| Thu 1 Mar 2007, 16:00 | | NSX - AGL - Anglo American plc - Announcement rega |
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AGL
ANAAL
NSX - AGL - Anglo American plc - Announcement regarding the Black Economic
Empowerment transaction in respect of Scaw
South Africa (Pty) Ltd
Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB0004901517
Announcement regarding the Black Economic Empowerment transaction in
respect of Scaw South Africa (Pty) Ltd
Transaction Overview
Anglo American plc is pleased to announce that its Scaw Metals business has
concluded a black economic empowerment (BEE) transaction involving three
BEE partners, a women`s group (still to be selected) and an employee trust
through the sale of a 26% equity stake in its South African business.
The transaction is summarised as follows:
sale of the Scaw Metals division of Anglo Operations Limited (a wholly
owned subsidiary of Anglo American South Africa Limited) into Scaw South
Africa (Pty) Ltd (Scaw SA), with effect from 1 January 2007; the
introduction of third party senior and mezzanine debt financing into Scaw
SA; the provision of junior debt financing by Anglo American into Scaw SA;
sale of a 21% equity stake in Scaw SA to a consortium comprising three BEE
partners and a BEE women`s group; and the acquisition of a 5% equity stake
in Scaw SA by an employee trust. The transaction values Scaw SA at R5,3
billion.
Strategic Rationale
Anglo American regards transformation as fundamental to the long-term
development and stability of the South Africa economy and its South African
business. The Scaw Metals Group fully endorses these principles and, in
addition, views this BEE transaction as a necessary strategic response to
increasing market requirements for empowerment credentials. This is
particularly borne out in the mining, power generation and railway
industries, which constitute the majority of Scaw SA`s business.
The partners were selected based on their experience within these and the
general engineering sectors, as well as their proven track records in being
able to assist companies in growth and transformation strategies. The BEE
Consortium consists of the three partners, namely, Izingwe Holdings (7%),
Southern Palace Holdings (6%) and Shanduka Resources (5%), as well as a
warehoused stake of 3% for a broad-based women`s empowerment group. The
selection process of a women`s group is well advanced.
In recognition of the key role of employees in the future of the business
and to ensure that all stakeholders remain aligned throughout the life of
the transaction, all Scaw SA employees who are not part of an Anglo
American share incentive scheme will benefit from an employee share
ownership plan (ESOP) that will own a 5% equity stake in Scaw SA.
Ownership Structure
As a consequence of this BEE transaction 74% of Scaw SA will be held by
Anglo American, 21% by the BEE Consortium and 5% by the ESOP, as depicted
below.
Inzingwe 7%
Southern Palace 6%
Shanduka 5%
Women`s group 3%*
Anglo 74%
BEE Consortium 21%
ESOP 5%
Scaw SA
Note: All percentages are shown as effective interests into Scaw SA
* The women`s group is still to be selected
Funding structure
Scaw SA will acquire Scaw Metals division from Anglo Operations Limited for
a purchase price of R5,3 billion, which will be funded as follows:
Equity contribution of R100 million;
Vendor financing of R1,9 billion; and
Third-party financing of R3,3 billion (senior and mezzanine debt finance).
The BEE Consortium will be capitalised by an equity contribution from the
BEE partners which will be utilised to subscribe for a 21% share in Scaw
SA. Scaw SA will contribute R5 million to the ESOP Trust which the Trust
will use to subscribe for a 5% share in Scaw SA.
Information on the BEE partners
Izingwe Holdings
Izingwe is a significant investor in mining, engineering and infrastructure
development. It also has strong partnerships in the financial services
sector. It is an active and long-term shareholder that makes focussed and
value enhancing interventions in its underlying investments. Its
investments include AngloGold Ashanti, Aberdare Cables (Pty) Limited, Old
Mutual plc, Mutual and Federal Limited, Nedbank Group Limited and Peters
Papers (Pty) Limited.
Key personalities
Sipho Mila Pityana (Chairman)
Ashley Ally
Tsakani Matshazi
Mark Sifris
Southern Palace Holdings
Southern Palace Holdings is an investment holding company which has built
up a track record of successful transactions over the past few years. Its
mission is to participate in business opportunities which will contribute
to the further economic growth of the country and, more importantly, to
bring Southern Palace`s specific expertise and other operational
credentials to the table. Therefore, the group actively participates in the
day to day operations of the business. It has various investments in steel
and scrap metal recycling, transport and telecommunications. Its
investments include The Reclamation Group, Teljoy Business Systems,
Roadgrip Afrityre Holdings, Canvas and Tent, De La Reys Transport and
Huawei Technologies Africa.
Key personalities
Sello Mahlangu (Chairman)
Khosi Kharodi
Gladys Matitoane
Shanduka
The Shanduka Group is a leading black owned and managed investment company
established in November 2001. Its investment activities are categorised
under the following: resources, financial services, property, energy and
strategic investments. As a black owned and managed company operating in a
transforming South Africa, Shanduka is proud to be doing business and
contributing to the transformation of the economy and society during a
period of great and positive change on the African continent. Its
investments include, amongst others, Mondi Shanduka Newsprint, Kangra Coal,
Lace Diamond Mine and Assore Limited.
Key personalities
Cyril Ramaphosa (Chairman)
Rowan Smith
Kojo Mills
Phuti Malabie
Beulah van Wyk
Steve van der Klis
Brighton Nene
Karabo Tshailane
Thandeka Ncube
Maureen Mphatsoe
Corporate Advisors to Scaw SA:
Webber Wentzel Bowens
Investec Corporate Finance
Piton
Nedbank Corporate
Corporate Advisors to the BEE Consortium:
Edward Nathan Sonnenbergs
Java Capital
01 March 2007
Sponsor: J.P.Morgan Equities Limited
Date: 01/03/2007 16:00:07 Produced by the JSE SENS Department.
