| Mon 18 Jul 2005, 17:53 | | Scharrig Mining Limited - Mandatory Offer To Scham |
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Scharrig Mining Limited - Mandatory Offer To Schamin Minority Shareholders
SCHARRIG MINING LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)(REGISTRATION NUMBER 1992/001973/06)
SHARE CODE: SCN ISIN: ZAE000006474
(`SCHAMIN` OR `THE COMPANY`)
MANDATORY OFFER TO SCHAMIN MINORITY SHAREHOLDERS1. INTRODUCTION
It was announced on SENS on 22 April 2005 that a group of investors led by Mr
Dines Gihwala and Mr Richard Jonah (`the BEE consortium`) had acquired 22.2
million ordinary shares in the Company, for a total purchase consideration ofR49.95 million in cash from certain members of the Scharrighuisen family
including a director of the Company, Mr T Scharrighuisen (`the transaction`).
The BEE consortium`s shareholding in the Company pursuant to the transaction was
approximately 17.3% of the Company`s issued share capital. In terms of thetransaction, the BEE consortium also obtained an option to purchase a further
34.38 million shares in the Company from other companies and trusts associated
with Mr T Scharrighuisen at a price of 225 cents per share plus 0.043 cents per
share per day from 22 April 2005 until the option is exercised (`the option`).The option was exercised in full on 14 July 2005, resulting in an exercise price
of 228.6 cents per Schamin share.
2. THE OFFER TO MINORITIES
Pursuant to the exercise of the option, the BEE consortium holds 41% of theCompany`s issued share capital. The exercise of the option constitutes an
affected transaction in terms of the Securities Regulation Panel (`SRP`) Code on
Take-Overs and Mergers (`the Code`). The BEE consortium is accordingly obliged
to extend an offer to the Schamin minority shareholders to acquire all or partof their Schamin shares in exchange for a cash consideration of 228.6 cents per
Schamin share (`the offer to minorities`). The SRP will be advised in writing
that sufficient cash resources are available to the BEE consortium to ensure
that their commitments in terms of the offer to minorities can be honored priorto the opening of the offer to minorities. The BEE consortium has confirmed
that it is not acting in concert with any party in relation to the affected
transaction.
3. RATIONALE FOR THE TRANSACTIONThe BEE consortium has become a strategic shareholder in Schamin in cognisance
of the relevant empowerment charters governing the Company and industry in which
it operates. The BEE consortium through its networks and knowledge of the
industry will also contribute to ensuring that the Company complies with otherBEE requirements specified in such charters. The BEE consortium is confident
that the Company will benefit from the extensive mining contacts and experience
of Mr Richard Jonah. Opportunities identified include the sourcing of new
contract mining opportunities and the diversification of the Company`s earningsbase.
4. SALIENT DATES OF THE OFFER TO MINORITIES
The salient dates of the offer to minorities are as follows:
2005 Date of posting of the Circular Thursday, 28 July
Offer to minorities opens (09h00) Thursday, 28 July
Last day to trade in Schamin shares in Friday, 12 August
order to take up the offer to minorities
Date from which Schamin shares will Monday, 15 August
trade ex rights to participate in the
offer to minorities Record Date to participate in the offer Friday, 19 August
to minorities
Offer to minorities closes (12h00) Friday, 19 August
Note 2Y Results of the offer to minorities Monday, 22 August
published on SENS
Results of the offer to minorities Tuesday, 23 August
published in the press Payment dates
Notes 4 & 5Y See below
Notes:
1. The above dates and times may be subject to amendment. Any amendment will
be published on SENS and in the press.2. Dematerialised shareholders are required to notify their duly appointed
Central Securities Depository Participant (`CSDP`) or broker of their acceptance
of the offer to minorities in the manner and time stipulated in the agreement
governing the relationship between such shareholders and their CSDP or broker.3. Share certificates may not be dematerialised or rematerialised between
Monday, 15 August 2005 and Friday, 19 August 2005, both days inclusive.
4. Cheques payable pursuant to the acceptance of the offer to minorities will
be posted to the certificated shareholders concerned, at their risk, within fivebusiness days of receipt of valid acceptances by the transfer secretaries (which
will be included in the circular as detailed below).
5. Accounts held at the CSDP or broker of the dematerialised shareholders
concerned will be credited / updated within five business days of receipt ofnotification of acceptance by the transfer secretaries from STRATE who in turn
was notified by the shareholders` duly appointed (`CSDP`) or broker.
5. PRO FORMA FINANCIAL EFFECTS
These pro forma financial effects are the responsibility of the board ofdirectors of Schamin (`the board`), are prepared for illustrative purposes only,
and because of their nature, may not give a true picture of the Company`s and /
or a shareholder`s financial position and results. The table below sets out a
comparison of the financial effects on a shareholder of one Schamin shareaccepting the offer to minorities or remaining a shareholder of Schamin:
Column 1 Column 2 Column 3
Not Accepting Accepting the % change on
the offer to offer to acceptance minorities
1Y minorities
Earnings per share 46.6 11.43(2) (75.5)
(cents)
Headline Earnings per 46.6 11.43(2) (75.5) share (cents)
Net Asset Value per 183 228.6(3) 24.9
share (cents)
Net Tangible Asset Value 183 228.6(3) 24.9 per share (cents)
Market price 400(4) 228.6(3) (42.9)
Notes:
1Y The figures contained in column 1 are based on the audited year end resultsof Schamin as at 31 March 2005.
2Y The earnings and headline earnings per share as reflected in column 2
assume that the offer price was received on 1 April 2004 and invested at an
after tax rate of 5% per annum for the year ended 31 March 2005.
3Y The offer price.
4Y The closing price at which Schamin shares traded on 13 July 2005, being the
last trading day on which Schamin shares were traded on the JSE Limited prior
to the date of exercise by the BEE consortium of the option referred toabove.
6. OPINIONS AND RECOMMENDATIONS
In accordance with Rule 3.1 of the Code, Sasfin Corporate Finance (a division of
Sasfin Bank Limited) has been appointed as independent advisers to the board onthe offer to minorities and how it affects all shareholders, including minority
shareholders. Their opinion and that of the board will be contained in the
circular referred to below.
7. IRREVOCABLE UNDERTAKINGSShareholders holding approximately 31.4% of the issued share capital of the
company have signed irrevocable undertakings not to accept the offer to
minorities. This represents more than 50% of the minority shareholders.
8. CONTINUED LISTING ON THE JSEIt is the intention of the BEE consortium for the Company to remain listed on
the JSE and accordingly, in the event and to the extent applicable, any
entitlement by the BEE consortium in terms of Section 440K of the Companies Act,
1973 (Act 61 of 1973), as amended, to acquire compulsorily the shares of anyminority shareholder, will not be enforced by the BEE consortium
9. DOCUMENTATION
A circular to shareholders setting out full details of the offer to minorities
will be issued and posted to shareholders on or about 28 July 2005.Boksburg
18 July 2005
Sponsor and Independent Reporting accountants Corporate law advisors to
Advisor to Schamin to Schamin Schamin BDO Spencer Steward
Sasfin Corporate Finance (KZN) Inc. Tabacks
A division on Sasfin
Bank LimitedLegal advisors to the Joint advisors to the BEE
BEE consortium consortium
Coronation Capital
Hofmeyr Herbstein & Interactive CapitalGihwala Inc.Date: 18/07/2005 05:50:09 PM Produced by the JSE SENS Department
