| Mon 13 Feb 2012, 9:02 | | DRD - DRDGOLD Limited - Further announcement regar |
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DRD
DRDD
DRD - DRDGOLD Limited - Further announcement regarding the disposal of DRDGOLD`S
entire interest in Blyvooruitzicht Gold Mining Company Limited to Village Main
Reef Limited and withdrawal of cautionary announcement
DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
JSE Share Code: DRD
ISIN: ZAE000058723
Issuer code: DUSM
NYSE trading symbol: DRD
("DRDGOLD")
FURTHER ANNOUNCEMENT REGARDING THE DISPOSAL OF DRDGOLD`S ENTIRE INTEREST IN
BLYVOORUITZICHT GOLD MINING COMPANY LIMITED ("BLYVOOR") TO VILLAGE MAIN REEF
LIMITED ("VILLAGE") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
DRDGOLD shareholders ("Shareholders") are referred to the announcement
published on the Securities Exchange News Service on 8 November 2011 and in
the financial press on 9 November 2011 ("Announcement"). In the
Announcement, Shareholders were advised that DRDGOLD had received and
accepted, on a non-binding and in-principle basis, a non-binding expression
of interest from Village ("EOI") in terms of which Village had expressed an
interest in acquiring DRDGOLD`s entire interest in Blyvoor.
Pursuant to the EOI, DRDGOLD, Village, Blyvoor and Business Venture
Investments No 1557 (Proprietary) Limited (a wholly owned subsidiary of
Village) ("Purchaser") entered into a sale of shares and claims agreement
("Agreement") on 11 February 2012.
In terms of the Agreement, DRDGOLD has agreed to sell its entire
shareholding in Blyvoor (which amounts to 74% of the total issued ordinary
share capital of Blyvoor) ("Sale Shares") and its working capital and
shareholder loan claims against Blyvoor ("Sale Claims") to the Purchaser
("Transaction").
The Transaction is divided into the Part A Sale and the Part B Sale. In
terms of the Part A Sale, the Sale Claims are sold to the Purchaser and in
terms of the Part B Sale, the Sale Shares are sold to the Purchaser.
The rationale for the Transaction was set out in the Announcement.
2. DETAILS OF THE TRANSACTION
2.1 Purchase Consideration
The purchase consideration payable in respect of the Sale Claims and
the Sale Shares shall be discharged by Village through the issue of 85
714 286 new ordinary shares in Village ("Village Shares") at an issue
price of R1.75 per Village Share ("Consideration Shares") and an
amount of R1 payable in cash by Village, respectively. The current
value of the Consideration Shares, calculated with reference to the 30
day volume weighted average price ("VWAP") per Village Share up until
and including Friday, 10 February 2012, is approximately R192 million.
2.2 Part A Sale
The Part A Sale is subject to the fulfilment or waiver (if
applicable), of the following conditions precedent ("Part A Conditions
Precedent"):
2.2.1 by not later than 17h00 on 30 May 2012, the Savuka transaction
agreements (in terms of which Blyvoor will, inter alia, enter
into a sale of mining right agreement with AngloGold Ashanti
Limited in respect of the portion of the West Wits Mining Right
that relates to the Savuka gold mine) having been concluded, to
the reasonable satisfaction of the Purchaser;
2.2.2 by not later than 17h00 on 30 March 2012, an escrow agreement,
governing the escrow arrangement more fully described in
paragraph 2.2.4 below, has been concluded and becomes
unconditional save for any condition requiring the unconditional
operation of the Agreement; and
2.2.3 by not later than 17h00 on 30 May 2012, the South African
Competition Authorities have unconditionally approved the
Transaction, or conditionally approved it on terms and conditions
which each of the Purchaser and DRDGOLD confirm in writing to the
other to be acceptable.
Upon fulfilment, or waiver (if applicable), of the last of the Part A
Conditions Precedent ("Part A Closing Date"), DRDGOLD will:
2.2.4 transfer the Sale Claims to the Purchaser and Village will issue
the Consideration Shares to DRDGOLD, on the basis that 65 714 286
of the Consideration Shares will be held directly by DRDGOLD
whilst the remaining 20 000 000 Consideration Shares ("Escrow
Shares") will be held by an escrow agent as nominee for DRDGOLD
pending the outcome of the Part B Conditions Precedent (as
defined and set out in paragraph 2.3 below);
2.2.5 appoint the Purchaser as its agent to render the corporate
services on behalf of DRDGOLD under the existing Corporate
Services Management Agreement between DRDGOLD and Blyvoor ("Agent
Appointment"); and
2.2.6 cede to the Purchaser its rights to receive any dividend declared
by Blyvoor in respect of the Sale Shares ("Dividend Cession").
2.3 Part B Sale
The Part B Sale is subject to the fulfilment, or waiver (if
applicable), of the following conditions precedent ("Part B Conditions
Precedent"):
2.3.1 by not later than 17h00 on the second anniversary of the
signature date of the Agreement, the Department of Mineral
Resources ("DMR") has granted the conversion of Blyvoor`s old
order mining right and the new order mining right has been
notarially executed and registered in the Mining Titles Office
("Conversion"); and
2.3.2 by not later than 17h00 on the third anniversary of the signature
date of the Agreement, the DMR has unconditionally approved the
transfer of DRDGOLD`s interest in Blyvoor to the Purchaser in
terms of section 11 of the Mineral & Petroleum Resources
Development Act, No 28 of 2002 or conditionally approved it on
terms and conditions which each of DRDGOLD and the Purchaser
confirms to be acceptable ("Section 11 Approval").
Upon fulfilment of the Part B Conditions Precedent, the Escrow Shares
together with any accrued dividends thereon will be released to DRDGOLD and
the Sale Shares will be transferred to the Purchaser.
The Agreement provides for the possibility that Conversion fails to take
place, or that Conversion takes place but Section 11 Approval is not
obtained.
In the event that either of these circumstances occurs, the Agreement
envisages a number of outcomes which are primarily determined by reference
to the reasons for the failure of the Conversion and/or the failure to
obtain Section 11 Approval.
The outcomes set out in the Agreement determine whether:
- the sale of the Sale Shares is implemented and the Sale Shares are
transferred to the Purchaser;
- a portion of the Sale Claims revert to DRDGOLD;
- the Escrow Shares together with any accrued dividends thereon are
released to DRDGOLD or to the Purchaser;
- the Agent Appointment continues or is terminated; and/or
- the Dividend Cession is cancelled.
It should be noted that, regardless of the outcomes referred to above,
DRDGOLD will retain 65 714 286 of the Consideration Shares issued directly
to it on the Part A Closing Date unless the Conversion is refused during
the interim period (i.e. the period commencing on the earlier of (i) 2 May
2012 and (ii) the Part A Closing Date and terminating on a date occurring 6
months thereafter), in which event the Transaction will be unravelled and
restitution will take place.
Shareholders will be informed of the relevant outcome should either of the
circumstances contemplated above occur.
3. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The table below sets out the unaudited pro forma financial effects of the
Transaction ("Financial Effects") based on the published audited results of
DRDGOLD for the year ended 30 June 2011 ("Audited Results"). The Financial
Effects have been prepared for illustrative purposes only, in order to
provide information about how the Transaction might have affected
Shareholders had it been implemented on the dates indicated in the notes
below. Due to their nature, the Financial Effects may not fairly present
the financial position or the effect on future earnings of DRDGOLD after
the Transaction. The preparation of the Financial Effects is the
responsibility of the board of directors of DRDGOLD.
Before the After the %
Transaction( Transaction change
1) (2)
Attributable (loss)/earnings per share (75) 45(3) 160.0
("EPS") (cents)
Headline earnings per share ("HEPS") 28 22(3) (21.4)
(cents)
Net asset value per share ("NAV") 324 349(4) 7.7
(cents)
Net tangible asset value per share 435 418(4) (3.9)
("NTAV") (cents)
Weighted average shares in issue 384 884 384 884 -
(`000)
Number of shares in issue (`000) 384 884 384 884 -
Notes and assumptions:
1. Based on the Audited Results.
2. The Financial Effects have been prepared on the assumption that the
Transaction took place on 1 July 2010 for consolidated statement of
comprehensive income purposes and on 30 June 2011 for statement of
financial position purposes and that the Part A Conditions Precedent
and Part B Conditions Precedent were fulfilled.
3. The "After the Transaction" EPS and HEPS were arrived at after taking
into account:
- the deconsolidation of Blyvoor`s contribution to earnings and
headline earnings from the Audited Results, being a loss of
R371.4 million;
- a net profit on the sale of the Sale Shares and Sale Claims of
R94.728 million being realised, based on a value per Village
Share of R2.24, being the 30 day VWAP of a Village Share up until
and including Friday, 10 February 2012; and
- estimated costs directly attributable to the Transaction of R4
million.
4. The "After the Transaction" NAV and NTAV were arrived at after taking
into account:
- the receipt by DRDGOLD of the Consideration Shares which shall be
held by DRDGOLD as an investment after the conclusion of the
Transaction.
4. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to this announcement, Shareholders are advised that they no longer
need to exercise caution when dealing in DRDGOLD`s securities.
Johannesburg
13 February 2012
Corporate Advisor and Transaction Sponsor
One Capital
Attorneys
Cliffe Dekker Hofmeyr Inc.
Date: 13/02/2012 08:30:02 Produced by the JSE SENS Department.
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