| Fri 7 Oct 2005, 16:17 | | Merafe - Terms of the fully underwritten renouncea |
|
Merafe - Terms of the fully underwritten renounceable rights offer
Merafe Resources Limited
(formerly South African Chrome and Alloys Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1987/003452/06)
Share code: MRF ISIN: ZAE000060000
("Merafe" or "the Company")
Terms of the fully underwritten renounceable rights offer
Introduction
It was announced on SENS on Tuesday, 4 October 2005 that Merafe would proceed
with a fully underwritten renounceable rights offer ("the rights offer"). Merafe
is undertaking the rights offer in order to raise R553 981 968.10 by offering
for subscription 1 007 239 942 Merafe shares ("offer shares") to Merafe
shareholders or their renouncees at 55 cents per offer share ("the rights offer
price") in the ratio of 813 offer shares for every 1 000 Merafe shares held on
the record date for the rights offer, being Friday, 21 October 2005.
Purpose
As a result of the Wonderkop acquisition increasing Merafe"s ultimate share in
the EBITDA of the Xstrata-Merafe Chrome Venture to 20.5%, the board of Merafe
decided to increase its investment in Project Lion to 20.5%. Merafe"s share of
Project Lion"s development and capital expenditure will equate to R349 million
(20.5% of the total anticipated cost of R1.7 billion) and its share of working
capital for Project Lion is anticipated to be R59 million.
Merafe intends to partly fund its contribution to the Project Lion development
and capital expenditure costs, to partly fund the Wonderkop acquisition
consideration of R331 million and to repay an existing loan from Xstrata South
Africa Propriety Limited ("Xstrata") of R76 million, by way of the rights offer.
The balance of the funding will be raised via debt. The total amount to be
raised will be in the order of R854 million, with R300 million financed by way
of debt and R554 million financed in terms of the rights offer. Xstrata will
provide a corporate guarantee to a local bank for the debt to be raised by
Merafe, thereby reducing the cost of the debt.
Terms of the rights offer
Merafe is offering for subscription by way of renounceable rights to Merafe
shareholders and/or persons in whose favour they renounce their rights, a total
of 1 007 239 942 offer shares at a price of 55 cents per offer share in the
ratio of 813 offer shares for every 1 000 Merafe shares held on the record date
of the rights offer, being Friday, 21 October 2005. The amount is payable in
full on acceptance by certificated shareholders, or on a delivery versus payment
basis by the CSDP or broker of dematerialised shareholders, as the case may be.
The terms and conditions of the rights offer will be set out in full in a
circular to shareholders to be posted on or about Monday, 24 October 2005 ("the
circular").
The offer price of 55 cents per offer share is at a discount of 15% when
compared to the closing price of 65 cents per Merafe share traded on the JSE
Limited ("the JSE") on Thursday, 6 October 2005. The price of the rights offer
was based on a 10% discount to the 30-day volume weighted average traded price
of Merafe shares at Tuesday, 4 October 2005.
Merafe shareholders will not be entitled to apply for a greater number of offer
shares than those offered to them in terms of the rights offer. Fractions of the
offer shares will not be allotted and each qualifying shareholder"s entitlement
will be rounded to the nearest whole number of offer shares.
Letters of allocation in respect of the rights offer will be issued in
dematerialised form and an electronic record for certificated shareholders will
be maintained by Ultra Registrars (Proprietary) Limited. This will enable both
dematerialised and certificated shareholders to sell or renounce some or all of
their rights to offer shares in accordance with the procedures set out in
greater detail in the circular.
Underwriting
Irrevocable undertakings to subscribe for 73.4% of the offer shares have been
received. The remaining 26.6% of the offer shares will be underwritten by a
consortium of Merafe shareholders, being Allan Gray Limited, Stanlib Asset
Management Limited and Coronation Asset Management (Proprietary) Limited ("the
Underwriting Consortium"). Offer shares not subscribed for pursuant to the
rights offer will be subscribed for by the Underwriting Consortium at the rights
offer price.
Conditions precedent
There are no outstanding conditions precedent to the rights offer.
Salient dates and times
2005
Last day to trade in Merafe shares in order to Friday, 14 October
participate in the rights offer
Listing of letters of allocation on the JSE Monday, 17 October
Merafe shares commence trading ex-rights on Monday, 17 October
the JSE with effect from commencement of trade
on
Record date for participation in the rights Friday, 21 October
offer
Rights offer opens at 09:00 Monday, 24 October
Circular and, where applicable, the form of Monday, 24 October
instruction posted to Merafe shareholders
Dematerialised shareholder"s CSDP accounts or Monday, 24 October
broker credited with rights of entitlement
Certificated shareholder"s nominee account at Monday, 24 October
the transfer secretaries credited
Last day to trade in letters of allocation on Friday, 4 November
the JSE
Offer shares listed Monday, 7 November
Forms of instruction from certificated Friday, 11 November
shareholders and payments to be received by
12:00
Rights offer closes at 12:00 (1) Friday, 11 November
Record date for letters of allocation Friday, 11 November
Results of rights offer announced on SENS Monday, 14 November
Offer shares issued Monday, 14 November
Certificates in respect of offer shares issued Monday, 14 November
and posted to certificated shareholders or
their renouncees, who have followed their
rights on or about
The safe custody accounts of dematerialised Monday, 14 November
shareholders, or their renouncees, who have
followed their rights, are updated and
accounts debited by CSDP or broker, and
certificates posted to certificated
shareholders
Notes:
1. Dematerialised shareholders are required to inform their CSDP or broker of
their instructions in terms of the rights offer in the manner and time
stipulated in the agreement governing the relationship between the
shareholder and its CSDP or broker.
2. Ordinary share certificates may not be dematerialised or re-materialised
between Friday, 14 October 2005 and Friday, 21 October 2005, both days
inclusive.
3. CSDPs effect payment in respect of dematerialised shareholders on a
delivery versus payment basis.
Documentation
A circular providing full details of the rights offer and incorporating the
letter of allocation will be available for inspection at the registered offices
of Merafe from Tuesday, 11 October 2005, and will be posted to shareholders on
or about Monday, 24 October 2005. Copies of the circular can be obtained during
normal business hours prior to the closing of the rights offer, being 12:00 on
Friday, 11 November 2005, at the registered offices of Merafe, Suite 106, Block
C, Eva Park, Corner Beyers Naude Drive & Judges Avenue, Cresta, 2194 and the
Company"s transfer secretaries, Ultra Registrars (Proprietary) Limited, 5th
floor, 11 Diagonal Street, Johannesburg, 2001.
7 October 2005
Johannesburg
Investment bank and transactional sponsor
Nedbank Capital, a division of Nedbank Limited
Sponsor
ABSA
Corporate and Merchant Bank
Corporate Finance
Legal adviser
Bowman Gilfillan Inc.
Date: 07/10/2005 04:17:11 PM Produced by the JSE SENS Department
