Sah - South African Coal Mining Holdings Limited - Announcement Of A Firm Release Date: 30/03/2010 11:53:02 Code(s): SAH
SAH - South African Coal Mining Holdings Limited - Announcement of a Firm
SOUTH AFRICAN COAL MINING HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/009012/06)
Share code: SAH & ISIN: ZAE000102034
ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER RECEIVED FROM WESCOAL
HOLDINGS LIMITED ("WESCOAL") TO ACQUIRE THE ENTIRE ISSUED SHARE CAPITAL OF
1.1 Shareholders are referred to previous announcements by SACMH, the latest
being dated 18 February 2010, that SACMH regularly receives unsolicited
offers to buy or invest in its business. The SACMH board ("Board")
undertook that all serious offers in respect of which the Board has
received satisfactory external proof of funding will be submitted to
shareholders for consideration as soon as practically possible.
1.2 On 24 March 2010 the Board received a letter from Wescoal containing a
firm intention to make an offer to acquire all the issued ordinary share
capital of SACMH, which, if concluded, will be an affected transaction as
defined by the Securities Regulation Code and Rules ("SRP Code") of the
Securities Regulation Panel ("SRP").
1.3 Details of the offer and the conditions precedent to which it is subject
are set out below.
1.4 This announcement summarises the information provided in the letter of
firm intention to make an offer addressed to the Board.
2. THE OFFER
2.1 The offeror:
Wescoal Holdings Limited ("Wescoal") is a public company incorporated in
South Africa, listed on the JSE Limited. Wescoal is a coal trader and
owns a coal mine. Wescoal owns no shares in SACMH.
2.2 The offer:
Wescoal notified the Board of its firm intention to make an offer to
acquire all the issued shares of SACMH in exchange for the issue by
Wescoal of 11.11 Wescoal shares for every 100 SACMH ordinary shares held
("Wescoal Offer" or "Transaction"). The Wescoal Offer was based on
certain assumptions. Wescoal reserved the right to either amend the offer
price downwards or withdraw the offer if the actual number of shares and
total liabilities exceeded those assumptions.
The scheme consideration will entail that 50 222 415 Wescoal shares will
be issued at an issue price of 90 cents per share, for a total purchase
consideration of R45 200 174.
2.3 Manner of giving effect to the Wescoal Offer
2.3.1 To implement the Wescoal Offer, Wescoal intends to propose a scheme
of arrangement in terms of section 311 of the Companies Act, 1973
("Act") between Wescoal and all the ordinary shareholders of SACMH
for Wescoal to acquire 100% of the total issued ordinary share
capital of SACMH ("Scheme"). The purchase consideration will be
settled by the issue of 11.11 Wescoal shares for every 100 SACMH
ordinary shares held, once the Scheme becomes operative. The Wescoal
Offer will be made in accordance with the SRP Code.
2.3.2 Alternatively to the Scheme, Wescoal will make a substitute offer to
all SACMH`s ordinary shareholders, to acquire all of their shares in
exchange for 11.11 Wescoal shares for every 100 SACMH shares held,
on condition that in order to succeed it should it be accepted by
shareholders in respect of 50,1% or more of the SACMH ordinary
shares that are the subject matter of the substitute offer.
2.3.3. If the Scheme is successful or the substitute offer becomes
unconditional, application will be made to the JSE Limited ("JSE")
to terminate the listing of the ordinary shares of SACMH on the JSE.
2.3.4 On the effective date of the Scheme, Wescoal will invite two
representatives of the former majority shareholders of SACMH to join
2.4 Conditions precedent
The Scheme and/or the substitute offer and/or the Transaction will be
subject to the following suspensive conditions:
2.4.1 Approval of the Transaction by the Board by not later than 30 April
2.4.2 That the four interrelated schemes of arrangement in respect of
South African Coal Mining (Breyten) (Pty) Limited, Ilanga Coal Mines
(Pty) Limited, South African Coal Mining Equipment Company (Pty)
Limited and South African Coal Mining Operations (Pty) Limited :
- are sanctioned by the High Court and implemented by not later than
30 April 2010;
- that there is no appeal, review or threatened legal action against
any of the said schemes; and
- that Wescoal be satisfied with the net result of the four schemes of
arrangement and court orders for the SACMH group, particularly its
balance sheet, assets and liabilities post the schemes by no later
than 30 April 2010;
2.4.3 That Standard Bank of South Africa (Pty) Limited ("SBSA"), the
secured financiers of SACMH, by not later than 31 May 2010:
- approves the Transaction in writing;
- undertakes in writing to restructure its loans to SACMH;
and that the terms and conditions of the revised arrangement between
SACMH and Standard Bank are to Wescoal`s satisfaction;
2.4.4 Wescoal obtaining irrevocable undertakings from two key SACMH
shareholders to accept the offer in terms of the Transaction by no
later than 30 April 2010;
2.4.5 Wescoal conducting a due diligence investigation into SACMH to its
complete satisfaction and concluding such investigation by not later
than 31 May 2010;
2.4.6 the approval by the shareholders of Wescoal of the Transaction and
issue of Wescoal shares in consideration, if required by JSE Limited
2.4.7 the approval of the Scheme by scheme members of SACMH at the scheme
meeting convened by the Court, representing not less than three-
fourths (75%) of the votes exercisable by scheme members present and
voting either in person or by proxy at the scheme meeting;
2.4.8 SACMH obtaining the requisite regulatory approvals, including
without limitation, the approval of the SRP and JSE of the
documentation/ circulars relating to the Scheme and/or the
2.4.9 the High Court sanctioning the Scheme in terms of the Companies Act;
2.4.10 a certified copy of the Order of Court sanctioning the Scheme being
lodged with and registered by the Registrar of Companies in terms of
the Companies Act;
2.4.11 the unconditional approval of the Scheme or the Transaction by the
Competition Authorities and any other regulatory approvals to the
extent required; and
2.4.12 in respect of the substitute offer only, acceptances being received
in respect of a minimum of 50.1% of the votes attached to all the
issued ordinary shares of SACMH and approval of the substitute offer
by all regulatory authorities including the Competition Authorities.
Wescoal shall be entitled to waive any of the aforementioned
suspensive conditions or extend the dates for fulfilment.
2.5 Approvals, consents and undertakings received
The Board is not aware of any approvals, consents and undertakings
received by Wescoal at the date of making the Wescoal Offer. SBSA however
informed the Board that it has entered into an agreement with another
party ("Potential Preferred Offeror") to sell SBSA`s secured claim
against SACMH to the Potential Preferred Offeror, to grant the Potential
Preferred Offeror a period of exclusivity in respect thereof. .
3 OPINION AND RECOMMENDATIONS
On 18 March 2010 the Board received and accepted a proposal from the
Potential Preferred Offeror. Due to the time constraints in this
proposal, the Board obtained telephonic approval from the SRP to evaluate
and recommend the proposal prior to obtaining an opinion from an external
adviser as required by the SRP Code.
After having evaluated the terms and conditions of the proposal by the
Potential Preferred Offeror as well as an offer by another party (set out
in separate announcements), the Board believed that it was in the best
interests of the Company and its stakeholders to recommend the proposal
received from the Potential Preferred Offeror to its shareholders.
The Board is of the opinion that the Wescoal Offer received on 24 March
2010 is less attractive to SACMH and its stakeholders than the offer by
the Potential Preferred Offeror. The Board has therefore decided not to
recommend the Wescoal Offer to its shareholders.
The Board will appoint an external adviser to evaluate all offers
received and to make appropriate recommendations to the Board and SACMH
30 March 2010
Date: 30/03/2010 11:53:02 Supplied by www.sharenet.co.za
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