| Wed 8 Jun 2005, 13:59 | | Aflease - BEE transaction by Aflease |
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Aflease - 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 announcement dated 22 February 2005 and the cautionary
announcement dated 11 May 2005, Aflease shareholders are advised that the
Company has entered into an agreement with Micawber 397 (Proprietary)
Limited (`Micawber`), dated 7 June 2005 (`the Agreement`), a company 100%
owned by historically disadvantaged South Africans (`HDSA`).
Aflease has in terms of the Agreement sold with effect from 30 September
2005 (`the Effective Date`) to Micawber an undivided 26% share of the
Company`s right, title and interest in and to the business (`the Business
`) consisting of the following assets and liabilities -
- the exploration and mining activities in respect of Aflease`s Rietkuil
mining area, Bonanza gold mine and Dominiun reef uranium project in
the Klerksdorp area, including Aflease`s entire uranium prospecting
and planned mining activities in that area;
- the associated prospecting areas in respect of which Aflease has
applied for prospecting rights under section 16 of the Mineral and
Petroleum Resources Development Act 28 of 2002 (`MPRD Act`); and
- rehabilitation obligations relating to the above mentioned mining and
prospecting activities;
collectively the `Sale Assets`.
- the aggregate of the liabilities (`the Sale Liabilities`) at the
Effective Date in respect of the abovementioned Sale Assets.
The undivided 26% share of the Sale Assets and the Sale Liabilities at the
Effective Date are collectively referred to as the `Micawber Share`.
In addition to the Agreement, Aflease has also entered into other contracts
referred to in paragraph 3 below (`the Other Contracts`) with Micawber.
The Agreement and the Other Contracts are collectively referred to as the
`Transaction`.
2. Rationale for the Transaction
The purpose of the Transaction is to provide Aflease with a Black Economic
Empowerment (`BEE`) partner in compliance with the requirements of the
Broad-Based BEE 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
MPRD Act.
The shareholder profile of Micawber will enable Aflease to achieve its
required BEE status as set out above, which shareholder profile will be as
follows:
- a HDSA Aflease Workers Trust 30%;
- an HDSA Community Trust 30%;
- Africa Vanguard Resources Limited, a wholly HDSA owned entity 20%;
and
- four other BEE compliant entities, being:
- Indalo Resources Limited 5%;
- Emseni Investments (Proprietary) Limited 5%;
- Umlilo Mining & Finance (Proprietary) Limited 5%;
and
- Magumo Investments (Proprietary) Limited 5%.
3. Details and terms of the Transaction
3.1 The Other Contracts
3.1.1 Aflease and Micawber have entered into an unincorporated
joint venture (`JV`) agreement (`JV Agreement`) in terms of
which the following will be contributed to the JV, created
by the JV Agreement:
- by Micawber: the Micawber Share; and
- by Aflease: an undivided 74% share of the Business.
In consideration of the contributions of Aflease and
Micawber to the JV, their participation in the JV will be
74% and 26%, respectively (`Participation Interests`).
3.1.2 The JV will enter into a Management and Skills Transfer
Agreement with Aflease in terms of which Aflease will
undertake the management of the business of the JV, market
and distribute the product produced by the JV as well as
assist in the transfer of skills to HDSA`s. The management
committee of the JV, which will comprise members from
Micawber and Aflease, will oversee the management of the
affairs and operations of the JV.
3.2 Funding
The parties to the JV will contribute to the funding of the JV in
proportion to their Participation Interests. Until Micawber has paid
Aflease for the Micawber Share, Aflease shall lend to Micawber its
proportionate share of the funding of the JV (`Micawber Loan`).
Aflease will be entitled to the payment of interest by Micawber on the
Micawber Loan at the same rate and payment terms obtainable by Aflease
in the international lending market. The Micawber Loan plus accrued
interest will be repayable by Micawber from the profits to which
Micawber is entitled out of the JV.
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 Sale Assets.
3.3 Purchase Price
3.3.1 The purchase price for the Micawber Share is equal to the
lower of:
- 26% of the Net Present Value (`NPV`) of the Business
consisting of the Sale Assets and the Sale Liabilities
at the time of Micawber giving notice in writing to
Aflease (`the Election`) described in paragraph 3.4.2
below; or
- the 30 day weighted average traded price of the shares
in Aflease, calculated for the 30 business days prior
to the date of the election, amended for the Aflease
assets which do no form part of the Business;
collectively the `Purchase Price`
3.4 Payment of the Purchase Price
3.4.1 The Purchase Price for the Micawber Share will be debited as
a loan account in the records of Aflease and will be paid as
set out in 3.4.2 and 3.4.3 below.
3.4.2 Micawber shall be obliged to give notice in writing to
Aflease within 3 years of receipt the first dividend
distribution by the JV that it wishes to pay for at least a
20% tranche of the Purchase Price.
3.4.3 After payment of the first 20% tranche referred to in
paragraph 3.4.2 above, Micawber will be obliged to pay for
at least 20% of the purchase price of the Micawber Share
during each subsequent 3 year period until the Purchase
Price has been paid in full.
3.4.4 Payments made by Micawber for the Purchase Price will be
credited to the loan account in the records of Aflease,
referred to in 3.4.1 above.
3.5 Conditions precedent
The Transaction is subject to, inter alia, the fulfilment of the
following conditions precedent:
3.5.1 The grant by the Minister of Minerals and Energy
(`Minister`), of New Order Rights under the MPRD Act.
3.5.2 The grant by the Minister of consent in terms of Section 11
of the MPRD Act in respect of:
3.5.2.1 the transfer of an undivided 26% share of the New Order
Rights to Micawber in terms of the Agreement;
3.5.2.2 Micawber shareholders and Aflease entering into a
shareholders agreement; and
3.5.2.3 the contribution by Aflease and Micawber of their
respective undivided shares of the New Order Rights to
the JV.
3.5.3 The obtaining of all regulatory approvals required to
conclude and implement the agreement, including but not
limited to, approvals in terms of the Competition Act 1998
and the JSE Securities Exchange South Africa.
Should all of the conditions precedent not have been fulfilled or waived by
the Effective Date or such date as Aflease and Micawber may agree to in
writing, the Agreement shall lapse and be of no further force or effect and
neither Aflease nor Micawber shall have any rights or obligations
hereunder.
4. Financial effects
The financial effects of the Transaction will be announced in due course.
5. Circular to Aflease shareholders
A circular containing full details of the Transaction will be posted to
Aflease shareholders in due course.
6. Withdrawal of cautionary announcement
Since the terms of the Transaction has been announced, Aflease shareholders
are no longer required to exercise caution when dealing in the Company`s
shares.
Johannesburg
8 June 2005
Investment bank and sponsor
Nedbank Capital
Reporting accountants
PWC
Attorneys
Deneys Reitz
Date: 08/06/2005 01:09:29 P
Produced by the JSE SENS Department
