| Wed 2 Jun 2004, 18:22 | | RENEGOTIATION OF THE ACQUISITION OF JIGMINING (PTY |
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ZENITH CONCESSIONS LIMITED - RENEGOTIATION OF THE ACQUISITION OF JIGMINING (PTY)
LTD
ZENITH CONCESSIONS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/009012/06)
Share code: ZNT ISIN: ZAE000009064
(`Zenith` or `the company`)
RENEGOTIATION OF THE ACQUISITION OF JIGMINING (PTY) LTD (`Jigmining`) TO
INCORPORATE A TRANSACTION WITH A BLACK ECONOMIC EMPOWERMENT (`BEE`) PARTNER
1. Introduction
Radagast Capital (Pty) Ltd is authorised to announce that the terms and
conditions of the agreement whereby the company will acquire the entire
authorised and issued share capital of Jigmining (`the acquisition`) have been
renegotiated so as to provide for the transformation of Zenith into a BEE-
controlled junior mining and beneficiation company. River Sponsors (Pty) Ltd
is authorised to announce that Zenith is in the process of applying to the JSE
to transfer its listing to the Alternative Exchange (`AltX`) of the JSE
Securities Exchange South Africa (`the JSE`) as Jigmining Holdings Limited
subject to the conditions precedent set out in paragraph 5 below.
2. The renegotiated agreement
In terms of the renegotiated agreement, the New Africa Mining Fund (`NAMF`)
will, subject to the aforementioned conditions precedent, facilitate the
participation of BEE companies in Jigmining (`the BEE vendors`) to the effect
that post the acquisition, Zenith will be controlled (50% plus 1 share) by
Historically Disadvantaged South Africans (`HDSAs`) in accordance with the
criteria stipulated in the Minerals and Petroleum Resources Development Act
2002 and the Broad-based Socio Economic Charter for the Mining Industry. The
BEE vendors will effectively obtain control of Jigmining just prior to Zenith
acquiring 100% of the share capital of Jigmining. The purchase consideration
is R10,8 million, which is to be settled through the issue of 540 000 000
consolidated Zenith shares (see paragraph 3 below) at 2 cents per share
(`cps`) (`the consideration shares`).
3. Restructuring of the share capital of the company (`the restructuring`)
In order to give effect to the renegotiated agreement, shareholders will be
requested to approve the restructuring of the company`s share capital on the
following terms:
* the return to Zenith and the cancellation of the 25 000 000 shares issued to
Mr GM Rader in terms of a transaction negotiated by the previous board of the
company (`the Rader shares`);
* the consolidation of the authorised and issued share capital, in a ratio of
1 share for every 4,009198 shares held, and a reduction in par value, which
will in combination reconstruct Zenith`s share capital to 99 770 576
authorised ordinary shares and 60 000 000 issued ordinary shares all with a
par value of 1 cps (`the consolidated shares`), before the acquisition taking
effect; and
* an increase in the authorised share capital to 800 000 000 consolidated
ordinary shares and the issue of the consideration shares, which will increase
the issued share capital of Zenith to 600 000 000 consolidated ordinary shares
after the acquisition.
4. Financial effects
The table below sets out, for illustrative purposes only, the pro forma
financial effects of the acquisition on the unaudited financial statements of
Zenith for the six months ended 31 December 2003. The pro forma earnings
figures illustrate the possible financial effects if the transaction had been
undertaken on 1 July 2003, that is for a period of six months, whereas the pro
forma net asset value figures illustrate the possible financial effects if the
transaction was effected on 31 December 2003. Due to their nature, the pro
forma financial effects may not give a fair reflection of Zenith after the
transaction.
Actual before Pro forma after
the restructuring the restructuring
and before the and after the
acquisition (1) acquisition % Change
Net asset value per
share (cents) (2) 0,90 1,82 104
Net tangible assets value per
share (cents) 0,67 2,71 305
Earnings/(loss) per share (cents) (3) 2,99 0,50 (83)
Headline earnings/(loss) per
share (cents) (0,69) 0,02 >100
Average and weighted average number of
consolidated shares (`000) (4) 66 236 600 000 806
Notes:
1. Per Zenith`s reported unaudited interim financial statements for the six
months to 31 December 2003.
2. Based on Jigmining`s reviewed balance sheet as at 29 February 2004.
3. The reviewed income statement of Jigmining for the year to 29 February 2004
is halved so as to make it consistent with Zenith`s six-month interim period.
An interest rate of 11,5% and a tax rate of 30% are assumed.
4. The shares in issue before and after the acquisition are both adjusted for
the consolidation of Zenith`s share capital (per paragraph 3) in order to make
the numbers directly comparable.
5. Conditions precedent
The acquisition remains subject to the normal conditions precedent applicable
to a transaction of this nature, which conditions are indivisible and include,
inter alia, the following:
* the acquisition by NAMF and its designated BEE partners of a controlling
shareholding in Jigmining and the subsequent approval and signature of the
agreement regulating the acquisition by NAMF`s Investment Committee;
* approval by the requisite regulatory authorities, including the JSE, AltX
Advisory Committee and the Securities Regulation Panel, to the extent
required; and
* approval by the requisite majority of Zenith shareholders, at a general
meeting convened for the purpose, of resolutions relating inter alia to the
restructuring of the company`s share capital, the ratification by shareholders
of the acquisition and the issue and allotment of the consideration shares to
the vendors.
6. Circular to shareholders
A circular containing full details of the acquisition, the BEE transaction
and incorporating revised listing particulars and a notice of a general
meeting of Zenith shareholders, will be prepared and posted to shareholders
within 28 days. Shareholders should note that the final listing of the company
is in the discretion of the JSE and is contingent upon the JSE`s assessment of
the suitability of the company for listing after the implementation proposed
transaction.
7. Sale of shares by a director
In accordance with paragraphs 3.63 to 3.65 of the Listings Requirements,
shareholders are advised that Mr Karl Gribnitz, a director of the company, has
sold 9 075 000 ordinary shares in the company at 2 cps for a total
consideration of R181 500 in an off-market transaction. The sale constitutes
an indirect beneficial transaction, is effective immediately and has been
cleared by the board of directors.
Pretoria
2 June 2004
Corporate advisors
RADAGAST CAPITAL (PROPRIETARY) LIMITED
(Registration number: 2000/030942/07)
BEE transaction facilitators
NEW AFRICA MINING FUND
Managed by Decorum Capital
Partners (Pty) Ltd.
Sponsor
River Sponsors (Pty) Ltd
(Registration number 2000/025913/07)
Restructuring advisors
GANDALF TRUST
MERGER & ACQUISITION SPECIALISTS
Date: 02/06/2004 05:46:04 PM
Produced by the JSE SENS Department
