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Wescoal Holdings Limited - Wescoal acquires remaining 66% of the shares in
wesmine
Wescoal Holdings Limited
(previously known as `Abrina 724 Limited`)
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
(JSE code: WSL ISIN: ZAE000069639)
(`Wescoal` or `the company`)
WESCOAL ACQUIRES REMAINING 66% OF THE SHARES IN WESMINE
Warning: The listing of ordinary shares in the company is on ALTx. Investors
are advised of the risks of investing in a company listed on ALTx. Investors are
advised that the JSE does not guarantee the viability or the success of a
company listed on ALTx. In terms of the Listings Requirements, the company is
obliged to appoint and retain a Designated Adviser, which is required to, inter
alia, attend all board meetings held by the company to ensure that all the
Listings Requirements and applicable regulations are complied with, approve the
Financial Director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain a Designated
Adviser, it must make arrangements to appoint a new Designated Adviser within 10
business days, failing which the company faces suspension of trading of its
securities. If a Designated Adviser is not appointed within 30 days of its
suspension, the company faces the termination of its listing without the
prospect of an appropriate offer to minority shareholders.
1. INTRODUCTION
Shareholders are advised that Wescoal has signed an agreement with Hilkru
Mining Development (Pty) Limited (`Hilkru`) to acquire the remaining 66%
shares of Wescoal`s associate company, Wescoal Mining (Pty) Limited
(`Wesmine`) for a purchase consideration of R5 140 000 with effect from
18 July 2005. Wescoal will thereafter own 100% of Wesmine.
2. TERMS OF THE ACQUISITION
The purchase consideration of R5 140 000 will be settled as follows:
R1 000 000 on or before 15 July 2005;
R2 070 000 in cash on or before 30 July 2005; and
R2 070 000 by the issue of Wescoal shares. The price of the shares shall
be calculated at the higher of 50 cents per share or the weighted average
ruling price of the shares for the five days immediately preceding 30 July
2005.
Normal warranties for a transaction of this nature have been provided for
by the shareholder of Hilkru.
3. RATIONALE OF THE TRANSACTION
Wescoal`s control over Wesmine, will expedite the future prospects of
Wescoal to consider the securing of small unmined, but viable, coal
deposits for extraction, processing and distribution through West Rand Coal
(Pty) Limited (`Chandler`).
By expanding into coal mining, Wescoal will be better positioned to meet
increasing domestic demand and to participate in the booming export of
coal. Wescoal`s management estimate that sourcing its own product would
result in an increase in margin of at least R10.00 per ton mined.
Access to its own product will also allow Wescoal`s entry into new markets
including power generation and cementation.
4. FINANCIAL EFFECTS
Wesmine historically incurred losses. A new cyclone washing plant was
commissioned in May 2005 at Wesmine at a cost of R2 million, which was
funded by Chandler. This upgrade increased the capacity significantly and
should ensure the future profitability of Wesmine. The transaction will
not have a material financial effect on Wescoal.
5. FURTHER ANNOUNCEMENT
Shareholders will be notified of the issue price of the shares issued to
Hilkru on 30 July 2005 as set out in paragraph 2 above.
Johannesburg
19 July 2005
Designated Adviser
Exchange Sponsors
Date: 19/07/2005 03:26:46 PM
Produced by the JSE SENS Department
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