| Mon 20 Sep 2010, 16:21 | | PAM - Palabora Mining Company Limited - Salient dates and times and updated Pro |
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PAM
PAM
PAM - Palabora Mining Company Limited - Salient dates and times and updated Pro
Forma Financial information regarding the proposed broad-based Black Economic
Empowerment ("Bbbee") transaction
Palabora Mining Company Limited
(Incorporated in the Republic of South Africa)
Registration number 1956/002134/06
JSE code: PAM ISIN: ZAE000005245
("Palabora" or "the Company")
SALIENT DATES AND TIMES AND UPDATED PRO FORMA FINANCIAL INFORMATION REGARDING
THE PROPOSED BROAD-BASED BLACK ECONOMIC EMPOWERMENT ("BBBEE") TRANSACTION
1. Introduction
Shareholders of Palabora ("Shareholders") are referred to the announcement dated
11 June 2010 ("the 11 June 2010 Announcement") whereby Shareholders were advised
that Palabora had entered into a suite of agreements on 10 June 2010 in terms of
which Palabora will dispose of the bulk of its business operations and assets to
Palabora Copper (Proprietary) Limited ("Palabora Copper"), a newly incorporated
Palabora subsidiary ("the Transaction").
Shareholders are advised that a circular to Shareholders setting out the full
details of the Transaction ("the Circular") will be posted to Shareholders
today.
2. Notice of general meeting
Notice is hereby given that the general meeting of Shareholders will be held at
10:00 on Friday, 15 October 2010 at the registered office of Palabora, being 1
Copper Road, Phalaborwa, 1390 to transact the business as stated in the notice
of general meeting included in the Circular ("the General Meeting").
3. Updated pro forma financial effects of the Transaction
Due to the release of the unaudited interim results for the six months ended 30
June 2010 subsequent the 11 June 2010 Announcement, the unaudited pro forma
financial effects of the Transaction have been updated accordingly.
The table below sets out the unaudited pro forma financial effects of the
Transaction on the earnings, headline earnings, diluted earnings, diluted
headline earnings, net asset value and tangible net asset value per Palabora
ordinary share in issue and is based on the published unaudited interim
financial information of Palabora for the six months ended 30 June 2010.
The unaudited pro forma financial effects are prepared for illustrative purposes
only and, due to their nature, may not fairly present Palabora`s financial
position, changes in equity, results of operations or cash flows after the
implementation of the Transaction. The pro forma financial effects are the
responsibility of the Palabora board of directors.
Before the After the
Transaction(3) Transaction(4) Change
Per Palabora share (cents) (cents) (%)
Earnings 632 521 (18)
Headline earnings 630 519 (18)
Diluted earnings 632 491 (22)
Diluted headline earnings 630 488 (23)
Net asset value 4 630 4 622 -
Tangible net asset value 4 622 4 614 -
Actual and weighted average
number of shares in issue (`000) 48 337 48 337 -
Notes and assumptions:
1. It has been assumed for the purposes of the pro forma financial effects
that the Transaction was effective 1 January 2010 for income statement
purposes and 30 June 2010 for the statement of financial position
purposes.
2. The pro forma financial effects have been prepared in accordance with the
accounting policies of Palabora as disclosed in the Company`s 2009 annual
report and which have been applied in the preparation of the published
unaudited interim financial information for the six months ended 30 June
2010, are in accordance with International Financial Reporting Standards
("IFRS").
3. The "Before the Transaction" column has been extracted from Palabora`s
unaudited financial information for the six months ended 30 June 2010 as
announced on Friday, 6 August 2010.
4. The amounts in the "After the Transaction" column represent the financial
results of Palabora for the six months ended 30 June 2010 after the
Transaction based on the following adjustments:
a. incremental transaction costs of R4 million. Full transaction costs amount
to R28 million of which R24 million have already been included in the
historical financial information of prior financial periods up to 30 June
2010. These transaction costs are non-recurring in nature;
b. interest after tax forfeited of R0.1 million on the incremental transaction
costs;
c. a non-recurring IFRS 2 (Share-Based Payments) charge of R49.6 million in
respect of the subscription for shares in Palabora Copper at par by Palabora
BEE Investment Company (Proprietary) Limited. The adjustment is based on a
current valuation. The actual charge recorded in the consolidated Palabora
accounts, when all the suspensive conditions to the Transaction are fulfilled,
may however differ as an updated valuation will be performed on the Closing
Date, as defined in the Circular; and
d. diluted earnings and diluted headline earnings are calculated on the
assumption that the earnings of Palabora Copper will be diluted by 6% (the
Palabora BEE Investment Company (Proprietary) Limited portion) on the day of
the Transaction. Average interest rates were assumed for the calculation.
5. No pro forma adjustment is made for the recurring Minimum Dividends as
defined in the Circular. The Minimum Dividends commence from the end of the
financial year after the year in which the Transaction is implemented and as
such will not have an impact on the pro forma financial information. The
Minimum Dividends will initially be an annual sum of R77 million (escalating
at 5.5% per annum). Based on shareholding in Palabora Copper, the initial
Minimum Dividends, on an annual basis will be allocated as follows:
a. Palabora 74%, R57.0 million
b. Palabora Copper Employee Trust 10%, R7.7 million
c. Leolo Community Trust 10%, R7.7 million
d. Palabora BEE Investment Company (Proprietary) Limited 6%, R4.6 million
The Minimum Dividends are not guaranteed, except for the Minimum Dividend to the
Leolo Community Trust which is guaranteed by Palabora.
No pro forma adjustments have been made for any benefits passed on by the Leolo
Community Trust or Palabora Copper Employee Trust to their respective
beneficiaries. Future benefits will be treated as an expense as and when they
are distributed from the two trusts. Future benefits to employees and the five
communities around Phalaborwa, namely the Mashishimale community, the Makhushane
community, the Maseke community, the Majeje community and the Selwane community
will be subject to future decisions of the respective boards of trustees and
benefits to be awarded cannot be precisely determined currently.
4. Salient dates and times
The salient dates and times in respect of the Transaction are as follows:
2010
Last day to submit forms of proxy in respect of
the General Meeting by 10:00 on Wednesday, 13 October
General Meeting at 10:00 on Friday, 15 October
Results of the General Meeting released on SENS on Friday, 15 October
Results of the General Meeting published in the
press on Monday, 18 October
Notes:
1. Shareholders who hold Palabora shares which have been dematerialised, other
than with "own name" registration, are registered by the Central Securities
Depository Participant ("CSDP") on the sub-register kept by that CSDP will be
entitled to attend the General Meeting in person or if they are unable to
attend and wish to be represented thereat, must complete and return the form of
proxy to the Transfer Secretaries in accordance with the time specified on that
form of proxy.
2. Dematerialised Shareholders, other than with "own name" registration, who
wish to attend the General Meeting should timeously inform their nominees or, if
applicable, their CSDPs or brokers of their intention to attend and vote at the
General Meeting or to be represented by proxy thereat in order for their
nominees or, if applicable, their CSDPs or brokers to issue them with the
necessary letter of representation to do so, or should provide their nominee or,
if applicable, their CSDPs or brokers timeously with their voting instruction
should they not wish to attend the General Meeting in person or be represented
by proxy in order for their nominees to vote in accordance with their
instructions at the General Meeting.
3. The dates and times indicated above are subject to change and such changes
will be released on SENS and published in the press.
4. All times indicated above are South African times.
Phalaborwa
20 September 2010
Joint Corporate Advisers
BRAVURA
and
ROTHSCHILD
Associated with Kagiso
Sponsor
BERNARD JACOBS MELLET
Corporate Finance
Legal Adviser
WEBBER WENTZEL
Attorneys
Independent Auditor and Reporting Accountants
PricewaterhouseCoopers Inc
Chatered Accountants (SA)
Registered Accountants and Auditors
(Registration no 1998/012055/21)
Date: 20/09/2010 16:21:01 Produced by the JSE SENS Department.
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