| Tue 28 Jun 2011, 13:08 | | ASR - Assore Limited - Assore and Shanduka Resources conclude a |
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ASR
ASR
ASR - Assore Limited - Assore and Shanduka Resources conclude a
transaction which results in the disposal by Shanduka Resources of its
interest in Assore
Assore Limited
(Incorporated in the Republic of South Africa)
(Registration number 1950/037394/06
Share code: ASR ISIN: ZAE0000146932
("Assore")
Shanduka Resources (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/017835/07)
("Shanduka Resources")
ASSORE AND SHANDUKA RESOURCES CONCLUDE A TRANSACTION WHICH RESULTS IN
THE DISPOSAL BY SHANDUKA RESOURCES OF ITS INTEREST IN ASSORE FOR R2.7
BILLION AND FACILITATES A THIRD BROAD BASED BLACK ECONOMIC
EMPOWERMENT ("BBBEE") TRANSACTION
1. HIGHLIGHTS
- Assore and Shanduka Resources, through its wholly-owned subsidiary, Main
Street 343 (Proprietary) Limited ("MS343"), have entered into a transaction
to facilitate a third BBBEE transaction which enables Assore to secure long
term empowerment, whilst simultaneously enabling Shanduka Resources to
realise value on its investment in Assore through the sale of its entire
interest in Assore, in advance of the expiry of the 2014 lock-in period
applicable to these shares
- The 16,464,450 Assore ordinary shares held by Shanduka Resources,
representing an 11.79% interest in Assore, will be acquired and warehoused
by
Main Street 904 (Proprietary) Limited ("MS904"), pending the refinement of a
structure that will see BBBEE groupings benefit through a third BBBEE
transaction ("Third Empowerment Transaction")
- Shanduka Resources will dispose of its Assore shares in advance of the
expiry of the 2014 lock-in period applicable to such shares at a discount to
the current market price, creating an immediate economic benefit for the
Third Empowerment Transaction and ensuring the sustainability thereof, for
the future BBBEE beneficiaries
- Assore supports the acquisition by MS904, as the Third Empowerment
Transaction will enable it to secure BBBEE ownership of 26.1% post the
expiry
of the 2014 lock-in period applicable under its first BBBEE transaction with
Shanduka Resources and, through the discount achieved, reduces the cost of
the Third Empowerment Transaction
2. INTRODUCTION
On 10 November 2005, Assore entered into its first empowerment
transaction, pursuant to which 15.02% of Assore`s issued ordinary share
capital was acquired by Assore`s empowerment partners, being Shanduka
Resources and the Bokamoso Trust ("First Empowerment Transaction"). The
First Empowerment Transaction facilitated Assore`s achievement of the 2009
BBBEE equity ownership target set for mining companies in the Mineral and
Petroleum Resources Development Act ("MPRDA") and the Broad-Based Socio-
Economic Empowerment Charter for the South African Mining Industry ("the
Charter") and its associated Scorecard.
On 1 December 2009, Assore announced a second empowerment transaction,
which resulted in an additional 11.1% of Assore`s issued ordinary share
capital being controlled by the Bokamoso Trust ("Second Empowerment
Transaction"). Pursuant to the First Empowerment Transaction and the
Second Empowerment Transaction, Assore achieved 26% BBBEE equity ownership
as measured under the MPRDA, the Charter and its associated Scorecard.
Shanduka Resources, a wholly-owned subsidiary of Shanduka Group
(Proprietary) Limited ("Shanduka"), holds its 11.79% interest in Assore
through a wholly-owned subsidiary, Main Street 343 ("MS343"). The
investment in 2005 by Shanduka Resources in Assore has yielded attractive
returns to Shanduka and its shareholders, which include several broad-
based beneficiaries.
In terms of the agreements governing the First Empowerment Transaction,
Shanduka Resources is only permitted to sell its Assore shares without the
permission of Assore after 1 May 2014. The opportunity, however, has
arisen for Shanduka Resources to dispose of its investment in Assore
through the sale by MS343 of its entire interest in Assore to MS904, a
special purpose vehicle owned by two independent empowerment trusts set up
by Assore.
As the Third Empowerment Transaction will allow Shanduka Resources to
dispose of its entire shareholding in Assore in advance of 2014 by way of
a single transaction, as well as to facilitate the creation of an
immediate economic benefit and ensure the sustainability of the Third
Empowerment Transaction for Assore`s future BBBEE shareholders, Shanduka
Resources has agreed to dispose of its interest in Assore at a price of
R163.00 per Assore share for approximately R2.7 billion, which represents
a 23% discount to Assore`s 30-day VWAP of R212.91 as at Monday, 16 May
2011, the date on which the offer was first made to Shanduka Resources.
MS904 shall fund the acquisition from Shanduka Resources by way of a third
party loan facility to be advanced to MS904 by The Standard Bank of South
Africa Limited ("Standard Bank"). Assore is pleased to announce that it
has agreed to support MS904 in the acquisition of Shanduka Resources`
11.79% interest in Assore, by guaranteeing MS904`s funding obligations to
Standard Bank for the following reasons:
- The Third Empowerment Transaction secures BBBEE ownership for Assore in
excess of 26% post 2014 as required by the MPRDA, the Charter and its
associated Scorecard
- The shares will ultimately be owned and controlled by and for the
benefit of BBBEE groupings, who will become long-term shareholders in Assore
- The discount achieved on the Assore shares creates an immediate economic
benefit underpinning the Third Empowerment Transaction and ensures the
sustainability of the Third Empowerment Transaction for the future BBBEE
beneficiaries
Assore`s support and financial assistance provided to MS904 is more fully
described in paragraph 4 below and is subject to the fulfilment of the
conditions precedent set out in paragraph 5 below.
3. RATIONALE
Assore is supportive of the broad-based economic imperatives contained in
the MPRDA, the Charter and its associated Scorecard. Assore is of the view
that the Third Empowerment Transaction will provide additional certainty
to Assore by maintaining its BBBEE equity ownership of 26% up to and
beyond 2014 as currently specified under the Charter, and will thus serve
as a cornerstone of its ongoing BBBEE strategy. Assore accordingly
supports MS904 in the acquisition of Shanduka Resources` entire interest
in Assore, on the basis that these shares will be utilised for the
purposes of the Third Empowerment Transaction.
The Third Empowerment Transaction will be implemented in two phases. Phase
I involves the acquisition by MS904 of Shanduka Resources` 11.79% interest
in Assore, from MS343. In Phase II, the independent trusts which currently
own MS904 will be further refined such that BBBEE groupings will become
the ultimate beneficiaries of such trusts.
Assore expects to furnish shareholders with further details pertaining to
Phase II of the Third Empowerment Transaction during the latter half of
2011.
4. OVERVIEW OF SUPPORT AND FINANCIAL ASSISTANCE PROVIDED TO MS904 BY ASSORE
In Phase I of the Third Empowerment Transaction, Standard Bank will lend
to MS904 approximately R2.7 billion to enable it to acquire the Assore
shares from Shanduka Resources. Assore has agreed to provide a guarantee
to Standard Bank for the funding provided to MS904, in the event that
MS904 defaults on its repayment obligations in respect of the loan.
In return for Assore providing such guarantee in favour of Standard Bank,
MS904 has agreed to indemnify Assore against any payments required to be
made by Assore under the aforementioned guarantee, and has, as further
security to Assore, agreed to provide a security cession and pledge in
favour of Assore over the Assore shares acquired by MS904.
Assore has agreed to subordinate any claims which it may have against
MS904 to those claims which Standard Bank may have against MS904 pursuant
to the loan advanced by Standard Bank, for so long as any amounts remain
outstanding thereunder by MS904.
In terms of section 44 of the Companies Act, 2008 (Act 71 of 2008) ("the
Companies Act"), a company is prohibited from granting financial
assistance to any person for the purposes of, or in conjunction with, such
person acquiring shares in such company, other than if authorised by a
special resolution of its shareholders. Assore is of the view that the
guarantee provided by Assore to Standard Bank and Assore`s agreement to
subordinate its claims against MS904 to those of Standard Bank pursuant to
the loan, amounts to the granting by Assore of financial assistance as
contemplated in the Companies Act. Consequently, Assore shareholders will
be required to grant their approval for such financial assistance by way
of special resolution at a general meeting to be convened for this
purpose.
5. CONDITIONS PRECEDENT
The implementation of the financial assistance is subject to the
fulfilment of various suspensive conditions. These include, inter alia:
- the execution of all agreements relating to the financial assistance;
- the approval by the JSE of all documentation to be sent to Assore
shareholders, to the extent required;
- all other relevant regulatory approvals being obtained by all parties,
to the extent required; and
- the special and ordinary resolutions to be proposed in the circular sent
to Assore shareholders, being approved by the requisite majority of Assore
shareholders at the general meeting.
6. SALIENT DATES AND TIMES
Last day to trade Assore ordinary shares on the Tuesday, 2 August
JSE in order to be recorded in the share
register on the record date to be eligible to
vote at the general meeting
Record date Wednesday, 10 August
Last day for receipt of forms of proxy for the Thursday, 11 August
general meeting by 10:00 on
General meeting to be held at 10:00 on Monday, 15 August
Announcement of results of the general meeting Monday, 15 August
on SENS on
Announcement of results of the general meeting Tuesday, 16 August
published in the press on
Anticipated implementation of financial Friday, 26 August
assistance
Notes:
1. The abovementioned dates and times are South African local times and
dates, and are subject to change. Any such material change will be released
on SENS and published in the South African press.
2. If the date of the general meeting is adjourned or postponed, forms of
proxy must be received by no later than 48 hours prior to the time of the
adjourned or postponed general meeting, provided that, for the purposes of
calculating the latest time by which forms of proxy must be received,
Saturdays, Sundays and South African public holidays will be excluded.
7. CIRCULAR TO SHAREHOLDERS AND NOTICE OF GENERAL MEETING
Assore ordinary shareholders are advised that a circular providing
additional information on the provision of financial assistance by Assore
to MS904 for the purchase of 16,464,450 Assore ordinary shares from MS343
and which contains, inter alia, a notice of general meeting and a form of
proxy, will be posted to Assore shareholders on or about 15 July 2011.
The general meeting of Assore shareholders to approve the relevant
ordinary and special resolutions will be held on Monday, 15 August at
10:00 at the registered offices of Assore, being Assore House, 5 Fricker
Road, Illovo Boulevard, Johannesburg.
Johannesburg
28 June 2011
Investment bank and sponsor to Assore
Standard Bank
Attorneys to Assore
Webber Wentzel Attorneys
Transactional communication advisor to Assore
College Hill
Date: 28/06/2011 13:08:07 Produced by the JSE SENS Department.
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