| Wed 15 Dec 2010, 10:08 | | MVL - Mvelaphanda Resources Limited - Announcement regarding the proposed |
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MVL
MVL
MVL - Mvelaphanda Resources Limited - Announcement regarding the proposed
distribution by Mvela resources, to its ordinary shareholders, of 22 218 000
shares in Gold Fields Limited ("Gold Fields")
Mvelaphanda Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1980/001395/06)
Share Code: MVL
ISIN: ZAE000050266
("Mvela Resources")
ANNOUNCEMENT REGARDING THE PROPOSED DISTRIBUTION BY MVELA RESOURCES, TO ITS
ORDINARY SHAREHOLDERS, OF 22 218 000 SHARES IN GOLD FIELDS LIMITED ("GOLD
FIELDS")
1 Introduction
Further to the announcement of 26 November 2010 regarding the successful
conclusion of the Khumama Platinum arbitration proceedings, Mvela Resources
is pleased to announce that it will now proceed with its stated unbundling
strategy, through the distribution, to its ordinary shareholders, of shares
in Gold Fields(the "Gold Fields distribution").
2 Rationale
Mvela Resources has been classified as a "pyramid company" by the JSE
Limited (the "JSE"). The JSE prohibits the listing of pyramid companies and
has accordingly instructed Mvela Resources to remove the pyramid company
structure.
Mvela Resources has traded at a discount to its net asset value ("NAV") for
most of its history as a listed company, primarily due to its pyramid
structure and its limited influence over the strategic and capital
decisions in respect of most of its investments. In 2009, the Mvela
Resources board decided that distributing Mvela Resources` assets to
shareholders was the most appropriate way to unlock the trapped value
within the corporate structure and to satisfy the requirements of the JSE.
The Gold Fields distribution represents the next step in unlocking value
for shareholders.
The Gold Fields distribution will result in Mvela Resources` ordinary
shareholders holding Gold Fields shares directly rather than indirectly via
their Mvela Resources shareholding. Mvela Resources` ordinary shareholders
will accordingly retain their exposure to the underlying assets of (and
will have direct access to dividends and other distributions from) Gold
Fields after the Gold Fields distribution.
3 Gold Fields distribution
Subject to the fulfilment of the condition precedent (as further detailed
in paragraph 5 below), Mvela Resources will distribute 22 218 000 of the 22
218 653 Gold Fields shares held by it, to Mvela Resources` ordinary
shareholders ("participating Mvela Resources ordinary shareholders")
registered as such on the Gold Fields distribution record date ("record
date").
Each participating Mvela Resources ordinary shareholder will accordingly
receive 0.10197 Gold Fields shares for every Mvela Resources ordinary share
held by it ("Gold Fields distribution ratio") on the distribution record
date. This is based on the assumption that all shares in the capital of
Mvela Resources to be issued pursuant to the exercise of unexercised
options under the existing share option scheme, are issued on or before the
record date. If any such shares are not issued on or before the record
date, the Gold Fields distribution ratio will increase to no more than
0.10246:1. The final Gold Fields distribution ratio will be announced on
the Gold Fields distribution finalisation date contemplated in paragraph 6
below.
4 Unaudited pro forma financial effects
The unaudited pro forma financial effects ("the unaudited pro forma
financial information") as of and for the financial year ended 30 June 2010
have been prepared to illustrate the effect of the Gold Fields distribution
(after the sale of 10 million Gold Fields shares announced on 4 November
2010) as if the Gold Fields distribution had occurred on 1 July 2009 for
purposes of earnings per share ("EPS") and headline earnings per share
("HEPS"), and on 30 June 2010 for purposes of NAV and net tangible asset
value ("NTAV"). The unaudited pro forma financial information is presented
for illustrative purposes only and because of its nature, may not give a
fair reflection of Mvela Resources` financial results or financial position
going forward.
The unaudited pro forma financial information has been prepared using
accounting policies that are consistent with IFRS and with the basis on
which the historical financial information of Mvela Resources has been
prepared.
Before After the sale After the Effect of the
(1) of 10 million Gold Fields Gold Fields
Gold Fields distributio distribution
shares (2) n (3) (Change from (2)
to (3))
Basic EPS (cents) (23) (56) (51) 8.9%
Basic HEPS (cents) 10 25 3 (88.0)%
NAV per share (cents) 3 853 3 863 2 757 (28.6)%
NTAV per share 3 853 3 863 2 757 (28.6)%
(cents)
Weighted average 215 064 215 064 215 064 -
number of Mvela
Resources ordinary
shares (`000)
Mvela Resources 215 621 215 621 215 621 -
ordinary shares in
issue at 30 June 2010
(`000)
Notes:
1. Based on the Mvela Resources` published audited financial results for the
year ended 30 June 2010.
2. The After the sale of 10 million Gold Fields shares column refers to the sale
of 10 million Gold Fields shares as announced on SENS on 4 November and is based
on the following principal assumptions:
- EPS and HEPS
2.1) the sale of 10 million Gold Fields shares was effective on 1 July 2009;
2.2) Gold Fields shares were sold in five tranches of 2 million shares each for
a net value of R1.1 billion;
2.3) a once-off loss of R122.8 million was incurred on the disposal of the 10
million Gold Fields shares and the resultant release of deferred tax liability
of R50.6 million and once-off normal tax charge of R33.4 million;
2.4) interest of R64.8 million on the cash proceeds from the disposal of the
Gold Fields shares earning interest of between 6% p.a. and 6.5% p.a (being the
interest rates applicable for actual interest bearing deposits made by Mvela
Resources during 2009/10), and the resultant tax payable of R18.1 million (this
item is recurring in nature);
2.5) dividends of R13.0 million foregone on the 10 million Gold Fields shares
during the June 2010 financial year, which is recurring in nature. Interest
forgone of R0.5 million on the reversal of the dividends is calculated at an
average rate of 6.4% pa before tax and the resultant tax impact of R0.2 million.
- NAV and NTAV
2.6) the sale of 10 million Gold Fields shares was effective on 30 June 2010;
2.7) 10 million Gold Fields shares were sold for net proceeds of R1.1 billion,
resulting in the accrual for CGT of R33.4 million and the release of deferred
tax liability of R29.7 million; and
2.8) reducing the carrying value of the investment in Gold Fields by R1.0
billion.
3. The After the Gold Fields distribution column is based on the following
principal assumptions:
- EPS and HEPS
3.1) the Gold Fields distribution was effective on 1 July 2009;
3.2) a once off profit of R68.9 million recognised upon derecognition of the
Gold Fields distribution shares and the resultant net tax impact of R9.6
million. CGT is calculated at 14% based on a market value of R122.00 per Gold
Fields share as at the last practicable date and a base cost of R82.78 per
share;
3.3) the Gold Fields distribution is effected out of share premium and therefore
no STC is payable;
3.4) reversal of R28.9 million dividends received on the Gold Fields
distribution shares during the 30 June 2010 financial year, which is recurring
in nature;
3.5) interest foregone of R1.2 million based on the interest rates applicable on
interest bearing deposits during 2009/10 due to the reversal of dividends
received and the resultant tax impact of R0.9 million, which is recurring in
nature; and
3.6) estimated costs relating to the Gold Fields distribution of R18.9 million
(being distribution transaction costs of R12.1million plus R6.8 million of STT),
which are once-off in nature.
- NAV and NTAV
3.7) the Gold Fields distribution was effective 30 June 2010;
3.8) derecognising the remaining investment in Gold Fields shares of R2.3
billion and raising the resulting CGT of R122.0 million arising on the Gold
Fields distribution and reversing the related deferred tax amounting to R66
million. The CGT is calculated at 14% based on a market price of R122.00 per
share at the last practicable date and a base cost of R82.78 per share; and
3.9) estimated costs relating to the Gold Fields distribution of R18.9 million
(being distribution transaction costs of R12.1 million plus R6.8 million of
STT), which are once-off in nature.
5 Condition precedent
The Gold Fields distribution is subject to the condition precedent that
Mvela Resources` shareholders in a general meeting pass a resolution
approving the implementation of the Gold Fields distribution.
6 Timetable
The expected salient dates of the Gold Fields distribution are set out
below:
2011
Last day for receipt of proxies for the Tuesday, 11 January
general meeting, by 10:00 on
General meeting of Mvela Resources` held at Wednesday, 12 January
10:00 on
Results of the general meeting released on Wednesday, 12 January
SENS on
Results of general meeting published in the Thursday, 13 January
press on
Expected Gold Fields distribution finalisation Friday, 14 January
date on
Expected last trading day in Mvela Resources` Friday, 21 January
ordinary shares on the JSE Exchange in order
to participate in the Gold Fields distribution
Mvela Resources` ordinary shares trade "ex" Monday, 24 January
the entitlement to the Gold Fields
distribution shares from commencement of
business on
Expected Gold Fields distribution record date, Friday, 28 January
at the close of business on
Expected implementation date of the Gold Monday, 31 January
Fields distribution on
Expected date on which participating Mvela Monday, 31 January
Resources` ordinary shareholders holding their
shares in dematerialised form will have their
accounts at their participant or broker
updated with the Gold Fields distribution
shares on
Expected date on which share certificates in Monday, 31 January
respect of the Gold Fields distribution shares
will be posted, by registered post, at the
risk of the participating Mvela Resources`
ordinary shareholders holding their shares in
certificated form concerned, to participating
Mvela Resources ordinary shareholders on
Notes to the timetable:
1. All dates and times are subject to change by Mvela Resources. Any change will
be released on SENS and published in the South African press.
2. Mvela Resources ordinary shares may not be dematerialised or rematerialised
between Monday, 24 January 2011 and Friday, 28 January 2011, both days
inclusive.
7 Unbundling of shares in Northam Platinum Limited ("Northam")
Consistent with the strategy outlined above, Mvela Resources intends to
unbundle its entire 50.4% holding in Northam during the first half of 2011.
Shareholders will be advised once a formal decision in this regard is taken
by the board.
8 Posting of circular
The circular to shareholders in respect of the Gold Fields distribution
will be posted today.
The circular will also be available online at: www.mvelares.co.za.
15 December 2010
Johannesburg
Financial adviser and sponsor to Mvela Resources
J.P. Morgan
Attorneys to Mvela Resources
Bowman Gilfillan
Independent reporting accountants
PricewaterhouseCoopers Inc.
Date: 15/12/2010 10:08:02 Produced by the JSE SENS Department.
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