| Tue 7 Nov 2006, 11:15 | | Aquarius Platinum - Aquarius purchases 3.5% of Sou |
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AQP
AQP
Aquarius Platinum - Aquarius purchases 3.5% of South African subsidiary
from SavCon
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP & ISIN Code: BMG0440M1029
("Aquarius Platinum")
7 November 2006
Aquarius purchases 3.5% of South African subsidiary from SavCon
Aquarius Platinum Limited (ASX, LSE & JSE: AQP) announces that agreement
has been reached with the Savannah Consortium ("SavCon") for the
acquisition by AQP of a 3.5% equity interest in Aquarius Platinum (South
Africa) (Pty) Limited ("AQPSA") from SavCon ("the Transaction") for a cash
consideration of R342.526 million (US$46.7 million). The Transaction
represents a partial implementation of the final phase of the Black
Economic Empowerment transaction approved by shareholders in Special
General Meeting on 11 October 2004 ("the BEE Transaction") and will
increase AQP"s equity interest in AQPSA from 50.5% to 54%. The Transaction
consideration will be funded from AQP"s internal cash resources and will
enhance value for existing AQP shareholders.
BEE TRANSACTION
AQP, AQPSA and SavCon concluded the BEE Transaction during October 2004,
whereby SavCon purchased a 29.5% equity interest in AQPSA for a total
consideration of R860 million, partly by acquiring an existing equity
interest in AQPSA from AQP and partly by subscribing for new equity in
AQPSA. The BEE Transaction enabled AQPSA to fund the development of the
Everest Mine, a value accretive project now in production and which will
significantly increase AQPSA"s production and earnings. The BEE Transaction
resulted in BEE equity participation in AQPSA in excess of the 26% required
by the South African Mineral and Petroleum Resources Development Act
("MPRDA") and the associated Mining Charter. In terms of the final phase of
the BEE Transaction, AQP was to ultimately acquire SavCon"s 29.5% equity
interest in AQPSA and issue 24,599,542 new AQP shares to SavCon in
consideration (`the Final Phase"), subject to the fulfilment of certain
conditions, including conversion of AQPSA"s mining rights.
In anticipation of conversion by AQPSA of its old-order mining and
prospecting rights, AQP and SavCon agreed, subject to mining rights
conversion, the partial implementation of the Final Phase to create a `win-
win" for both AQP and SavCon. The Transaction will enable SavCon to lock in
a signifcant gain, without having any adverse impact on AQPSA"s new-order
mining rights, on approximately 12% of its original investment in the AQP
Group with the diposal proceeds utilised to repay a substantial portion of
the third-party funding raised by SavCon for the BEE Transaction, thereby
improving the long-term sustainability of the BEE Transaction. The
Transaction will reduce SavCon"s equity interest in AQPSA to 26% from the
29.5% acquired in terms of the BEE Transaction, however AQPSA will remain
fully compliant with the BEE equity participation requirements of the
MPRDA. AQP in turn will not issue the pro-rata number of shares that the
3.5% of AQPSA represents in terms of the Final Phase of the BEE
Transaction, namely 2,918,590 shares (3.5% / 29.5% x 24,599,542 shares),
and will instead use some of its cash balance as consideration for the
purchase of 3.5% of AQPSA.
3.5% PURCHASE CONSIDERATION
On 24 October 2006, AQP announced that the South African Government"s
Department of Minerals and Energy ("DME") had converted AQPSA"s mining
rights at Kroondal, Marikana and Everest. The Transaction consideration,
priced on that day, was derived using the same calculation methodology as
for SavCon"s initial effective subscription for 24,599,542 AQP shares in
2004 (assuming implementation of the Final Phase), namely the 90 day VWAP
per AQP share on the London Stock Exchange, converted to South African
Rand. This amounts to R117.36 per AQP share (or approximately UK8.21 per
share at the exchange rate of R14.30 per UK on 24 October 2006), resulting
in total consideration payable to SavCon of R342.526 million (R117.36 per
share x 2,918,590 shares). Transaction costs and fees of approximately US$
1.9 million will be paid by AQP.
The Transaction share price represents an approximate discount of 15% to
the closing price per AQP share on 24 October 2006.
As a result of the Transaction, the number of new AQP shares to which
SavCon will be entitled upon the disposal of its residual equity interest
of 26% in AQPSA to AQP will be reduced proportionately by 2,918,590 shares
to 21,680,952. The conditions for ultimate disposal of SavCon"s 26% in
AQPSA and the take-up of its AQP shares in terms of the Final Phase remain
unchanged to those approved in Special General Meeting in 2004.
It is anticipated that the Transaction will take six weeks to complete and
remains subject to :
- Consent of the Minister of Minerals and Energy in terms of the MPRDA;
and
- Approval of the Transaction, as a partial implementation of the Final
Phase, by SavCon"s funders; and
- Approval of the South African Reserve Bank; and
- Execution of the Transaction agreements by AQP, AQPSA and SavCon.
REPAYMENT OF SHAREHOLDERS LOANS
In a separate transaction effective today, AQPSA repaid R100 million of
interest-bearing shareholder loans owing to SavCon as part of total
shareholder loan repayments of approximately R343 million to all of AQPSA"s
shareholders. SavCon in turn will repay R100 million of its indebtedness to
its funders. AQP"s loan repayment of R173.137 million will be utilised to
partially fund the above mentioned Transaction. AQPSA will benefit by a
reduction in interest charges of approximately R13 million per year as a
result of repaying the R100 million of interest-bearing shareholder loans
owing to SavCon.
For further information please visit www.aquariusplatinum.com or contact:
In Australia:
Willi Boehm, Aquarius Platinum Corporate Services Pty Ltd
+61 (0)8 9367 5211
In the United Kingdom:
Nick Bias - BuckBias Ltd
nickbias@aquariusplatinum.com
+ 44 (0)7887 920 530
In South Africa:
Stuart Murray, Aquarius Platinum (South Africa) (Pty) Ltd
+27 (0)11 455 2050
Sponsor :Investec Bank Limited
Date: 07/11/2006 11:16:05 AM Produced by the JSE SENS Department
