| Fri 7 Jul 2006, 9:00 | | Metorex - Disposal of Wakefield and Withdrawal of |
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MTX
MEMTX
Metorex - Disposal of Wakefield and Withdrawal of Cautionary Announcement
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
JSE code: MTX
ISIN: ZAE000022745
Issuer code: MEMTX
("Metorex" or "the Group")
DISPOSAL OF WAKEFIELD INVESTMENTS (PROPRIETARY) LIMITED ("WAKEFIELD") TO
LEXSHELL 668 INVESTMENTS (PROPRIETARY) LIMITED (TO BE RE-NAMED "SHANDUKA
COAL") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Further to the cautionary announcement, dated 4 July 2006, Metorex advises
that a Memorandum of Understanding has been signed in terms of which
Metorex and Grailton Investments (Proprietary) Limited ("Grailton" -
Umnotho weSizwe) have, subject to the fulfilment of the conditions
precedent referred to in paragraph 2.3 below, disposed of Wakefield to
Shanduka Coal ("the transaction"). Wakefield holds the Group"s coal mining
interests comprising four collieries situated in the Witbank/Middelburg
region.
2. The transaction
2.1 Settlement of consideration
The aggregate transaction consideration payable to Metorex and
Grailton in terms of the transaction will be R425 million, which
is subject to a price adjustment, where the working capital net
of debt varies from R4,3 million, and will be settled in cash.
Metorex has a 74% stake in Wakefield, Grailton, a 26% stake. The
aggregate transaction consideration will be shared in this ratio.
2.2 Rationale
The disposal is in accordance with the Group"s strategy, which
has been communicated to investors, of securing and operating
long life, high quality mining and resource assets. Whilst
Wakefield had become a meaningful contributor to Group earnings,
the limited life reserves are not in accordance with the stated
criteria.
2.3 Conditions precedent
The transaction is conditional, inter alia, upon:
* Governmental and regulatory approvals, including Competition
Commission approval; and
* the finalisation of a definitive sale of shares agreement.
2.4 Utilisation of the proceeds
The transaction proceeds will be employed, inter alia, to long
life high margin mining and exploration targets and will
contribute to the financing of the accelerated Ruashi Phase II
capital development programme.
2.5 Warranties
The transaction will be subject to warranties and indemnities
customary for a transaction of this nature and size.
2.6 Financial effects of the transaction
The unaudited pro forma financial effects of the transaction are
provided for illustrative purposes only to show the effect of the
transaction on earnings and net asset value per share as if the
transaction had taken place on 1 July 2005 and 31 December 2005,
respectively. Because of their nature the unaudited pro forma
financial effects may not give a true picture of the Group"s
financial position and performance. The unaudited pro forma
financial effects have been compiled from the unaudited
consolidated financial statements for the six months ended 31
December 2005 adjusted as described in the notes hereto:
31.12.2005 Pro forma
Unaudited after the
before the transaction %
Notes transaction change
Earnings per share 1, 2 21.21 101.31 378%
(cents)
Headline per share 1, 2 13.41 13.35 -
(cents)
Diluted earnings per 1, 2 20.16 100.26 397%
share (cents)
Diluted headline 1, 2 12.75 12.69 -
earnings per share
(cents)
Net asset value per 3 267 343 29%
share (cents)
Net tangible asset 260 337 30%
value per share 3
(cents)
Actual number of 287 662 287 662 -
shares in issue
(000"s)
Weighted average 285 210 285 210
number of shares in
issue (000"s)
Notes:
1. The "before" earnings per share, diluted earnings per share,
headline earnings per share and diluted headline earnings per
share figures are based on the weighted average number of shares
in issue at 31 December 2005;
2. The adjustments to the earnings per share, diluted earnings per
share, headline earnings per share and diluted headline earnings
per share are based on the weighted average number of shares in
issue at 31 December 2005 and are stated assuming that the
attributable proceeds of the transaction (R338 million, as
adjusted in terms of paragraph 2.1) were received and invested on
1 July 2005 in an interest bearing account at an after tax rate
of 5% for the six months ended 31 December 2005;
3. For net asset value and tangible net asset value calculations, it
is assumed that the attributable proceeds of the transaction
(R330 million, as adjusted in terms of paragraph 2.1) were
received on 31 December 2005 and are based on the actual number
of shares in issue at 31 December 2005.
3. Effective date
The transaction effective date will be 1 July 2006, subject to the
successful fulfilment of the conditions precedent referred to in
paragraph 2.3.
4. Categorisation of the transaction
The transaction is a Category 3 transaction in terms of the Listings
Requirements of the JSE Limited and therefore no circular to
shareholders is required.
5. Withdrawal of cautionary announcement, dated 4 July 2006.
The cautionary announcement is hereby withdrawn.
Johannesburg
7 July 2006
Sponsor:
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 07/07/2006 09:00:21 AM Produced by the JSE SENS Department
