| Thu 15 Sep 2005, 10:24 | | Aflease - Acquisition of the entire issued share c |
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Aflease - Acquisition of the entire issued share capital of Aflease SXR and
further cautionary announcement
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`)
Acquisition of the entire issued share capital of Aflease by Southern Cross
Resources Inc. (`SXR`) (`the acquisition`) and further cautionary announcement
1. Introduction
Further to the announcement released on SENS on 5 July 2005, Aflease ordinary
shareholders are advised that Aflease and SXR have executed a definitive
acquisition agreement, setting out the terms of the acquisition and including a
proposed share consolidation of SXR ordinary shares in the ratio of 5:1 (`share
consolidation`).
2. Details of the acquisition
SXR wishes to acquire Aflease. To this end SXR will acquire the entire issued
share capital of Aflease, in the ratio of 0,18 of one SXR common share for each
Aflease ordinary share held, equivalent to a pre-consolidation ratio of 0,90, as
announced previously. This will be rounded to the nearest whole number and
credited as fully paid-up. SXR proposes to do this by way of a scheme of
arrangement in terms of section 311 of the South African Companies Act 1973 (Act
61 of 1973), as amended (`Companies Act`), proposed by SXR between Aflease and
the Aflease ordinary shareholders, excluding SXR (`the scheme`). The scheme
requires the approval of a majority of Aflease ordinary shareholders, excluding
SXR, representing not less than three-quarters of the votes exercisable by
scheme members present and voting, either in person or by proxy, at the scheme
meeting, the date of which will be announced in due course.
3. Opinions and recommendations
The board of directors of Aflease (`Aflease board`) has, in terms of the
Securities Regulation Code on Take-overs and Mergers, appointed an independent
sub-committee. The independent sub committee has appointed EY Corporate
Finance (Proprietary) Limited as an independent advisor, to advise the
independent sub-committee on the terms and conditions of the acquisition and
whether or not the acquisition is fair and reasonable to Aflease ordinary
shareholders, pursuant to which the Aflease board will advise Aflease ordinary
shareholders accordingly.
4. Due diligence investigations
SXR has successfully completed its technical due diligence on Aflease, utilising
both its own technical staff and independent consultants and Aflease has also
completed its confirmatory technical due diligence on SXR.
5. Financial effects
Financial effects of the acquisition will be made available to Aflease ordinary
shareholders in due course.
6. The share consolidation
In addition, the Acquisition Agreement provides for a 5:1 share consolidation of
SXR, concurrent with the implementation of the acquisition. Upon consolidation,
each SXR shareholder will receive one new SXR common share for five SXR common
shares currently held. Given the business scale and market capitalisation of
the combined company, the boards of directors of both SXR and AFL have agreed to
the share consolidation in order to both increase the capital raising options
open to the combined company, as well as to enhance its investment appeal,
particularly among international institutional investors.
The current issued share capital of SXR consists of 76,7 million common shares
of no par value, which will be consolidated into approximately 15,3 million
common shares, pursuant to the implementation of the consolidation.
The issued share capital of Aflease, as at 14 September 2005, is 377,4 million
ordinary shares, which will translate to approximately 67,9 million post
consolidation common shares pursuant to the implementation of the acquisition.
Accordingly, after the consolidation and acquisition the combined issued share
capital of SXR will be approximately 83,3 million common shares.
7. Conditions precedent to the acquisition
The acquisition is subject to the fulfilment of the following conditions
precedent:
- the approval of the acquisition by a majority of Aflease ordinary
shareholders representing not less than three-quarters of the votes
exercisable by Aflease shareholders present and voting either in person or
by proxy, at the Aflease scheme meeting;
- the approval of the acquisition by the JSE, the Securities Regulation Panel
and the South African Reserve Bank (`SARB`);
- the SARB and the JSE granting approval for the secondary listing of SXR on
the JSE and in the latter instance specifically for the listing of the
requisite number of SXR shares on the JSE;
- the approval by the Competition Authorities of South Africa, if required,
of the acquisition;
- a South African High Court (`Court`) sanctioning the acquisition in terms
of the Companies Act;
- the Registrar of South African Companies registering the Order of Court in
South Africa;
- a material adverse change clause;
- the approval of the acquisition and the consolidation by a majority of
votes cast at a special SXR common shareholder meeting; and
- SXR obtaining the requisite Canadian regulatory approvals.
8 Salient dates and times of the acquisition
Salient dates and times of the merger will be made available to Aflease ordinary
shareholders when the scheme announcement is published.
9. Documentation to Aflease ordinary shareholders and further cautionary
announcement.
A circular containing the final terms of the acquisition will be posted to
Aflease ordinary shareholders in mid-October 2005.
Aflease ordinary shareholders are advised to continue to exercise caution in
trading their Aflease ordinary shares until a further announcement is made.
10. Forward-looking Statement
This announcement contains certain forward-looking statements. These forward-
looking statements are subject to a variety of risks and uncertainties beyond
Aflease`s ability to control or predict, which could cause actual events or
results to differ materially from those anticipated in such forward-looking
statements. In this announcement, predictions about the acquisition being
approved and finalised are forward-looking statements. Accordingly, readers
should not place undue reliance on forward-looking statements.
The ordinary shares of Aflease Gold and Uranium Resources Limited (`AFL`) and
the common shares of Southern Cross Resources Inc. (`SXR`) have not been and
will not be registered under the U.S. Securities Act of 1933, as amended. This
announcement does not constitute an offer of securities for sale in the United
States. Securities may not be offered or sold in the United States absent
registration or an exemption from registration. Any public offering of
securities to be made in the United States will only be made by means of a
prospectus that may be obtained from AFL and/or SXR and that will contain
detailed information about these companies and management, as well as financial
statements.
Johannesburg
15 September 2005
South African Investment Bank, Corporate Advisor and Sponsor
Nedbank Capital
Independent Reporting Accountants
PWC Inc.
South African Legal Counsel
Deneys Reitz
Financial Advisor
BMO Nesbitt Burns
International Legal Counsel
Davis & Company
Legal Counsel to the Financial Advisor
Fasken Martineau DuMoulin
Specialised United States Legal Counsel
Latham and Watkins
Date: 15/09/2005 08:57:07 AM
Produced by the JSE SENS Department
