| Fri 17 Dec 2010, 8:16 | | WEZ - Wesizwe signs definitive transaction agreements and withdrawal of |
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WEZ
WEZ
WEZ - Wesizwe signs definitive transaction agreements and withdrawal of
cautionary announcement
Wesizwe Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2003/020161/06)
JSE code: WEZ ISIN: ZAE000075859
(the "Company" or "Wesizwe")
WESIZWE SIGNS DEFINITIVE TRANSACTION AGREEMENTS IN RESPECT OF THE TOTAL
FINANCING SOLUTION FOR THE DEVELOPMENT OF THE COMPANY`S CORE FRISCHGEWAAGD-
LEDIG PROJECT AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders of Wesizwe are referred to the detailed cautionary announcement
dated 24 May 2010 and further cautionary announcements, the last dated 5
November 2010, regarding the total financing solution for the development of
the Company`s core Frischgewaagd-Ledig Project ("the Project") including,
inter alia, the specific issue of shares for cash ("the Proposed
Transaction").
Wesizwe is pleased to announce that definitive transaction agreements giving
effect to the Proposed Transaction have been signed with Jinchuan Group
Limited ("JNMC"), China-Africa Development Fund ("CADFund") and Micawber 809
(Pty) Limited ("Micawber"), the key terms of which are set out below.
Details of the Proposed Transaction
- Wesizwe will receive an equity injection of US$227,000,000 by means of:
- JNMC and CADFund subscribing for 732,522,177 ordinary shares, which
will constitute 45% of the fully diluted issued share capital of
Wesizwe following the closing of the Proposed Transaction, for a
subscription price amounting to US$200,368,295.
- Micawber, a special purpose vehicle, subscribing for 97,362,283
ordinary shares, which will constitute 6% of the fully diluted
issued share capital of Wesizwe following the closing of the
Proposed Transaction, for a subscription price amounting to
US$26,631,705.
- JNMC, CADFund and Micawber`s combined subscription amounts to a
subscription price of R1.86 per Wesizwe share, at an exchange rate
of US$/R6.82 (closing exchange rate 14 December 2010), and
represents a discount of 16.65% to the 30 day weighted average
traded price on 24 May 2010 and a discount of 0.62% to the 30 day
weighted average traded price on 14 December 2010 (the "specific
issue of shares for cash").
- Micawber is wholly owned by The Wesizwe Empowerment Trust, which has
been established for the purposes of the Proposed Transaction in
order to facilitate increased participation by the Black Economic
Empowerment Shareholders in Wesizwe and whose beneficiaries comprise
of the identifiable Wesizwe Black Economic Empowerment shareholders
as reflected in the public share register as of 30 October 2010.
- A debt component of US$650,000,000, pursuant to which JNMC and CADFund
will secure a US$650,000,000 project finance facility for the Company;
and
- A commitment from JNMC and CADFund, subject to certain limited
exceptions, to commit to provide any additional funding that may be
required in order for operational completion of the Project to be
achieved such that the current Wesizwe shareholders will not be called
upon to provide further funding or be subject to dilution. This funding
will be provided either by JNMC and CADFund directly or through the
provision of third party funding;
Rationale for the Proposed Transaction
The Proposed Transaction represents both a compelling value and strategic
proposition for shareholders, as:
- It provides a total financing solution of US$877,000,000, (consisting of
the above-mentioned combination of debt and equity) for the development
of the Project, thereby:
- providing shareholders an excellent value proposition and a fully-
funded Project;
- ensuring that there will be no further dilution of equity through
the Project`s construction phase;
- allowing shareholders to retain exposure to one of the best quality
undeveloped Platinum Group Metal ("PGM") projects in South Africa,
and with the introduction of JNMC, Wesizwe has secured an
experienced mining, financial and technical partner.
- The provision of shareholder support by JNMC and CADFund increases the
certainty that shareholders should not be called upon for further funding
during the Project`s development.
Conditions precedent to the Proposed Transaction
The Proposed Transaction will be subject to the fulfilment of certain
conditions precedent, which are customary for transactions of this nature.
Such conditions precedent include, inter alia:
- The shareholders of Wesizwe in general meeting passing all resolutions,
as required for the implementation of the Proposed Transaction,
including, inter alia, the resolution approving the specific issues of
shares for cash as described above;
- The Parties obtaining all necessary approvals for implementation of the
Proposed Transaction from the relevant regulatory authorities in South
Africa and the Peoples Republic of China ("China"). The required South
African regulatory and other approvals include, inter alia:
- The approval of the South African Competition Authorities;
- The approval of the Financial Surveillance Department of the South
African Reserve Bank;
- The ordinary shareholders of Wesizwe passing a resolution approving
the waiver of the requirements under Rule 8 of the Securities
Regulation Code on Takeovers and Mergers and the Rules of the SRP
("SRP Code") for JNMC and CADFund to make a mandatory offer; to the
shareholders of Wesizwe;
- The Securities Regulation Panel exempting JNMC and CADFund from
complying with the requirements of Rule 8 of the SRP Code.
Wesizwe shareholders are advised that a circular, providing full details of
the Proposed Transaction, including the specific issues of shares for cash,
will be sent to shareholders in due course.
Unaudited pro forma financial effects of the Proposed Transaction
The table below sets out the unaudited pro forma financial effects of the
Proposed Transaction on Wesizwe. The unaudited pro forma financial effects are
prepared for illustrative purposes only and may not fairly represent Wesizwe`s
results, financial position and changes in equity after following the Proposed
Transaction. For the purposes of the pro forma financial effects, it has been
assumed that the Proposed Transaction took place with effect from 1 January
2010 for the statement of comprehensive income and 30 June 2010 for the
statement of financial position.
The unaudited pro forma financial effects are the responsibility of the
directors of Wesizwe.
Before Adjustment After Change
Profit for the 334,800,854 - 334,800,854 -
year (Rand)
Headline loss (43,282,190) - (43,282,190) -
for the year
(Rand)
Number of shares 797,942,598 829,884,460 1,627,827,058 104.00%
in issue
Weighted average 663,341,690 829,884,460 1,493,226,150 125.11%
number of shares
in issue
Net asset value 2,139,880,000 1,680,481,000 3,820,361,000 78.53%
(Rand)
Intangible 1,284,774,000 - 1,284,774,000 -
assets (Rand)
Net tangible 855,106,000 1,680,481,000 2,535,587,000 196.52%
assets (Rand)
Basic profit per 50.47 (28.05) 22.42 (55.58%)
share (Cents)
Headline loss (6.52) 3.63 (2.90) 55.85%
per share
(Cents)
Net asset value 268.17 (33.48) 234.69 (12.49%)
per share
(Cents)
Net tangible 107.16 48.60 155.77 45.35%
asset per share
(Cents)
Notes:
i. The "Before" financial information is based on Wesizwe`s published
reviewed condensed interim results for the six months ended 30 June 2010.
ii. The "After" basic loss, headline loss and net asset value per share
number have been adjusted to include the issue of the 829,884,460
ordinary shares at R2.025 per Wesizwe share. The share price was based on
US$227,000,000 at an R/US$ exchange rate of R7.403 which prevailed on 1
January 2010.
iii. In terms of the South African Institute of Chartered Accountants` Guide
on Pro Forma Financial Information", no adjustment on earnings was made
for the interest income effect of holding the cash proceeds of the issue
as these proceeds are earmarked for specific development projects and
working capital purposes. In addition, no provision was made for
potential transaction cost.
iv. The effect of the debt component of US$650,000,000 was not brought into
account in preparing the unaudited pro forma financial effects of the
Proposed Transaction as it is anticipated that the facility will only be
utilised at a later stage in the Project`s development.
Withdrawal of Cautionary Announcement
Wesizwe shareholders are no longer required to exercise caution when dealing
in their Wesizwe securities.
Arthur Mashiatshidi, CEO of Wesizwe Platinum said "This event marks a
significant milestone in the process of securing funding for the capital
development of Wesizwe`s core asset - the Frischgewaagd-Ledig Project. We are
pleased that we have progressed the transaction and Wesizwe`s Board of
Directors and management team remain fully committed to working alongside our
new major shareholder through the completion of the Project, and into its
production phase. We believe that Wesizwe shareholders will benefit from this
transaction and they can look forward to meaningful value enhancement."
Melrose, Johannesburg
17 December 2010
Corporate advisor to Wesizwe:
Qinisele Resources (Pty) Limited
Sponsor to Wesizwe:
Investec Bank Limited
Legal advisor to Wesizwe:
Deneys Reitz
Legal advisors to JNMC and CADFund:
Cadwalader, Wickersham & Taft LLP
Werksmans Attorneys
Reporting accountants:
KPMG
Information on Wesizwe:
- A public company incorporated in the Republic of South Africa and its
shares are listed on the JSE Limited;
- Its principal business interest is the development of the PGM mining and
prospecting rights held and operated by its wholly-owned subsidiaries,
Bakubung Minerals (Pty) Limited and Africa Wide Mineral Prospecting and
Exploration (Pty) Limited;
- The Frischgewaagd-Ledig Project feasibility study shows a current
resource of over 13 million PGM ounces and indicates the near-term
potential of producing up to 350 000 PGM ounces a year;
- Maintains 100% ownership of the Frischgewaagd-Ledig Project (Project 2),
and a 45% to 26% shareholding in Maseve Investments 11 (Pty) Ltd as they
existed in the Western Bushveld Joint Venture`s ("WBJV") Projects 1 & 3,
together with Platinum Group Metals (RSA) (Pty) Limited;
- Together with Wesizwe`s participation in WBJV`s Projects 1 & 3, Wesizwe`s
attributable resource base is expected to increase to nearly 18 million
ounces and PGM production capacity to over 415 000 ounces of production
per year.
Information on JNMC and CADFund
JNMC
- A Chinese state owned company under the jurisdiction of the Peoples
Government of Gansu Province, China;
- The largest producer of nickel and PGM`s in China and the largest
producer of refined copper in Northern China;
- Operates an integrated business in non-ferrous metals from mining,
refining and marketing to project engineering and the manufacturing
of mining equipment;
- Actively involved in investment projects outside of China during the
last few years.
CADFund
- Established in June 2007 to implement Chinese President Hu Jintao`s
proposed co-operation policy measures pursuant to the Forum on China-
Africa Cooperation in November 2006;
- The first Chinese investment fund focusing on direct investments in
Africa, providing management, consulting, financial and consultancy
services;
- The total size of fund is US$5 billion with initial phase US$1
billion funded by China Development Bank;
- Promotes mutually beneficial China-Africa cooperation and encourages
market-oriented economic development in Africa that aims to improve
people`s livelihood.
Date: 17/12/2010 08:16:01 Produced by the JSE SENS Department.
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