| Mon 18 Jul 2011, 8:00 | | MML - Metmar Limited - Further announcement regarding the acquisition by Metmar |
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MML
MML
MML - Metmar Limited - Further announcement regarding the acquisition by Metmar
METMAR LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/007269/06)
Share code: MML
ISIN code: ZAE000078747
("Metmar" or "the Company")
FURTHER ANNOUNCEMENT REGARDING THE ACQUISITION BY METMAR OF A FURTHER 60 PERCENT
INTEREST IN EASTERN BELT CHROME MINES (PROPRIETARY) LIMITED ("EASTERN BELT
CHROME") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Metmar shareholders ("Shareholders") are referred to the announcement published
by the Company on 24 June 2011 and 27 June 2011 on SENS and in the press,
respectively, ("the Announcement") which sets out details of the proposed
acquisition of a further 60 percent interest in Eastern Belt Chrome ("the
Transaction") and are advised that the unaudited pro forma financial effects of
the Transaction ("Financial Effects") on Metmar`s basic earnings per share
("EPS"), headline earnings per share ("HEPS"), net asset value per share
("NAVPS") and net tangible asset value per share ("NTAVPS") are set out below.
FINANCIAL EFFECTS
The Financial Effects as set out below have been prepared for illustrative
purposes only, to assist Shareholders in assessing the impact of the Transaction
on Metmar`s EPS, HEPS, NAVPS and NTAVPS.
These Financial Effects have been disclosed in terms of the JSE Limited Listings
Requirements and, because of their nature, do not necessarily fairly present
Metmar`s financial position, changes in equity, results of operations or cash
flows after the Transaction. The Financial Effects are the responsibility of the
directors of Metmar.
Before the After the Change
Transaction Transaction (%)
(1) (2)
EPS (cents) 22.2 25.6 (4) 15.3
HEPS (cents) 23.1 26.0 (4) 12.5
NAVPS (cents) 261.8 275.4 (5) 5.2
NTAVPS (cents) 235.2 248.8 (5) 5.8
Weighted average number of shares 210 511 611 210 511 611 -
in issue during the Period
Shares in issue at 28 February 232 440 480 232 440 480 -
2011
Notes:
1 Based on Metmar`s audited results for the year ended 28 February 2011 ("the
Period").
2 Based on the assumption that the Transaction took place on 1 March 2010 for
statement of comprehensive income purposes and 28 February 2011 for
statement of financial position purposes.
3 The financial information relating to Eastern Belt Chrome in calculating
the Financial Effects was extracted from Eastern Belt Chrome`s management
accounts for the year ended 28 February 2011 ("the Management Accounts").
Management of the Company is satisfied with the accuracy of the Management
Accounts.
4 EPS and HEPS have been adjusted to include the following:
a) transaction costs of R265 000, with no taxation adjustment;
b) the fair value adjustment of the initial 20% of Eastern Belt Chrome
purchased by Metmar for R7.2 million, being R12.8 million and deferred
capital gains taxation thereon at 14%, amounting to R1.8 million. This
accounting treatment of the fair value adjustment is required in terms of
IFRS 9 Financial Instruments, which specifies how an entity should classify
and measure financial assets;
c) the interest cost on the purchase consideration of R61.4 million ("the
Consideration") from 1 March 2010 at 9% p.a. together with the taxation
effect thereon at 28%;
d) the pro forma consolidated income of Eastern Belt Chrome for the year
ended 28 February 2011 amounting to R20 928, which takes into account
expenditure of a non-recurring nature and trading income for the last
quarter of the financial year only; and
e) no adjustment has been made for the annuity marketing income that would
have been derived from the offtake of chrome ore from Sefateng Chrome
(Proprietary) Limited for the mining operations at Swartkoppies mine for
the balance of the year.
5. The NAVPS and NTAVPS have been adjusted to include the following:
a) the increase in financial liabilities by the Consideration discounted at
9% p.a. being R60.0 million; and
b) in terms of IFRS (3) Business Combinations, each identifiable asset
acquired and liability assumed of Eastern Belt Chrome has been measured at
its acquisition date at fair value, resulting in an increase in the net
asset value of Eastern Belt Chrome by R31.6 million. During the period
that the Company considered whether to effect the Transaction, a third
party had offered an amount similar to the Consideration paid by Metmar.
6 A detailed purchase price allocation ("PPA") required in terms of IFRS (3)
Business Combinations is an estimate arrived at by management of the
Company for purposes of the Financial Effects and has not yet been reviewed
by the Company`s auditors. All factors will be considered during the period
after the acquisition date to determine whether information obtained after
that date results in an adjustment to this estimate.
CONDITIONS PRECEDENT
The Transaction is still subject to the fulfillment of the conditions precedent
referred to in the Announcement.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the publication of the Financial Effects, the cautionary statement as
set out in the Announcement is hereby withdrawn.
Johannesburg
18 July 2011
Sponsor
One Capital
Attorneys to Metmar
Tabacks
Corporate Law Advisors
Date: 18/07/2011 08:00:08 Produced by the JSE SENS Department.
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