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Aflease Gold And Uranium Resources Limited - BEE Transaction By Aflease
Aflease Gold and Uranium Resources Limited
(Formerly The Afrikander Lease Limited)
(Incorporated in the Republic of South Africa)
AFL (JSE) AFLUY (NASDAQ)
(Registration number 1921/006955/06)
ISIN: ZAE000061461 Share Code : AFL
(`Aflease` or `the Company`)
BEE TRANSACTION BY AFLEASE
1. Introduction
Further to the cautionary announcement dated 28 January 2005, Aflease
shareholders are advised that the Company has entered into a Memorandum of
Understanding (`MOU`) with Micawber 397 (Proprietary) Limited (Registration No.
2005/000352/07) (`Micawber`) in terms of which Aflease will sell an undivided
26% share (`Micawber share`) of its mineral and mining assets (`the Assets`) to
Micawber, a company 100% owned by historically disadvantaged South Africans
(`the Proposed transaction`).
2. Micawber shareholders
The initial shareholders of Micawber will be historically disadvantaged South
Africans (`HDP`s`) and their respective shareholdings in Micawber will be as
follows:
Aflease Employees Trust 25%;
Africa Vanguard Resources 25%;
Indalo Resources 25%;
Emseni Resources 15%;
Umlilo Mining 5%; and
Magumo Investments 5%.
The Aflease Employees Trust will have as its beneficiaries HDP employees of
Aflease and will provide for their participation through Micawber in the
unincorporated joint venture referred to in paragraph 0 below (`the JV`).
3. Rationale for the Proposed transaction
The purpose of the Proposed transaction is to provide Aflease with a Black
Economic Empowerment partner in compliance with the requirements of the Broad-
Based Black Economic Empowerment Act, 2003, the Codes of Good Practice published
in terms thereof and the Broad-Based Socio-Economic Empowerment Charter for the
South African Mining Industry, developed in terms of Section 100 of the Mineral
and Petroleum Resources Development Act, 2002 (`the BEE Legislation`).
4. Details and terms of the Proposed transaction
4.1 The Proposed transaction
Aflease and Micawber will enter into a joint venture agreement, which
agreement will contain terms customary for this type of arrangement in
the mining industry, to create and manage the JV and to which Micawber
will contribute the Micawber share and Aflease its 74% balance of the
Assets.
4.2 Micawber
Aflease will not be a shareholder in Micawber but will be a party to
Micawber`s shareholders agreement. The shareholders agreement will
provide for:
- the management of Micawber and the funding thereof;
- the continued compliance by Micawber and its shareholders with BEE
legislation;
- pre-emptive rights in favour Micawber shareholders; and
- terms normally contained in shareholders agreements of this nature.
4.3 The JV
The JV will enter into a Management and Skills Transfer Agreement with
Aflease in terms of which Aflease will provide full administrative,
management and mining services to the JV. The management committee of
the JV will oversee the management of the affairs and operations of the
JV.
The parties to the JV will contribute to the funding of the JV in
proportion to their respective participation interests in the JV.
Should Micawber at any time not be able to contribute any portion of the
funding which it is obliged to make available to the JV, then Aflease
will contribute the amount of any shortfall as a special loan to the JV.
Aflease will then be entitled to the payment of interest by the JV in
respect of such shortfall at the same rate and payment terms obtained by
Aflease in the international lending market.
Aflease will make available to the JV whatever equipment and other
resources which the JV may require for the purpose of the proper
management and conduct of its business and operations and which do not
form part of the Assets. This will be done in terms of an Asset Rental
Agreement.
4.4 Purchase price
The purchase price for the Micawber share shall be an amount equal to
26% of the market capitalisation of Aflease at the effective date of
Aflease and Micawber entering into a Sale Agreement, less the value of
any assets of Aflease excluded from the sale (`Purchase price`) being
Aflease`s non-mining assets.
4.5 Payment of the Purchase price
The Purchase price will be funded through an interest free loan granted
by Aflease to Micawber, in terms of which Micawber will be required to
make payment in cash of a minimum of 20% of the Purchase price within
three years of the date of receipt by Micawber of the first dividend
payment to it by the JV (`First payment`). Thereafter Micawber will be
required pay a minimum of 20% of the Purchase price in cash in each
three year period following the First payment.
The Purchase price shall be adjusted on each occasion when a payment in
respect thereof is made, to the lower of:
- an amount equal to 26% of the net present value of the Assets, as
determined by an independent merchant bank chosen in writing by Micawber
out of three independent merchant banks nominated in writing by Aflease
to Micawber; or
- an amount equal to 26% of the market capitalisation of Aflease at the
effective date of the Sale Agreement, less the value of any assets of
Aflease excluded from the Proposed transaction.
4.6 Other opportunities
Aflease may investigate other opportunities to expand its business
activities and some of these activities may require BEE participation.
In this regard Aflease will use reasonable commercial endeavours to
involve Micawber in such opportunities, should Aflease require the
participation of a BEE partner.
4.7 Conditions precedent
The proposed arrangements set out in the MOU are subject to, inter alia,
the approval thereof by the boards of directors and shareholders of all
parties to the MOU and to the fulfilment of the conditions precedent, if
any, to be contained in the intended agreements which will record the
Proposed transaction (the `Intended Agreements`). Any further conditions
precedent will be detailed when a detailed announcement is made.
4.8 Warranties
The warranties which are customary for a transaction of this nature will
be provided for in the Intended Agreements.
4.9 Other terms
The remaining terms and conditions of the Proposed transaction are
standard for a transaction of this nature.
5. Financial effects
The pro forma financial information in respect of the Proposed transaction has
not been provided in this announcement but will be provided to Aflease
shareholders once a more detailed announcement in this regard is made.
6. Detailed announcement and circular to Aflease shareholders
A detailed announcement relating to the Proposed transaction will be made once
Aflease has entered into the Intended Agreements. Subject to approval by the
JSE Securities Exchange SA and any other regulatory authority, a circular
containing full details of the Proposed transaction will be posted to Aflease
shareholders in due course.
7. Further cautionary announcement
Aflease shareholders are advised to continue to exercise caution when dealing in
Aflease`s shares until a detailed announcement relating to the Proposed
transaction has been made.
Johannesburg
22 February 2005
Investment bank and Attorneys
sponsor
Nedbank Capital Deneys Reitz
Attorneys
Date: 22/02/2005 10:00:04 AM
Produced by the JSE SENS Department
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