| Fri 23 Aug 2002, 0:00 | | New Mining Corporation Limited - Company Announcem |
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New Mining Corporation Limited - Company Announcement
NEW MINING CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1933/004523/06)
JSE Share code: NEW ISIN: ZAE000017430
("NMC")
JCI LIMITED
(Formerly Consolidated African Mines Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1894/000854/06)
(JSE Share code JCD ISIN: ZAE000039681)
("JCI")
* DISPOSAL BY NMC OF CERTAIN NON-MINING ASSETS TO JCI LIMITED
* ODD-LOT OFFER TO SMALL SHAREHOLDERS IN NMC
1. INTRODUCTION
1.1 NMC, led by Executive Chairman Sello Rasethaba, is an established and
recognised Empowerment Company in the resource and mining industry and the
empowerment partner or the JCI group.
1.2 It was announced in the press on 25 July 2002 that NMC would acquire an
additional 7,3% interest in JCI ("the acquisition").
1.3 In a further step in divesting of non-mining assets, NMC proposes to dispose
of certain non-mining investments to JCI in exchange for the transfer to NMC of
the 130 000 000 variable rate redeemable convertible participating "A"
preference shares of 69,69 cents each ("the "A" Prefs") held by JCI in NMC ("the
disposals").
1.4 After the acquisition and the disposals, NMC`s main assets will comprise of
various mineral rights, an investment in JCI of approximately 12,1% (after the
transactions announced by JCI on 20 April 2002 and the acquisition of an
additional 7,3% interest in JCI), as well as a 50% interest in Let?seng
Investment Holdings South Africa (Proprietary) Limited ("Let?seng "), the
holding company of the Let?seng Diamond mine in the Kingdom of Lesotho ("the
Let?seng diamond mine"). The only non-mining investment to be retained by NMC
will be its 10% interest in Startrack Communications Africa (Proprietary)
Limited.
1.5 It is NMC`s objective to develop and enhance, in conjunction with JCI, its
profitability through the maintenance and ongoing development of meaningful
relationships and transformation partnerships and the exploitation of
opportunities in the resources and mining industry through the involvement of
its major shareholders, which include Matodzi Mining and Energy, Midland Molefe
Resources, Economic Equity Investments and SACTWU.
1.6 With regard to NMC`s shareholder profile, approximately 79% of NMC`s
shareholders hold less than 500 NMC shares each. These shareholders hold, in
aggregate, only 0,3% of NMC`s issued shares. To reduce the number of small
shareholders in an equitable way, thereby significantly reducing NMC`s recurring
shareholder administrative costs, NMC proposes the implementation of an odd-lot
offer to shareholders holding less than 500 NMC shares.
2. THE DISPOSALS
2.1 Terms
2.1.1 Further to the cautionary announcement published in the press on 4 July
2002, as renewed in the acquisition announcement, PSG Investment Bank Limited is
authorised to announce that NMC has entered into an agreement with JCI in terms
of which NMC will dispose, with effect from 31 July 2002 ("the effective date"),
subject to the conditions precedent set out in paragraph 2.5 below ("the
conditions precedent"), of the following assets to JCI ("the disposals", or,
depending on the context, "the acquisitions"):
2.1.1.1 1 007 900 ordinary shares in Zarara Energy Limited ("Zarara")
constituting approximately 3,7% of the entire issued ordinary share capital of
Zarara, for a consideration of R1,70 per share, ie. a total consideration of R1
713 430;
2.1.1.2 11 592 500 linked units in Rand Leases Properties Limited ("RLP"),
constituting approximately 14% of the entire issued linked unit capital of RLP,
for a consideration of R1,80 per linked unit, ie. a total consideration of R20
866 500;
2.1.1.3 NMC`s claim on loan account against Consolidated Mining Management
Services Limited ("CMMS") of R30 000 000; and
2.1.1.4 the entire issued share capital of and claims against Tavlands
(Proprietary) Limited for a consideration of R38 026 130.
2.1.2 The aggregate consideration for the disposals of R90 606 060 will be
satisfied by the transfer to NMC of the "A" Prefs, with effect from the
effective date.
2.2 Rationale for the disposals
It has for some time been NMC`s stated intention to divest of its non-mining
assets, thereby continuing the process of transforming the company into a
focused, mining resource business. After implementation of the disposals, NMC`s
major investments will be its 12,1% interest in JCI and its effective 43%
interest in the Let?seng diamond mine.
2.3 Pro forma financial effects of the disposals for NMC
Set out below are the pro forma financial effects of the disposals on the
earnings, headline earnings, net asset value and net tangible asset value per
NMC share, based on the assumptions that:
2.3.1 for purposes of the earnings and headline earnings per share calculations:
- the disposals were effective during the financial year ended 31 March 2002;
and
- the "A" Prefs were cancelled with effect from 1 April 2001;
2.3.2 for purposes of the net asset value and tangible net asset value per share
calculations, the disposals were effected on 31 March 2002.
Audited Pro forma
Before After Change
(cents)(1) (cents) (%)
Loss per share (3,0)(2) (3,8) (26,7)
Headline loss per share (1,9)(3) (2,7) (42,1)
Net asset value per share at 31 March 2002 33,1(4) 42,2 27,5
Tangible net asset value per share at
31 March 2002 33,1(4) 42,2 27,5
(1) Extracted or compiled from the audited consolidated results of the NMC
group for the financial year ended 31 March 2002.
(2) Based on a weighted average number of 149 672 589 NMC shares in issue
during the financial year ended 31 March 2002 and on an attributable loss of R4
454 000 for the year then ended.
(3) Based on a weighted average number of 149 672 589 NMC shares in issue
during the financial year ended 31 March 2002 and on a headline loss of R2 813
000 for the year then ended.
(4) The net asset value and tangible net asset value per share before the
disposals are based on the total shareholders` equity of R206,193 million at 31
March 2002 less the book value of the "A" Prefs of R90,606 million, but
including the 200 million redeemable convertible "B" preference shares in issue
and the book value of R139,4 million in respect of such "B" preference shares,
as these preference shares participate pari passu with the ordinary shares in
issue with regard to a return of capital on a winding-up of NMC.
2.4 Pro forma financial effects of the acquisitions for JCI
Set out below are the pro forma financial effects of the disposals on the
earnings, headline earnings, net asset value and tangible net asset value per
JCI share, based on the assumptions that:
2.4.1 for purposes of the earnings and headline earnings per share calculations:
- the disposals were effective during the financial year ended 31 March 2002;
and
- the "A" Prefs were cancelled with effect from 1 April 2001;
2.4.2 for purposes of the net asset value and tangible net asset value per share
calculations, the acquisitions were effected on 31 March 2002.
Audited Pro forma
Before After Change
(cents)(1) (cents) (%)
Loss per share (44,1)(2) (44,8) (1,6)
Headline loss per share (24,5)(3) (24,3) 0,8
Net asset value per share at 31 March 2002 36,0 36,0 -
Tangible net asset value per share at
31 March 2002 32,3 32,3 -
(1) Extracted from the audited consolidated results of the JCI group for the
financial year ended 31 March 2002.
(2) Based on a weighted average number of 670 059 708 JCI shares in issue
during the financial year ended 31 March 2002 and on an attributable loss of
R295 812 000 for the year then ended.
(3) Based on a weighted average number of 670 059 708 JCI shares in issue
during the financial year ended 31 March 2002 and on a headline loss of R164 300
000 for the year then ended.
2.5 Conditions precedent
2.5.1 The disposals are subject to:
2.5.1.1 regulatory approvals of the disposals being received, to the extent
required, from the JSE Securities Exchange South Africa ("the JSE") and the
Securities Regulation Panel; and
2.5.1.2 approval from the Exchange Control Department of the South African
Reserve Bank for the transfer of certain of the "A" Prefs from Discus Limited, a
wholly-owned subsidiary of JCI, to JCI prior to final implementation of the
disposals; and
2.5.1.3 NMC shareholders in general meeting passing the necessary resolutions to
approve the disposals and authorise the effective buy-back by NMC of the "A"
Prefs and the subsequent registration of any special resolutions by the
Registrar of Companies.
2.5.2 The acquisitions do not require JCI shareholder approval as the aggregate
monetary value of the acquisitions is not of a size sufficient to require such
approval in terms of JSE Listings Requirements.
2.6 Independent opinion
Charles Orbach & Company has been appointed to advise the directors of NMC on
whether or not the terms of the disposals are fair and reasonable to NMC
shareholders. Charles Orbach & Company`s opinion will be included in the
circular to NMC shareholders as contemplated in paragraph 4 below.
3. ODD-LOT OFFER TO SMALL NMC SHAREHOLDERS
3.1 Introduction
NMC has 149 672 587 shares in issue, of which only 460 404 shares are held by
shareholders who hold less than 500 shares ("odd-lot holdings"). The odd-lot
holdings represent 0,31% of NMC`s shares in issue and 79,1% of the number of
shareholders in the company. The directors of NMC wish to reduce the substantial
administration costs associated with these odd-lot holdings and have accordingly
resolved to implement an odd-lot offer.
3.2 Terms and mechanics
3.2.1 All shareholders who hold less than 500 shares on a date to be announced
will be offered the opportunity to elect:
- to sell their odd-lot holdings at the offer price ("the cash alternative"); or
- to purchase a sufficient number of additional shares at the offer price in
order to increase their holdings to 500 shares ("the purchase alternative"); or
- to retain their odd-lot holdings.
3.2.2 The price of the odd-lot offer will be the weighted average trading price
of NMC shares on the JSE over the five trading days ending on a date to be
determined ("the offer price") and will be published on SENS.
3.2.3 The holdings of shareholders holding less than 500 shares on the record
date who do not make an election will be sold either to those odd-lot holders
who elect the purchase alternative or to NMC, as the case may be.
3.2.4 Odd-lot holdings being offered for sale in terms of the cash alternative
or in respect of which the compulsory sale contemplated in paragraph 3.2.3 above
will apply, will, in the first instance, be sold to odd-lot holders who elect to
purchase additional shares in terms of the purchase alternative and, thereafter,
to the company in terms of its general authority to repurchase shares.
3.2.5 To the extent that there are insufficient shares to satisfy the
requirements of those odd-lot holders who elect the purchase alternative, NMC
will, in terms of its general authority to issue shares for cash, issue new
shares to the odd-lot holders in question at the offer price.
3.3 Salient dates and times
An announcement containing the salient dates and times for implementation of the
odd-lot offer will be published on SENS and in the press in due course.
3.4 Conditions precedent
The implementation of the odd-lot offer is subject to such special and ordinary
resolutions as may be required for implementation of the odd-lot offer, as will
be set out in the notice of general meeting which will be attached to and form
part of a circular to shareholders, referred to in paragraph 4 below, being
approved by shareholders and the registration of all special resolutions by the
Registrar of Companies.
3.5 Financial effects
The odd-lot offer and the resultant potential repurchase by NMC of any NMC
shares and the potential issue of any new NMC shares in terms of the odd-lot
offer are not expected to have any material effect on the earnings and headline
earnings per share, or on the net asset value and tangible net asset value per
share of the company.
4. CIRCULAR TO NMC SHAREHOLDERS
A circular setting out details regarding the acquisition, the disposals
(including the effective buy-back by NMC of the "A" Prefs) and the odd-lot offer
and incorporating a notice of general meeting of NMC shareholders, is being
prepared and will, subject to approval by the JSE, be despatched to shareholders
within 28 days hereof.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement published in the press on 25 July 2002 (as part of
the acquisition announcement) is hereby withdrawn.
Johannesburg
23 August 2002
Investment bank
PSG Investment Bank
Reporting accountants and
independent advisers to NMC
Charles Orbach and Company
Attorneys
Tabacks
Sponsor to NMC
River Sponsors (Pty) Ltd
Registration number 2000/025913/07
Sponsor to JCI
Corpcapital
Corporate Finance
Date: 23/08/2002 05:16:00 PM Produced by the JSE SENS Department
