| Thu 5 Sep 2002, 0:00 | | Morgan Stanley Announcement |
|
Petronas International Corporation Ltd
(Incorporated in Labuan, Malaysia)
(A wholly-owned subsidiary of Petroliam Nasional Berhad)
Not for release, publication or distribution in or into Australia,
Canada, Japan or the United States of America.
FIRM INTENTION ANNOUNCEMENT
PICL to Make a Final Cash Offer to Acquire All of Energy Africa`s
Issued Share Capital Not Already Held by Engen for ZAR2.0 BN
1. INTRODUCTION
Petronas International Corporation Ltd ("PICL") intends to make a
final cash offer to acquire the entire issued share capital of Energy
Africa Limited ("Energy Africa" or the "Company"), other than those
shares already held by Engen Limited ("Engen"), PICL or their concert
parties on the date on which PICL declares the Offer unconditional (the
"Offer Shares"), for a cash consideration of ZAR43.75 per Energy Africa
share in cash (the "Offer Price")(the "Offer"). PICL`s subsidiary,
Engen, owns directly or indirectly 56.7 per cent of the issued share
capital of Energy Africa.
2. BACKGROUND TO THE OFFEROR
PICL is a wholly-owned subsidiary of Petroliam Nasional Berhad
("Petronas"), the national oil and gas company of Malaysia. Petronas,
together with its subsidiaries and associated companies, is a fully
integrated oil and gas company engaged in a broad spectrum of upstream
and downstream oil and gas operations and petrochemical operations.
Having invested approximately ZAR5 Bn in relation to its acquisition
of Engen and provided additional capital in respect of Engen`s ongoing
requirements, PICL is already one of South Africa`s largest foreign
direct investors. The Offer represents significant additional foreign
investment in South Africa and confirms further Petronas` long-term
commitment to South Africa.
3. REASONS FOR OFFER
PICL has noted the market`s continued concern and the related
uncertainty created by the limited liquidity available in the Energy
Africa shares.
In addition, the potential for Energy Africa to raise new equity to
fund the expansion of its activities into oil and gas field development
has been the subject of continued market speculation.
PICL believes Energy Africa has reached a critical stage in its
evolution. The Company is confronting a new challenge as it enters a
phase of high development spending. Many of the smaller, independent
exploration companies that have attempted to transform themselves into
development companies have experienced a period of lower and more
volatile shareholder returns. PICL believes that Energy Africa lacks the
scale and diversity to exploit fully both its exploration and
development activities and preserve an attractive risk-return profile.
This, coupled with recent unsuccessful drilling results, has increased
the uncertainty surrounding the Company`s prospects. PICL further
believes that Energy Africa`s ability to fund its substantial
development needs is unlikely to change in the near future.
PICL, together with representatives of Engen, has had discussions
with Energy Africa`s directors and management about the Company`s
liquidity, scale and funding requirements. These discussions have led
PICL to conclude that it will need to become more actively involved in
Energy Africa`s activities, both financially and operationally, if it is
to ensure the future success of Energy Africa`s development business.
The Offer is therefore intended to enable PICL to assimilate the Company
into Petronas` strongly capitalised and integrated operations, while
giving minority shareholders an opportunity to liquidate their
shareholdings at an attractive cash price.
PICL encourages Energy Africa shareholders to accept its Offer,
noting:
* the Offer Price is in excess of the Company`s all-time high share
price of ZAR43.05;
* the Offer Price represents a premium of 25 per cent to the closing
share price prevailing on 4 September 2002 (the last day prior to
this announcement);
* payment of dividends by Energy Africa continues to be unlikely in
the short-term;
* continued high volatility in the financial markets;
* the great uncertainty regarding the Company`s prospects and
direction; and
* the Offer provides Energy Africa shareholders with a mechanism to
realise a premium in a relatively illiquid investment that has
uncertain prospects.
4. TERMS OF THE OFFER
4.1 The Offer Consideration
The Offer will be for a cash consideration of ZAR43.75 per Energy
Africa share. This represents a premium of 25 per cent to the closing
price of ZAR35.00 per Energy Africa share on 4 September 2002 (the last
day prior to this announcement).
The Offer is final and will not be increased.
4.2 Conditions
The Offer will be subject to the following conditions:
4.2.1 the receipt by PICL of valid acceptances in respect of not less
than 90 per cent of the Offer Shares (or, such lesser percentage as PICL
may decide);
4.2.2 PICL not becoming aware prior to the Offer being declared
unconditional of any adverse effect, fact or circumstance which is
material with regard to the present business, continued existence,
assets, revenues or financial position of Energy Africa. For this
paragraph 4.2.2, "material" shall mean any effect, fact or circumstance
which has an adverse effect of 10% or more on Energy Africa`s assets
and/or revenues and/or reserves;
4.2.3 the approvals of the relevant regulatory authorities; and
4.2.4 to the extent necessary, the consents of any third parties.
PICL reserves the right, in its sole and absolute discretion, to amend
and/or waive the conditions set out in paragraph 4.2.1 and 4.2.4 at any
time prior to the closing of the Offer and, in its sole and absolute
discretion, to waive the condition set out in paragraph 4.2.2 prior to
the Offer being declared unconditional. PICL intends to invoke the
provisions of S440K of the Companies Act, No. 61 of 1973, as amended
("S440K"), should the required acceptance level be reached.
5. DELISTING OF ENERGY AFRICA
PICL intends to delist Energy Africa at the earliest opportunity.
6. SHARES HELD BY PICL
PICL controls 58,458,464 Energy Africa shares, held indirectly
through Engen or its wholly-owned subsidiaries, constituting 56.7 per
cent of the issued share capital of Energy Africa.
7. CONFIRMATION OF FINANCIAL RESOURCES
Morgan Stanley South Africa (Pty) Limited has confirmed to the
Securities Regulation Panel ("SRP"), and to the SRP`s satisfaction, that
PICL has sufficient resources to honour its commitments in terms of the
Offer.
8. SPECIAL ARRANGEMENTS
8.1 No arrangements, undertakings or agreements have been concluded
between PICL, Energy Africa or any party acting in concert with either
of them, in relation to the shares which are the subject of the Offer.
8.2 No arrangements, undertakings or agreements (including any
compensation arrangements), which have any connection with, or
dependence on the Offer, exist between PICL, or any concert party, and
any director of Energy Africa or any person who was a director of Energy
Africa during the 12 months prior to the Offer, or any holder of Energy
Africa shares or any person who was a holder of Energy Africa shares
within a period of 12 months prior to the Offer.
9. OFFER DOCUMENT
An offer document will be posted within 30 days from the date hereof.
10.OTHER MATTERS
It is PICL`s intention, if and to the extent permissible, to allow
those investors whose interests in shares of Energy Africa are held in
the form of Global Depositary Receipts to participate in the Offer, by
extending the Offer to them or otherwise.
The Offer is not being and will not be made, directly or indirectly,
in or into, or by use of mails or any means of instrumentality
(including, without limitation, facsimile transmission, telephone and
internet) of interstate or foreign commerce of, or any facilities of a
national securities exchange of, the United States of America, its
territories and possessions, any State of the United States and the
District of Columbia (the "United States") and the Offer will not be
capable of acceptance by any such use, means, instrumentality or
facilities or from within the United States. Accordingly, copies of this
document are not being, and must not be, mailed or otherwise forwarded,
distributed or sent in or into or from the United States and persons
receiving this document (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send it into or from
the United States. Doing so may render invalid any purported
acceptance.
Johannesburg
5 September 2002
Financial adviser Strategic adviser
Morgan Stanley South Africa (Pty) Limited Lambert Energy Advisory
Ltd.
Legal counsel South African counsel
Freshfields Bruckhaus Deringer Webber Wentzel Bowens
South African investment bank
Nedcor Investment Bank Limited
For enquiries, contact:
Petronas South Africa
Azrin Mohd Azmi
Manager: Business Development Sub-Saharan Africa
Phone: +27 (0)21 418 8740
Mobile: +27 (0)82 904 3432
Morgan Stanley:
Beth Mandel
Managing Director
Phone: +27 (0)11 507 0810
Mobile: +27 (0)82 891 4731
Date: 05/09/2002 05:51:26 PM Produced by the JSE SENS Department
