| Mon 2 Jul 2001, 0:00 | | Rrm Investment Holdings Limited - Announcement |
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RRM Investment Holdings Limited
(Registration number 1987/004368/06)
("RRM")
* Acquisition by RRM of Micofin Resources (Pty) Limited ("Micofin")
* Cautionary announcement
1. Introduction
LPC Manhattan Sponsors (Pty) Limited is authorised to announce that in terms
of an agreement dated 26 June 2001 ("the acquisition agreement"), RRM has,
subject to the fulfilment or waiver, as the case may be, of the conditions
precedent referred to in paragraph 7 below, ("the conditions precedent"),
acquired 100% of the issued share capital of and loan accounts claims
against Micofin with effect from 1 August 2001 ("the acquisition").
2. Nature of Business
Micofin is active in mineral resources development in southern Africa and
owns interests in copper and gold prospects in the Republic of Namibia via
its subsidiary companies. RRM and its subsidiaries ("the Group"), will focus
on the further development of selected mineral resources in southern Africa,
on which a considerable amount of exploration and development work has
already been completed. It will be the policy of the Group to undertake
further exploration work on mining prospects to enable resources to be
defined, and scoping and feasibility studies to be completed in order to
take each proposal to bankable feasibility stage if possible. In this way it
is intended that a number of mineral deposits in southern Africa will become
operational mines. Micofin Holdings (Pty) Limited ("Micofin Holdings"),
which is one of the vendors of Micofin, intends continuing its traditional
business of providing advice and assistance to the mining and related
industries in the structuring and raising of finance.
3. Rationale for the acquisition
Southern Africa is rich in minerals, certain of which have been relatively
underexploited due mainly to limited funding. There are approximately 300
small mining and exploration companies listed on the Australian Stock
Exchange - many of which have yielded high returns for their investors - and
only 15 on the JSE Securities Exchange South Africa ("JSE"). The Group,
which has a strong management team with a wealth of experience in the mining
sector, will focus on mining resource development opportunities in southern
Africa.
4. Salient terms of the acquisition
RRM has, subject to the conditions precedent set out below, acquired the
entire issued share capital of and shareholders claims on loan account
against Micofin, with effect from 1 August 2001 for a net purchase
consideration of R49 625 000 ("the purchase consideration"). The purchase
consideration will be settled by way of a new issue of shares in RRM and a
cash payment of R1 500 000.
It is proposed that the existing ordinary share capital of RRM be altered as
follows:
- the 8 million listed convertible preference shares in issue be converted
to ordinary shares on a one-for-one basis;
- the increased issued share capital amounting to 189 870 808 ordinary
shares of one cent each in RRM be consolidated on a one-for-two basis
resulting in 94 935 404 ordinary shares of 2 cents each in issue; and
- an amount of R48 125 000 of the purchase price for Micofin be satisfied
by the issue of 192 500 000 new ordinary shares to be issued at an issue
price of 25 cents per share.
5. The Namibian Stock Exchange ("NSX")
The Group intends to apply for a listing of RRM on the Namibian Stock
Exchange by way of a secondary listing.
6. Financial effects
RRM's current net asset value is R3,7 million or approximately 4 cents per
share after a consolidation on a one-for-two basis and the conversion of
preference shares into ordinary shares. Due to the nature of Micofin's
business, being a new exploration company, the financial effects of the
acquisition will be impossible to calculate. However, the investment is
expected to make a significant contribution to RRM's net asset value and
total return per share in the medium to long term.
7. Conditions precedent
The acquisition is subject to inter alia, the fulfilment of the following
conditions precedent:
- the successful completion of a due diligence exercise by RRM;
- the completion of reports by a competent person on the mineral assets
being acquired;
- the receipt within 60 days of this announcement of irrevocable
commitments from institutional investors to subscribe for no less than R40
million of new ordinary shares in RRM ("the subscription");
- approval of the JSE, the NSX, the Securities Regulation Panel and other
regulatory bodies; and
- the approval, to the extent necessary, of the shareholders of RRM of all
of the transactions contemplated above.
8. CAUTIONARY
Shareholders are advised to exercise caution in dealing in their ordinary
shares and/or convertible preference shares until the conclusion of the
subscription, which is expected to take place within approximately six weeks
from the date of this announcement.
29 June 2001
Johannesburg
Sponsor to RRM
LPC Manhattan Sponsors (Pty) Limited
(Registration number 1999/024792/07)
Attorneys to RRM
Webber Wentzel Bowens
Attorneys to Micofin
MCMXCIII
Brink Cohen Le Roux & Roodt Inc
Attorneys
Reg No 1993/004501/21
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