| Thu 12 Feb 2004, 15:19 | | Proposed specific issue of shares for cash and |
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The Afrikander Lease Limited - Proposed specific issue of shares for cash and
update on Kalgold transaction
The Afrikander Lease Limited
(Incorporated in the Republic of South Africa)
AFL (JSE) AFKDY (NASDAQ)
(Registration number 1921/006955/06)
("Aflease")
(ISIN Number: ZAE000000253
Share Code : AFL)
Proposed specific issue of shares for cash and update on Kalgold transaction
1. Introduction and rationale
Shareholders are informed that Aflease has made good progress in raising
capital to finance the development of its Bonanza South and Modder East projects
and to settle the R137,5 million cash owing to Harmony.as a result of the
acquisition of Kalahari Goldridge Mining Company Limited announced on 7 November
2003 ("the Kalgold acquisition").
In order to meet these obligations the board of directors of Aflease has
resolved to implement a specific issue of 24 000 0000 new Aflease shares to
Randgold and Exploration Limited ("Randgold") ("the specific issue of shares for
cash") on the terms and conditions set out below.
Whilst the implementation of the specific issue of shares for cash will not, in
isolation, enable Aflease to pay Harmony the R137,5 million owing to it, the
specific issue of shares for cash will bolster Aflease"s balance sheet and will
make it easier for Aflease to fulfil its obligation to Harmony.
2. Details of the specific issue of shares
The specific issue of shares will be effected as detailed below.
2.1 Randgold, or its nominee will subscribe for 24 million Aflease shares ("the
initial subscription") and Randgold or its nominee will receive a 3 year
American option to subscribe for a further 24 million Aflease shares at 500
cents per share for a total consideration of R82,5 million equating to
approximately 10% of the issued share capital of Aflease;
2.2 For 18 months from the initial subscription Randgold or its nominee will be
entitled to subscribe for a second tranche of 24 million Aflease shares and
Randgold or its nominee will receive a further 3 year American option to
subscribe for 24 million Aflease shares at 500 cents per share for a total
consideration of R88,5 million;
2.3 Randgold will make a R15 million short-term facility available to Aflease
which, if drawn, will be repayable in Aflease shares or cash, at the election of
Randgold.
Aflease shareholders should note that all 4 steps are part of one composite
transaction, which could result in a maximum (if all options in 2.1 and 2.2 are
exercised) of 96 000 000 Aflease shares being issued to Randgold for a total
cash consideration of R411 million, (equating to approximately 28% of the issued
share capital of Aflease after the implementation of the Kalgold acquisition
(approximately 33% before the implementation of the Kalgold acquisition).
3. Financial effects of the specific issue of shares
Based on the unaudited results for the six months ended 30 June 2003, the pro
forma financial effects of the specific issue of shares on Aflease"s earnings
per share ("EPS"), headline earnings per share ("HEPS") and net asset value per
share ("NAV") are set out below. As the Kalgold acquisition and the related
funding mechanism for settling the consideration have not been finalised, the
effects of the specific issue of shares do not take into account the Kalgold
transaction. This pro forma financial information has been prepared for
illustrative purposes only and because of its nature may not give a true picture
of Aflease"s financial position and results of operations, nor the effect and
impact of the specific issue of shares going forward.
Per Aflease share Before(1) After % Change
Headline and basic EPS (25,29) (20,87) 17,5
(cents) (2)
Fully diluted EPS (23,94) (19,89) 16,9
(cents) (2)
Tangible and intangible 193,72 210,56 8,7
NAV (cents) (3)
Shares in issue 188 569 212 569
073 073
Weighted average shares 183 488 207 488
in issue 113 113
Notes
1. Based on the published consolidated unaudited results of Aflease for the
six months ended 30 June 2003.
2. The "After effects on earnings per share are based on the following
assumptions:
a The specific issue of shares for cash was effective 1 January 2003; and
b The proceeds from the specific issue of shares for cash, net of transaction
costs, were invested at an average after tax rate of 7,5% pa for the six months
to 30 June 2003 until a decision as to the specific application of the proceeds
is finalised.
3. The "After effects on net asset value per share are based on the following
assumptions:
a The specific issue of shares for cash was effective 30 June 2003; and
b Transaction costs were capitalised to share capital.
c No effect has been given to the American option and the second tranche due
to the uncertainty regarding the take up of the option or second tranche and the
timing thereof.
4. Conditions precedent
The specific issue of shares for cash is subject to, inter alia, the following
conditions precedent:
- the approval of the boards of Aflease and Randgold;
- obtaining approval from 75% of Aflease shareholders present and voting in
general meeting; and
- Obtaining the approval of the JSE, SRP and any other regulatory body that
may be required.
5. JSE in full Listing Requirements implications
The JSE Listing Requirements require that the proposed specific issue of shares
be approved by 75% majority of Aflease"s shareholders, excluding Randgold, which
will not be entitled to vote on the resolutions giving effect to the specific
issue of shares.
6. Increase in authorised share capital
In order to implement the proposed specific issue of shares, Aflease"s articles
of association will need to be amended by increasing Aflease"s authorised share
capital from R6 000 000 comprising 300 000 000 ordinary shares of 2 cents each,
to R10 000 000 comprising 500 000 000 ordinary shares of 2 cents each.
The special resolution, approving the proposed amendment to Aflease"s articles
of association is subject to the approval of 75% of Aflease"s shareholders
present.
Aflease has, so far, received irrevocable undertakings (in support of all the
resolutions that may be required to implement the specific issue of shares for
cash) from Aflease shareholders holding 66 662 229 Aflease shares, constituting
approximately 31% of the shares which are eligible to vote at the general
meeting of Aflease shareholders.
7. Update on the Kalgold acquisition
Shareholders are advised that Aflease is progressing the fulfilment of the
conditions precedent to the Kalgold acquisition and that several of the
conditions precedent had been met as at the time of this announcement.
The circular containing details of the Kalgold acquisition, including a
Competent Person"s Report, is currently being prepared and will be posted to
Aflease shareholders upon completion.
It is anticipated that the circular, which will now include details on the
specific issue of shares and a notice of a general meeting of Aflease
shareholders to approve the specific issue of shares and increase in authorised
share capital, will be posted to Aflease shareholders in due course.
Johannesburg
12 February 2004
Sponsor Reporting Accountants
Nedbank Corporate PricewaterhouseCoopers
Date: 12/02/2004 03:15:11 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
