| Tue 30 Aug 2005, 18:13 | | Western Areas Limited/Jci Limited - Confirmation o |
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Western Areas Limited/Jci Limited - Confirmation of the rights offer, waiver of
mandatory offer and reconstitution of the board of directors of WAL
WESTERN AREAS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1959/003209/06)
Share code: WAR
ISIN: ZAE000016549
(`WAL`)
JCI LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1894/000854/06)
Share code: JCD (suspended)
ISIN: ZAE000039681
Debenture Code: JCDD (suspended)ISIN: ZAE000039699(`JCI`)
CONFIRMATION OF THE RIGHTS OFFER, WAIVER OF MANDATORY OFFER AND RECONSTITUTION
OF THE BOARD OF DIRECTORS OF WAL
1. IntroductionWAL shareholders are referred to the announcements published on
12 May 2005, 30 June 2005 and 19 August 2005 setting out the intention of the
board of directors of WAL (`the WAL board`), subject to certain conditions
precedent, to implement a renounceable rights offer (`the WAL rights offer`) to
WAL shareholders.
This announcement confirms the major features of the proposed rights offer,
which is subject to the conditions precedent in paragraph 6 below.
2. Terms of the WAL rights offerWAL intends to raise R639 094 320, before
expenses, by way of a renounceable rights offer of 35 505 240 WAL shares
(`rights shares`), at a price of 1 800 cents per WAL ordinary share. WAL
shareholders will have the right to subscribe for 29,95000 rights shares for
every 100 WAL shares held on the record date. Upon issue, the rights shares will
rank pari passu with the previously issued shares of WAL.
3. UnderwritingIt is the intention that an underwriting and commitment agreement
will be entered into amongst WAL and a wholly-owned subsidiary of JCI (`SPV`),
in terms whereof SPV undertakes to underwrite the WAL rights offer up to a
maximum of R250 million, and WAL undertakes to pay SPV a fee of 0.5% of the
amount of the subscription price payable in terms of that portion of the WAL
rights offer underwritten by SPV. The underwriting agreement is subject to the
conditions precedent that JCI, SPV and Investec Bank Limited (`Investec`) shall
enter into a facility agreement (`the facility`) in terms whereof Investec shall
arrange a loan facility of approximately R460 million to SPV, that the
conditions precedent to the facility shall be fulfilled, and that the facility
shall be completed in accordance with its terms. Refer to the JCI announcement
published on the Securities Exchange News Service (`SENS`) of the JSE Limited
(`the JSE`) today.
4. CommitmentsWAL has received irrevocable undertakings from WAL shareholders
namely: Allan Gray Limited (on behalf of certain of its clients), and JCI to
follow their rights in terms of the WAL rights offer.
A commitment fee of 0.5% of the subscription price is payable, to the
abovementioned shareholders in terms of the rights offer, by WAL on the total
value of the irrevocable undertakings.
The commitment by JCI, in terms of paragraphs 3 and 4 above, and the acquisition
of WAL shares pursuant thereto, has been categorised as a category 1 transaction
in terms of the Listings Requirements of the JSE. In terms of a ruling by the
JSE this transaction will be ratified at the forthcoming annual general meeting
of JCI shareholders. JCI shareholders holding at least 50.1% of the JCI ordinary
shares in issue have undertaken to vote in favour of such transaction.
5. Pro forma financial effects of the WAL rights offerThe table below sets out
the unaudited pro forma financial effects of the WAL rights offer on WAL based
on the assumptions set out below. The unaudited pro forma financial effects are
presented for illustrative purposes only and because of their nature may not
give a fair reflection of WAL`s results, financial position and changes in
equity after the rights offer. It has been assumed for purposes of the unaudited
pro forma financial effects that the rights offer took place with effect from 1
January 2005 for income statement purposes and 30 June 2005 for balance sheet
purposes. The directors of WAL are responsible for the unaudited pro forma
financial effects.
Unaudited
Actual pro forma Percentage
`Before WAL `After WAL (decrease)
Per share rights offer` rights offer` /increase
Fully diluted earnings (263.9)(1) (202.9)(2) (23.11)
(cents)
Fully diluted headline (265.0)(1) (203.8)(2) (23.09)
earnings (cents)
Net asset value - including 1 092.8(3) 1 252.9(4) 14.65
intangibles (cents)
Net asset value - excluding 1 092.8(3) 1 252.9(4) 14.65
intangibles (cents)
Number of ordinary shares 118 548 379 154 053 619 29.95
in issue
Fully diluted weighted 118 281 664 153 786 904 30.02
average number of ordinary
shares
1 The fully diluted earnings and fully diluted headline earnings per WAL share
in the Actual `Before WAL rights offer` column are based on the published
unaudited results of WAL dated 26 August 2005, for the 6-month period ended 30
June 2005.
2 The fully diluted earnings and fully diluted headline earnings per WAL share
in the unaudited pro forma `After WAL rights offer` column are based on the
assumption that the cash received amounts to R634.6 million after expenses. No
interest benefit has been calculated in respect of the cash raised as it will be
used to fund capital expenditure and the hedge book.
3 The net asset value per WAL share in the Actual `Before WAL rights offer`
column is based on the published unaudited position of WAL at 30 June 2005.
4 The net asset value per WAL share in the unaudited pro forma `After the WAL
rights offer` is based on the assumption that the rights offer is fully
subscribed, less the estimated transaction costs, and the number of shares used
in the calculation is 154 053 619 on a fully diluted basis.
6. Conditions precedentThe WAL rights offer is subject to amongst other things,
the following material conditions precedent:
approval of the rights offer documentation by the JSE;
registration of the rights offer documentation by the Registrar of Companies;
and
the waiver of a mandatory offer referred to in paragraph 7 below.
An announcement will be published on SENS once the above conditions precedent
shall have been fulfilled.
7. Waiver of mandatory offerIt is possible that, after the implementation of the
WAL rights offer, JCI shall have increased its shareholding in WAL by more than
5%. This would, subject to the discretion of the Securities Regulation Panel
(`the SRP`), result in JCI`s participation in the WAL rights offer being
regarded as an `affected transaction` in terms of the Securities Regulation Code
on Takeovers and Mergers (`the Code`) and gives rise to an obligation for JCI to
make a mandatory offer to all WAL shareholders, other than JCI, for their WAL
shares at a price per share equal to the rights offer price or the highest price
paid for shares in the preceding 12 months.
In terms of the provisions of the Code, the SRP will be approached to grant
dispensation to JCI not to be obliged to make a mandatory offer to all existing
WAL shareholders, other than JCI, to acquire all existing WAL shares in issue
for the same or a comparable consideration.
8. Reconstitution of the WAL board In compliance with rule 3.59 of the Listings
Requirements of the JSE, WAL advises that with effect from close of business on
24 August 2005, the following changes took place:
Resignations
Mr. RB Kebble (in his capacity as Chief Executive Officer), and
Mr. SM Rasethaba (in his capacity as Non-Executive Director) have resigned.
Proposed new appointments
Mr. SE Abrahams (independent non-executive)Mr. DM Nurek (independent non-
executive)The above proposed new appointments will be advised in due course.
Mr ME Mkwanazi has relinquished his position as Non-Executive Chairman, but will
remain on the board of Western Areas as a Non-Executive Director.
WAL is in discussions with candidates for the appointment of a new independent
non-executive chairman, a new chief executive officer and other independent non-
executive directors. Announcement(s) in this regard will be made in due course.
The WAL board as currently constituted is as follows:
VG Bray (independent non-executive)JR Dixon (non-executive)JC Lamprecht
(financial director)F Lips (independent non-executive)AA McGregor (independent
non-executive)
ME Mkwanazi (non-executive)
Mr VG Bray will remain on the board until conclusion of the WAL rights offer,
and will retire thereafter.
9. DocumentationSubject to the fulfilment of the conditions precedent set out in
paragraph 6 above, the WAL rights offer circular and the forms of instruction in
respect of the letters of allocation will be mailed to WAL shareholders in due
course.
Further announcements, including the salient dates pertaining to the WAL rights
offer, will be published on SENS and in the press in due course.
Johannesburg30 August 2005
Investment bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Independent reporting accountants to WALKPMG
Legal adviser to WAL
Tabacks
Sponsor to WAL
Sasfin Corporate Finance
A Division of Sasfin Bank Limited
Date: 30/08/2005 05:52:53 PM
Produced by the JSE SENS Department
