango CEO, Valence Watson.
The Simmers board is expected to make a decision regarding which funding option
to pursue on or about 24 June 2010.
Shareholders are referred to the further cautionary announcement released on
SENS on Friday, 4 June 2010 and are reminded that they should continue to
exercise caution when dealing in Simmers` shares until a further announcement
is made.
For further information on the purchase of the Rand First Uranium Notes, please
contact Nick Goodwin, Investor Relations Executive at Simmers +27 83 629 8605 or
via email, nick@simmers.co.za, or alternatively Peter van den Steen at
Sovereignty Capital via email on peter@sovcap.co.za.
10 June 2010
Johannesburg
Sponsor:
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 10/06/2010 08:53:00 Produced by the JSE SENS Department.
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