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Wescoal - Financial Effects Of The Acquisition Of Anker Coal & Mineral Holdings

Release Date: 10/07/2006 14:10:03      Code(s): WSL
Wescoal - Financial effects of the acquisition of Anker Coal & Mineral Holdings 
          SA (Proprietary) Limited and withdrawal of cautionary                 
WESCOAL HOLDINGS LTD                                                            
(Incorporated in the Republic of South Africa)                                  
(Registration number 2005/006913/06)                                            
(JSE Share code: WSL & ISIN: ZAE000069639)                                      
("Wescoal" or "the company")                                                    
FINANCIAL EFFECTS OF THE ACQUISITION OF ANKER COAL & MINERAL HOLDINGS SA        
(PROPRIETARY) LIMITED AND WITHDRAWAL OF CAUTIONARY                              
INTRODUCTION                                                                    
Shareholders are referred to the announcement dated 31 May 2006, in terms of    
which it was announced that Wescoal has, subject to certain conditions          
precedent, agreed to purchase all the issued shares in and certain shareholders"
claims on loan account against Anker Coal & Mineral Holdings South Africa       
(Proprietary) Limited ("the acquisition").                                      
The unaudited proforma financial effects of the acquisition are hereby released.
UNAUDITED PRO FORMA FINANCIAL EFFECTS                                           
The table below sets out the unaudited pro forma financial effects of the       
acquisition on Wescoal"s published audited results for the year ended 31 March  
2006. The unaudited pro forma financial effects are presented for illustrative  
purposes only, are the responsibility of the directors and because of their     
nature may not be a true reflection of the impact of the acquisition on earnings
or asset values into the future. The unaudited pro forma effects are based on   
the assumptions that:                                                           
-    For the purposes of calculating the eearnings per share and headline       
     earnings per share as if the acquisition and the issue of consideration    
     shares for the acquisition were implemented on 1 April 2005 for the year   
ending 31 March 2006;                                                      
-    For the purposes of calculating the net asset value per share and net      
     tangible asset value per share as if the acquisition and the issue of      
     consideration shares were effected on 31 March 2006.                       
-    The adjustments relating to Anker SA are based on its unaudited draft      
     financial statements for the year ended 31 December 2005. The directors of 
     Wescoal are satisfied with the quality of these draft financial statements 
     for the purposes of calculating the pro forma financial effects. The       
audited financial statements, including the independent reporting          
     accountants" audit opinion thereon, will be included in the circular to    
     shareholders to be issued in due course.                                   
                                        Before(1)    After        %             
Change        
     Earnings per share(2)              4.7          (88.7)       (>100)        
     Headline earnings per share(2)     4.2          (60.8)       (>100)        
     Diluted earnings per share(2)      4.7          (88.7)       (>100)        
Diluted headline earnings per      4.2          (60.8)       (>100)        
     share(2)                                                                   
     Net asset value per share(3)       41.1         53.6         30.4          
     Net tangible asset value per       9.6          (45.7)       (>100)        
share(3)                                                                   
     Notes:                                                                     
     (1)  The before financial information has been extracted without adjustment
          from the published audited results of Wescoal for the year ended 31   
March 2006.                                                           
     (2)  Earnings per share and Headline earnings per share in the After column
          represent the illustrative pro forma amounts had the acquisition been 
          effective from 1 April 2005. Adjustments were based on the unaudited  
draft financial statements of Anker Coal and Mineral Holdings SA (Pty)
          Ltd"s ("Anker SA") for the year ended 31 December 2005. The weighted  
          average number of shares in issue was adjusted to account for 28 000  
          000 consideration shares to be issued at R1.00 per share.             
(3)  Net asset value and tangible net asset value in the After column      
          represent the illustrative amounts had the acquisition been effective 
          on 31 March 2006. Adjustments were based on Anker SA"s unaudited draft
          balance sheet as at 31 December 2005. The number of shares in issue   
was adjusted to account for 28 000 000 consideration shares to be     
          issued at R1.00 per share. A Purchase Price Allocation ("PPA")        
          exercise in terms of IFRS 3: Business Combinations has not yet been   
          performed. The PPA will be completed once the CPR, which is currently 
in progress, has been completed. For the purposes of the above pro    
          forma financial effects, the difference between the fair value of the 
          purchase consideration and the book value of the net assets acquired  
          has been attributed to mining rights.  Following the PPA exercise, the
values attributed to assets and liabilities acquired may differ and   
          will be disclosed in the circular to shareholders.                    
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT                                           
Caution is no longer required to be exercised by shareholders when dealing in   
their securities.                                                               
Johannesburg                                                                    
Monday, 10 July 2006                                                            
Designated adviser               Exchange Sponsors                              
Auditors                         Middel & Partners                              
Competent person                 SRK                                            
Attorneys                        Kim Warren, Rambau & Associates                
Warning: The listing of ordinary shares in the company is on ALTx.  Investors   
are advised of the risks of investing in a company listed on ALTx. Investors are
advised that the JSE does not guarantee the viability or the success of a       
company listed on ALTx.  In terms of the Listings Requirements, the company is  
obliged to appoint and retain a Designated Adviser, which is required to, inter 
alia, attend all board meetings held by the company to ensure that all the      
Listings Requirements and applicable regulations are complied with, approve the 
Financial Director of the company and guide the company in a competent,         
professional and impartial manner.  If the company fails to retain a Designated 
Adviser, it must make arrangements to appoint a new Designated Adviser within 10
business days, failing which the company faces suspension of trading of its     
securities.  If a Designated Adviser is not appointed within 30 days of its     
suspension, the company faces the termination of its listing without the        
prospect of an appropriate offer to minority shareholders.                      
Date: 10/07/2006 02:10:09 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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