| Tue 22 Nov 2005, 12:25 | | Sub Nigel/ Aflease - Acquisition and change of nam |
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Sub Nigel/ Aflease - Acquisition and change of name
Sub Nigel Gold Mining Company Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1984/006179/06)
ISIN: ZAE000006391 & Share Code: SBN
("Sub Nigel" or "the Company")
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")
Announcement regarding:
* The acquisition by Sub Nigel from Aflease of all the issued ordinary
shares of New Kleinfontein Mining Company (Proprietary) Limited ("New
Kleinfontein") and all amounts due by New Kleinfontein to Aflease on loan
account and, in consideration therefor, the issue by Sub Nigel of 339 011
680 new ordinary shares to Aflease;
* A conversion of the authorised and stated share capital of Sub Nigel from
ordinary shares with no par value to ordinary shares with a par value;
* An increase in the authorised ordinary share capital of Sub Nigel;
* A change of name from Sub Nigel to Aflease Gold Limited;
* The waiver by independent Sub Nigel ordinary shareholders of Aflease"s
obligation to make a mandatory offer to Sub Nigel ordinary shareholders
in terms of the SRP Code; and
* The withdrawal of the Sub Nigel cautionary announcement.
1. Introduction
Further to the joint announcement released on SENS on 23 August 2005,
Aflease and Sub Nigel shareholders are advised that Aflease and Sub
Nigel have entered into an agreement in terms of which Sub Nigel will,
subject to the fulfilment of the conditions precedent in 4 below,
acquire from Aflease all the issued shares in New Kleinfontein and all
amounts due on loan account by New Kleinfontein to Aflease, and in
consideration therefor, Sub Nigel will issue 339 011 680 new ordinary
shares ("subscription shares") to Aflease at an issue price of 96 cents
per Sub Nigel ordinary share ("Sub Nigel share"), being the weighted
average traded price of Sub Nigel shares over the 30 trading days prior
to the SENS announcement on 23 August 2005 (hereinafter collectively
referred to as "the transaction").
2. Rationale for the transaction
The rationale for the transaction is to create a new gold vehicle
incorporating Aflease"s East Rand gold assets, including the Modder East
project, which is housed in New Kleinfontein, as well as Sub Nigel"s
East Rand and Free State gold assets.
3. Nature and business of New Kleinfontein
New Kleinfontein is a company incorporated in the Republic of South
Africa for the mining and extraction of gold from its properties on the
East Rand in the Gauteng Province of South Africa. New Kleinfontein owns
the mineral rights areas comprising Modder East, UC Prospecting,
Turnbridge and New Kleinfontein.
4. Conditions precedent to the transaction
The transaction is subject to the following conditions precedent:
- the requisite approvals of the transaction by JSE Limited ("the JSE")
and the Securities Regulation Panel ("the SRP");
- the ordinary shareholders of Sub Nigel approving:
*the execution of the sale and subscription agreement giving effect
to the transaction;
*an increase in the authorised ordinary share capital of Sub Nigel
to facilitate the issue of the subscription shares; and
*the grant of a specific authority to place 339 011 680 of the new
authorised but unissued ordinary shares under the control of the
directors, to enable Sub Nigel to comply with its obligations in
terms of the sale and subscription agreement;
- the independent Sub Nigel ordinary shareholders waiving Aflease"s
obligation to make a mandatory offer to all Sub Nigel shareholders in
terms of the SRP Code on Takeovers and Mergers (the "SRP Code"); and
- the board of directors of Aflease ("the Aflease board") approving the
execution of the agreement giving effect to the transaction.
5. Effective date
The effective date of the transaction will be the business day following
the day on which the last of the conditions precedent is fulfilled.
6. Financial effects of the transaction on Sub Nigel shareholders
The table below sets out the unaudited pro forma financial effects of the
transaction on Sub Nigel shareholders. These financial effects are
prepared for illustrative purposes only, to provide information about how
the transaction might have affected the financial information presented
by Sub Nigel and, because of their pro forma nature, may not give a true
reflection of Sub Nigel"s financial position and results of its
operations. These financial effects are the responsibility of the board
of directors of Sub Nigel ("the Sub Nigel board").
Before After the % change
transaction
Loss per share (cents) (39.67) (7.16) 81.9
Headline loss per share (39.67) (7.16) 81.9
(cents)
Net asset value per share 11.16 80.84 624.4
(cents)
Tangible net asset value 6.43 1.20 (81.3)
per share (cents)
Number of shares in issue 73 753 412 765
("000)
Weighted average shares in
issue ("000) 70 092 409 104
Notes:
1. The "Before" column reflects the loss and headline loss as extracted,
without adjustment from the published audited results of Sub Nigel for
the financial year ended 30 June 2005 and the calculation of the net
asset value and tangible net asset value per share based on the
aforementioned audited results.
2. The "After the transaction" column reflects:
- the loss and headline loss per share that would have resulted had
the reviewed interim results of New Kleinfontein for the six months
ended 30 June 2005 been annualised and combined with results of Sub
Nigel for the financial year ended 30 June 2005, and on the
assumption that the transaction was implemented and was settled by
the issue of the subscription shares on 1 July 2004; and
- the net asset value and tangible net asset value per share at 30
June 2005 on the assumption that the transaction was implemented and
was settled by the issue of the subscription shares on that date.
In addition, the "After the transaction" column assumes that all the
intangible assets acquired as a result of the transaction are
attributable to mining assets. On determination of the fair value of the
assets acquired in accordance with AC131 ("Business Combinations"), the
loss, headline loss, net asset value and tangible net asset value per
share may be subject to adjustment.
3. No effect has been given in the pro forma financial effects above to:
- the general issues of shares for cash by Sub Nigel subsequent to 30
June 2005, comprising an issue of 2,000,000 Sub Nigel shares on 18
August 2005 and a further issue of 9 000 000 Sub Nigel shares as
announced on SENS on 4 October 2005; and
- the vesting of 8 000 000 Sub Nigel employee share options on the
implementation of the transaction.
7. Financial effects of the transaction on Aflease shareholders
The table below sets out the unaudited pro forma financial effects of the
transaction on Aflease shareholders. These financial effects are prepared
for illustrative purposes only, to provide information about how the
transaction might have affected the financial information presented by
Aflease and, because of their pro forma nature, may not give a true
reflection of Aflease"s financial position and results of its operations.
These financial effects are the responsibility of the Aflease board.
Before (1) After the % change
transaction
(2)
Loss per share (cents) (3) (40.77) (27.49) 32.57
Headline loss per share (41.12) (47.31) (15.05)
(cents) (3)
Net asset value per share 32.15 56.16 74.68
(cents) (4)
Weighted average shares in 338,983 338,983
issue ("000)
Number of shares in issue 345,426 345,426
("000)
Notes:
1.Based on the unaudited financial results of Aflease for the six
month period ended 30 June 2005.
2.Represents the financial effects on Aflease after the transaction.
3.Loss and headline loss per share are based on the following
assumptions:
- the transaction was effective on 1 January 2005; and
- the fair value of the consideration for the effective 20%
interest in NKMC sold as part of the transaction is based on
a price per Sub Nigel share of R0.96, being the volume weighted
average price per Sub Nigel share for the 30 days prior to 23
August 2005, the date of the cautionary announcement pertaining
to the transaction.
4.Net asset value per share is based on the following assumptions:
- the transaction was effective on 30 June 2005;
- the fair value of the purchase consideration for the acquisition
of an effective 80% interest in Sub Nigel is based on the volume
weighted average price per Sub Nigel share of R0.96; and
- assets and liabilities included on the Sub Nigel balance sheet at
30 June 2005 have been assumed to be stated at their respective
fair values. The difference between the fair value of the
purchase consideration and the identified assets and liabilities
has been assumed to be attributable to undeveloped properties.
At the effective date of the transaction, the fair value of the
purchase consideration will need to be determined and a purchase
price allocation exercise conducted. This exercise may result in
different values being attached to the assets and liabilities and
may result in goodwill or negative goodwill arising on the
transaction. Any goodwill will need to be tested for impairment
on an annual basis.
8. Opinions and recommendations
The Sub Nigel board has, in terms of the SRP Code, appointed an
independent committee to consider the transaction. The independent
committee has appointed Sasfin Corporate Finance as independent
professional adviser, to advise the independent committee on the terms
and conditions of the transaction and whether or not the transaction is
fair and reasonable to Sub Nigel shareholders.
9. Changes to the Sub Nigel board
Pursuant to implementation of the transaction, the current members of the
Sub Nigel board will resign and new members will be appointed.
10. Categorisation of the transaction in terms of the JSE Listings
Requirements
The transaction for Sub Nigel is a reverse take-over transaction as
defined in terms of Section 9.5 (c) of the JSE Listings Requirements and
a Category 3 transaction for Aflease in terms of Section 9.5 (a) of the
JSE Listings Requirements.
11. Conversion of authorised and stated ordinary share capital
The Sub Nigel board intends proposing that the Company"s authorised share
capital comprising 200 000 000 no par value ordinary shares and its stated
capital comprising 84 752 920 no par value ordinary shares as at the date
of this announcement, be converted into an authorised share capital
comprising 200 000 000 par value ordinary shares and an issued share
capital comprising 84 752 920 par value ordinary shares, respectively.
12. Increase in authorised ordinary share capital
The Sub Nigel board intends proposing that, subject to the passing and
registration of the special resolution contemplated in paragraph 11 above,
the Company"s authorised ordinary share capital be increased in order to
facilitate the issue of that number of new Sub Nigel ordinary shares as may
be required to implement the transaction.
13. Change of name
The Sub Nigel board intends proposing that, subject to the passing of the
ordinary resolutions approving and enabling the transaction and the passing
and registration of the special resolutions contemplated in 11 and 12
above, the name of the Company be changed to Aflease Gold Limited. This
name associates the Company with its new assets and controlling
shareholder.
14. Waiver of the mandatory offer
In terms of the SRP Code, the transaction will result in a change of
control in Sub Nigel as Aflease will hold more than 35% of Sub Nigel
ordinary shares in issue after the transaction. Accordingly, Aflease would
be required to make a mandatory offer to all Sub Nigel shareholders.
The SRP has agreed to dispense with the requirement for a mandatory offer
to all Sub Nigel shareholders provided that, pursuant to the transaction, a
resolution is passed by a majority of independent Sub Nigel shareholders at
a general meeting of Sub Nigel shareholders in terms of which this
requirement is waived.
15. Irrevocable undertakings
Sub Nigel shareholders representing 55.7% of the issued share capital of
Sub Nigel as at the date of this announcement have irrevocably undertaken
to vote in favour of the transaction.
16. Documentation to Sub Nigel shareholders and withdrawal of cautionary
announcement
A circular containing the final terms of the transaction and details of a
conversion of the authorised and issued share capital from ordinary shares
with no par value to ordinary shares with a par value, an increase in the
authorised ordinary share capital of Sub Nigel, a name change and the
waiver of the mandatory offer to Sub Nigel shareholders will be posted to
Sub Nigel shareholders in due course.
Sub Nigel shareholders are no longer advised to exercise caution in
trading in their Sub Nigel ordinary shares.
17. Forward-looking statement
This announcement contains certain forward-looking statements. These
forward-looking statements are subject to a variety of risks and
uncertainties beyond Sub Nigel"s and 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 transaction being approved and
finalised are forward-looking statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
Johannesburg
22 November 2005
Investment bank and transaction adviser to Sub Nigel
Nedbank Capital
Legal adviser to Sub Nigel
Deneys Reitz
Independent reporting accountants to Sub Nigel
Grant Thornton
Independent technical adviser to Sub Nigel
SRK
Independent professional adviser to Sub Nigel
Sasfin
Transaction sponsor
Ernst & Young
Investment bank, and sponsor to Aflease
Nedbank Capital
Independent reporting accountants to Aflease
PricewaterhouseCoopers
Legal adviser to Aflease
Deneys Reitz
Date: 22/11/2005 12:26:18 PM Produced by the JSE SENS Department
