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Scl - Sacoil Holdings Limited - Proposed Transactions And Salient Dates And

Release Date: 11/03/2011 13:11:39      Code(s): SCL
SCL - SacOil Holdings Limited - Proposed transactions and salient dates and     
times of the proposed transactions                                              
SacOil Holdings Limited                                                         
Incorporated in the Republic of South                                           
Africa                                                                          
Registration number: 1993/000460/06                                             
Share code: SCL                                                                 
ISIN code: ZAE000127460                                                         
("SacOil" or "the Company")                                                     
Proposed transactions and salient dates and times of the proposed transactions  
1. Proposed transactions                                                        
SacOil Shareholders ("Shareholders") are referred to the detailed announcement  
published on Securities Exchange News Service on 4 March 2011 ("the             
Announcement"), in which Shareholders were advised of the following:            
*     the proposed transfer by Semliki Energy SPRL ("Semiliki"), a 50 per cent  
subsidiary of SacOil, of a 60 per cent interest ("the Interest") in Block III,  
Albertine Graben, Democratic Republic of Congo ("DRC") to Total E&P RDC ("the   
Transfer").                                                                     
Shareholders are advised that, in addition to the above, SacOil proposes to     
enter into the following transactions which are subject to shareholder          
approval:                                                                       
*    the proposed specific issue of SacOil ordinary shares to the executive     
directors of SacOil in the event that the bonuses detailed in paragraph 2       
below are settled in whole or in part through the issue of SacOil ordinary      
shares ("Bonus Issues");                                                        
*    the proposed specific issue of 796 577 SacOil ordinary shares at an issue  
price of R2.16 per SacOil ordinary share to Renaissance BJM Securities          
(Proprietary) Limited ("Renaissance") in part settlement of the fee due to      
Renaissance for advisory services rendered in respect of the Transfer           
(Specific Issue to Renaissance");                                               
*    the proposed specific issue of SacOil ordinary shares to Renaissance, in   
the event of Renaissance electing to convert any amount repaid by SacOil under  
the term loan facility detailed in paragraph 4 below into SacOil ordinary       
shares ("Conversion Issue");                                                    
*    the proposed grant of call options to Renaissance as detailed in           
paragraph 5 below ("Call Options"), which grant shall constitute a specific     
issue of options for cash by SacOil; and                                        
*    the proposed implementation of a memorandum of agreement dated 28          
February 2011 ("Encha Memorandum of Agreement") with Encha Group Limited        
("Encha") and a specific issue of SacOil ordinary shares to Encha, a related    
party, in the event of SacOil electing to settle any remuneration due to Encha  
in terms of the Encha Memorandum of Agreement through the issue of SacOil       
ordinary shares ("Specific Issue to Encha").                                    
The Bonus Issues, the Conversion Issue, the Specific Issue to Renaissance, the  
Call Options, the Encha Memorandum of Agreement and the Specific Issue to       
Encha are collectively referred to as the "Transactions".                       
2. Bonus Issues                                                                 
2.1 AIM Admission Bonuses                                                       
In terms of their service contracts with the Company, Mr R Vela and Mr C Bird   
are entitled to bonuses ("AIM Admission Bonuses") within 30 days of the date    
of the admission of all the SacOil ordinary shares to trading on the            
Alternative Investment Market operated by the London Stock Exchange             
("Admission"). Mr R Vela and Mr C Bird are entitled to an amount equal to 1.5   
per cent and 0.5 per cent, respectively, of the increase in the market          
capitalisation of the Company from 20 September 2010 to the date of the         
Admission.                                                                      
The AIM Admission Bonuses are payable either:                                   
* In cash; or                                                                   
* By the allotment and issue of such number of SacOil ordinary shares,          
credited as fully paid, at the 30-day volume weighted average price ("VWAP")    
of SacOil`s ordinary shares as at the date of Admission.                        
2.2 Annual Bonuses                                                              
In terms of their service contracts with the Company, Mr R Vela, Mr C Bird and  
Mrs C de Beer are entitled to annual bonuses ("Annual Bonuses") within 30 days  
of the anniversary of the commencement date of Mr R Vela, Mr C Bird and Mrs C   
de Beer`s service agreements with the Company, being 1 October 2010             
("Anniversary Date").                                                           
The amounts of the Annual Bonuses are as follows:                               
* Mr R Vela is entitled to an amount equal to 1.5 per cent of the increase in   
the market capitalisation of the Company during the 12 months preceding each    
Anniversary Date calculated as the sum of the market capitalisation on the      
last day of trading of each calendar month of the 12 calendar months            
immediately preceding the relevant Anniversary Date divided by 12 less the      
market capitalisation on the first business day being 12 months prior to the    
relevant Anniversary Date;                                                      
* Mr C Bird is entitled to an amount equal to 0.5 per cent of the increase in   
the market capitalisation of the Company during the 12 months preceding each    
Anniversary Date calculated as the sum of the market capitalisation on the      
last day of trading of each calendar month of the 12 calendar months            
immediately preceding the relevant Anniversary Date divided by 12 less the      
market capitalisation on the first business day being 12 months prior to the    
relevant Anniversary Date; and                                                  
* Mrs C de Beer may be awarded an amount as determined by SacOil`s              
Remuneration Committee but limited to 2 times her basic annual salary.          
The Annual Bonuses are payable either:                                          
* In cash; or                                                                   
* By the allotment and issue of such number of SacOil ordinary shares,          
credited as fully paid, at the 30-day VWAP on each Anniversary Date (or, in     
the case of Mrs C de Beer, on the date of issue of such SacOil ordinary         
shares).                                                                        
The maximum number of SacOil ordinary shares that may be issued to Mr R Vela    
and Mr C Bird on a cumulative basis in terms of the Bonus Issues at each        
Anniversary Date is limited to 3 per cent and 1 per cent, respectively, of the  
total number of issued SacOil ordinary shares.                                  
The Bonus Issues have been approved by the SaOil Remuneration Committee.        
Mr R Vela, Mr C Bird and Mrs C de Beer are executive directors of SacOil and    
accordingly, if the Bonus Issues are settled through the issue of SacOil        
ordinary shares, the issues will be to related parties and will require         
approval by a 75 per cent majority of the votes cast in favour of such          
resolution by all Shareholders present or represented by proxy at a general     
meeting, excluding Mr R Vela, Mr C Bird and Mrs C de Beer and their             
associates.                                                                     
3. Specific Issue to Renaissance                                                
On 5 January 2011, SacOil entered into an agreement with Renaissance (the       
"Renaissance Service Agreement") in terms of which Renaissance undertook to     
act as exclusive financial advisor to SacOil with respect to any potential      
investment by the Total Group, directly or indirectly, in Block 3. The fee      
payable by SacOil for financial advisory services rendered by Renaissance in    
terms of the Renaissance Service Agreement is US$500 000, and is payable as     
follows:                                                                        
*    US$ 250 000 in cash; and                                                   
*    796 577 SacOil ordinary shares to be issued at R2.16 per SacOil ordinary   
share being the higher of (1) the 30-day VWAP of SacOil`s ordinary shares up    
to the last trading day prior to the Announcement and (2) the closing price of  
SacOil`s ordinary shares on the last trading day prior to the Announcement,     
converted at R6.88 to US$1.0, being the closing Rand/US$ exchange rate on the   
last trading date prior to the Announcement.                                    
The above fee is payable to Renaissance, subject to Shareholder approval,       
within 7 business days following the payment by Total to SacOil of any          
consideration relating to the Transfer.                                         
The Specific Issue to Renaissance requires approval by a 75 per cent majority   
of the votes cast in favour of such resolution by all Shareholders present or   
represented by proxy at a general meeting                                       
4. Conversion Issue                                                             
On 18 February 2011 SacOil entered into an agreement with Renaissance, which    
agreement was amended and restated on 3 March 2011 ("Facility Agreement"), to   
raise a maximum of US$30.9 million ("the Facility"). The Facility may be drawn  
down in 3 tranches as follows:                                                  
*   Tranche A: the amount of US$12.9 million;                                   
*   Tranche B: a maximum of the Rand equivalent of US$12.0 million; and         
*   Tranche C: a maximum of the Rand equivalent of US$6.0 million.              
In terms of the Facility Agreement, Renaissance shall have the right to         
convert any amount repaid by SacOil under the Facility into SacOil ordinary     
shares in accordance with the following calculation: the Rand value of the      
amount being repaid, converted from US$ into Rand by the calculation agent,     
being Renaissance Securities (Cyprus) Limited, at the spot rate available to    
Renaissance on the date that either Tranche A, Tranche B or Tranche C is        
advanced to SacOil in terms of the Facility Agreement ("Utilisation Date")      
divided by the conversion price calculated as a 10 per cent discount to the 30- 
day VWAP on the Utilisation Date. The Facility Agreement also provides for      
Renaissance to elect to cash settle the Conversion Issue.                       
The Conversion Issue constitutes a specific issue of shares for cash in terms   
of Section 5 of the Listings Requirements and will require approval by a 75     
per cent majority of the votes cast in favour of such resolution by all         
Shareholders present or represented by proxy at a general meeting.              
5. Call options                                                                 
In terms of letters of confirmation between SacOil and Renaissance,             
Renaissance has also been granted 6 394 888 call options calculated with        
reference to 10 per cent of the US$ value of Tranche A converted at R7.20 to    
US$1.0, divided by R1.45 being a 10 per cent discount to the 30-day VWAP on 18  
February 2011 ("Tranche A Strike Price"). These options are exercisable at the  
Tranche A Strike Price. The number of options granted in respect of Tranche B   
is 5 626 234 call options calculated with reference to 10 per cent of Tranche   
B converted at R6.97 to US$1.0, divided by R1.48 being a 10 per cent discount   
to the 30-day VWAP on 28 February 2011 ("Tranche B Strike Price). These         
options are exercisable at the Tranche B Strike Price.                          
The Call Options will require approval by a 75 per cent majority of the votes   
cast in favour of such resolution by all Shareholders present or represented    
by proxy at a general meeting.                                                  
6. Encha Memorandum of Agreement                                                
On 28 February 2011 SacOil entered into the Encha Memorandum of Agreement in    
terms of which Encha undertook to utilise its reasonable commercial endeavours  
to:                                                                             
*   assist SacOil with the raising of capital (" Capital Raising");             
*   assist SacOil with the procurement of security for third party funding      
which security may include, at the election of Encha, the cession and pledge    
of SacOil ordinary shares held by Encha to a funder of SacOil in securitatem    
debiti, as contemplated in the Encha Memorandum of Agreement ("Share Pledge");  
and                                                                             
*   introduce Relevant Business Opportunities to SacOil and facilitate the      
implementation of transactions implemented by SacOil in respect of relevant     
business opportunities introduced to SacOil by Encha in terms of the Encha      
Memorandum of Agreement ("Designated Transactions").                            
Encha is entitled to receive remuneration from SacOil in relation to the        
provision of these services in the form of cash or SacOil ordinary shares, at   
the election of SacOil, as follows:                                             
*   in respect of Capital Raising, a fee equivalent to 2.5 per cent of the      
capital raised;                                                                 
*   in respect of a Share Pledge, a fee equivalent to 3 per cent of the         
aggregate value of the SacOil Ordinary Shares subject to the Share Pledge; and  
*   in respect of a Designated Transaction, a fee equivalent to 1.5 per cent    
of the value of the Designated Transaction.                                     
6.1 Specific Issue to Encha                                                     
In terms of the Encha Memorandum of Agreement, SacOil may elect to settle any   
remuneration due to Encha in terms of the Encha Memorandum of Agreement         
through the issue of SacOil ordinary shares. The prices at which such SacOil    
ordinary shares will be issued to Encha and the number of SacOil ordinary       
shares to be issued are as follows:                                             
*   in respect of a Capital Raising fee, Encha shall be issued with such        
number of SacOil ordinary shares as have an aggregate value equivalent to the   
Capital Raising fee. The value of the SacOil ordinary shares to be issued       
shall be deemed to be the closing price of a SacOil ordinary share on the JSE   
on the date of first receipt of funds by SacOil under the relevant Capital      
Raising;                                                                        
*   in respect of a Designated Transaction fee, Encha shall be issued with      
such number of SacOil ordinary shares as have an aggregate value equivalent to  
the Designated Transaction fee. The value of the SacOil ordinary shares to be   
issued shall be deemed to be the closing price of the SacOil ordinary shares    
on the JSE on the implementation date of the Designated Transaction; and        
*   in respect of a Share Pledge fee, Encha shall be issued with such number    
of SacOil ordinary shares as have an aggregate value equivalent to the Share    
Pledge fee. The value of the SacOil ordinary shares to be issued shall be       
deemed to be the closing price of the SacOil ordinary shares on the JSE on the  
date of the Share Pledge.                                                       
Encha is a material shareholder of SacOil. Accordingly, the SacOil ordinary     
shares issued in terms of the Specific Issue to Encha will be to a related      
party and will require approval by a 75 per cent majority of the votes cast in  
favour of such resolution by all Shareholders present or represented by proxy   
at a general meeting.                                                           
In addition, SacOil will be required to obtain a fairness opinion from a JSE    
approved Independent Expert at each settlement date in accordance with          
paragraph 5.51(f) of the Listings Requirements. The details relating to each    
settlement of remuneration due to Encha through the issue of SacOil Ordinary    
Shares will be announced on SENS and in the press.                              
7. Pro forma financial effects                                                  
The table below sets out the unaudited pro forma financial effects of the       
Transactions on SacOil`s basic earnings per share, headline earnings per        
share, net asset value per share and tangible net asset value per share.        
The unaudited pro forma financial effects have been prepared to illustrate the  
impact of the Transactions on the reported financial information of SacOil for  
the six months ended 31 August 2010, adjusted for the the acquisition by        
SacOil, through a wholly owned Nigerian subsidiary, of a 20 per cent working    
interest in the OPL 233 licence in Nigeria ("the OPL 233 Acquisition") which    
was announced on 7 December 2010, the issue of 46 666 666 SacOil Ordinary       
Shares to the Public Investment Corporation for cash amounting to R70 000 000   
wich was announced on 21 February 2011 ("Issue to PIC"), the acquisition by     
SacOil, through the joint venture between SacOil and Energy Equity Resources    
Limited, of 20 per cent participating interest in OPL 281 under the OPL 281     
Production Sharing Contract which was announced on 28 February 2011 ("OPL 281   
Acquisition"), the the restructure of SacOil`s proposed investment in oil       
concession rights pertaining to Block III, Albertine Graben in the DRC ("Block  
III Rights") and oil concession rights pertaining to Block I, Albertine Graben  
in the DRC (collectively "the Restructure") which was approved by Shareholders  
in general meeting on 20 September 2010 and the Transfer which was announced    
on 4 March 2011. The unaudited pro forma financial effects are based on the     
assumption that the Transactions occurred on 1 March 2010 for income statement  
purposes and on 31 August 2010 for balance sheet purposes.                      
The pro forma financial effects have been prepared using accounting policies    
that comply with IFRS and that are consistent with those applied in the         
audited annual financial statements of SacOil for the year ended 28 February    
2010.                                                                           
The pro forma financial effect of the following have been shown separately in   
the table below:                                                                
*     the Bonus Issues;                                                         
*     the Conversion Issue; and                                                 
*     the Call Options.                                                         
The pro forma financial effects of the Transfer and the Specific Issue to       
Renaissance have been shown, collectively, as the Specific Issue to             
Renaissance forms part of the transaction costs relating to the Transfer. The   
pro forma financial effects in respect of the Bonus Issues have been            
calculated based on the following assumptions:                                  
AIM Admission Bonuses                                                           
*   the AIM Admission Bonuses will be settled through the issue of SacOil       
ordinary shares;                                                                
*   the increase in the market capitalisation has been calculated for           
illustrative purposes as the market capitalisation on 3 March 2011, based on    
674 090 410 SacOil ordinary shares in issue on that date and the closing        
SacOil ordinary share price on 3 March 2011 of R2.16, less the market           
capitalisation on 20 September 2010; and                                        
*   the number of SacOil ordinary shares to be issued to Mr R Vela and Mr C     
Bird have been calculated for illustrative purposes using the 30- day VWAP to   
3 March 2011 of R1.79.                                                          
Annual Bonuses                                                                  
*   the Annual Bonuses will be settled through the issue of SacOil ordinary     
shares;                                                                         
*   the increase in the average market capitalisation has been calculated for   
illustrative purposes as the market capitalisation on 3 March 2011, based on    
674 090 410 SacOil ordinary shares in issue on that date and the closing        
SacOil ordinary share price on 3 March 2011 of R2.16, less the market           
capitalisation on 1 October 2010;                                               
*   the Annual Bonus payable to Mrs C de Beer will be equal to 2 times her      
annual basic salary; and                                                        
*   the number of SacOil ordinary shares to be issued to Mr R Vela, Mr C Bird   
and Mrs C de Beer have been calculated for illustrative purposes using the 30-  
day VWAP to 3 March 2011 of R1.79.                                              
The pro forma financial effects of the Conversion Issue have been calculated    
based on the following assumptions:                                             
*   Tranche B and Tranche C were repaid and Renaissance elected to convert      
such repayments into SacOil ordinary shares on 1 March 2010. The Rand amounts   
repaid in respect of Tranche B and Tranche C were calculated for illustrative   
purposes using the exchange rate of R6.89 to US$1.00 on                         
3 March 2011 and the illustrative number of SacOil ordinary shares to be        
issued to Renaissance following the Conversion Issue has been calculated based  
on a 10 per cent discount to the 30-day VWAP to 3 March 2011 of R1.79.          
The pro forma financial effects of the Call Options have been calculated based  
on the following assumptions:                                                   
*   The IFRS 2 charge was calculated based the grant of 6 394 888 call options  
at the Tranche A Strike Price and 5 626 234 call options at the Tranche B       
Strike Price; and                                                               
*    The dilutionary effect of the Call Options has been calculated using the   
SacOil ordinary share price on 18 February 2011 of R1.85 in respect of Tranche  
A and 28 February 2011 of R1.96 in respect of Tranche B.                        
The unaudited pro forma financial effects set out below are the responsibility  
of the Directors and have been prepared for illustrative purposes only and      
because of their nature may not fairly present the financial position, changes  
in equity, results of operations or cash flows of SacOil after the              
Transactions.                                                                   
                                                       After            After   
                                                     OPL 233          OPL 233   
Acqui-           Acqui-   
                                  After OPL          sition,          sition,   
                                        233        the Issue        the Issue   
                                     Acqui-      to PIC, the      to PIC, the   
sition,          OPL 281          OPL 281   
                                   Issue to           Acqui-           Acqui-   
                                   PIC, the      sition, the      sition, the   
                                    OPL 281     Restructure,     Restructure,   
Acqui-              the              the   
                     Before     sition, the         Transfer         Transfer   
                        the     Restructure          and the          and the   
                  Transact-         and the            Bonus       Conversion   
ions(1)     Transfer(2)        Issues(3)         Issue(4)   
Loss per share                                                                  
(cents)               (2.21)         (25.48)          (35.05)          (24.15)  
Diluted loss per                                                                
share (cents)         (2.21)         (25.48)          (35.05)          (24.15)  
Headline loss                                                                   
per share                                                                       
(cents)               (2.21)          (6.59)          (17.34)           (8.57)  
Diluted                                                                         
headline loss                                                                   
per share                                                                       
(cents)               (2.21)          (6.59)          (17.34)           (8.57)  
Net asset value                                                                 
per share                                                                       
(cents)                13.39           52.76            49.53            71.42  
Tangible net                                                                    
asset value per                                                                 
share (cents)          13.39         (32.34)          (30.36)             1.01  
Weighted                                                                        
average                                                                         
number of                                                                       
shares in issue                                                                 
(`000)               314 800         362 263          386 389          439 305  
Diluted                                                                         
weighted                                                                        
average                                                                         
number of                                                                       
shares in issue                                                                 
(`000)               314 800         362 263          386 389          439 305  
Number of                                                                       
shares in issue                                                                 
(`000)               321 635         369 098          393 224          446 140  
After            After                 
                                       OPL 233          OPL 233                 
                                        Acqui-           Acqui-                 
                                       sition,          sition,                 
the Issue        the Issue                 
                                   to PIC, the      to PIC, the                 
                                       OPL 281          OPL 281                 
                                        Acqui-           Acqui-                 
sition, the      sition, the                 
                                  Restructure,     Restructure,                 
                                           the              the                 
                                      Transfer         Transfer                 
and the          and the                 
                                          Call        Transact-             %   
                                    Options(5)          ions(6)     Change(7)   
Loss per share                                                                  
(cents)                                 (26.02)          (32.61)       (27.99)  
Diluted loss per                                                                
share (cents)                           (26.02)          (32.42)       (27.24)  
Headline loss                                                                   
per share                                                                       
(cents)                                  (7.13)          (17.85)      (170.79)  
Diluted                                                                         
headline loss                                                                   
per share                                                                       
(cents)                                  (7.13)          (17.74)      (169.20)  
Net asset value                                                                 
per share                                                                       
(cents)                                   52.23            67.34         27.62  
Tangible net                                                                    
asset value per                                                                 
share (cents)                           (32.87)             0.54        101.67  
Weighted                                                                        
average                                                                         
number of                                                                       
shares in issue                                                                 
(`000)                                  362 263          463 431         27.93  
Diluted                                                                         
weighted                                                                        
average                                                                         
number of                                                                       
shares in issue                                                                 
(`000)                                  364 997          466 165         28.68  
Number of                                                                       
shares in issue                                                                 
(`000)                                  369 098          470 266         27.41  
Notes:                                                                          
1. The "Before the Transactions" basic earnings, diluted earnings, headline     
earnings and diluted headline earnings per share have been extracted without    
adjustment from the unaudited, published results of SacOil for the six months   
ended 31 August 2010. The "Before the Transactions" net asset value and         
tangible net asset value per share have been calculated from the financial      
information presented in the unaudited, published results of SacOil for the     
six months ended 31 August 2010.                                                
2. The "After the OPL 233 Acquisition, the Issue to PIC, the OPL 281            
Acquisition, the Restructure and the Transfer" assumes:                         
a. Payment by SacOil of 50 per cent of the US$0.3 million upon execution of     
the OPL 233 Farm in agreement, converted at R6.87 to US$1, being the closing    
rate on 3 December 2010, which has been capitalised in terms of IFRS 6:         
Exploration for and Evaluation of Mineral Resources;                            
b. A short-term obligation of 50 per cent of US$7.8 million, converted at       
R6.87 to US$1.0, in respect of that portion of the OPL 233 farm-in fee payable  
upon receipt of consent from the Federal Government of Nigeria for the Farm in  
and which have been capitalised in terms of IFRS 6: Exploration for and         
Evaluation of Mineral Resources;                                                
c. A long-term obligation of US$10.0 million, converted at R6.87 to US$1, in    
respect of SacOil`s 20 per cent share of the costs of the minimum Work          
Programme and which have been capitalised in terms of IFRS 6:    Exploration    
for and Evaluation of Mineral Resources;                                        
d. The issue of 46 666 666 SacOil Ordinary Shares to PIC at an issue price of   
R1.50 per SacOil Ordinary Share for cash;                                       
e. Payment by SacOil of 50 per cent of the US$20.0 million upon execution of    
the OPL 281 farm-in agreement, converted at R7.12 to US$1, being the closing    
rate on 24 February 2011, which has been capitalised in terms of IFRS 6:        
Exploration for and Evaluation of Mineral Resources;                            
f. A long-term obligation of US$12.5 million, converted at R7.12 to US$1, in    
respect of SacOil`s 20 per cent share of the costs of the minimum Work          
Programme and which have been capitalised in terms of IFRS 6:    Exploration    
for and Evaluation of Mineral Resources;                                        
g. The payment of transaction costs of R0.3 million relating to the OPL 233     
Acquisition, R1.8 million relating to the Issue to PIC and R0.3 million         
relating to the OPL 281 Acquisition;                                            
h. SacOil (Proprietary) Limited acquired the Block 3 Rights as a part of the    
Restructure and has been consolidated into SacOil as SacOil controls the        
management and decisions of SacOil (Proprietary) Limited.    The Block 3        
Rights held by SacOil (Proprietary) Limited were fair valued    following the   
Restructure;                                                                    
i. Transfer of the Interest for a consideration of US$15.0 million, converted   
at R6.89 to US$1.0 on 3 March 2011. Due to its nature the contingent            
consideration amounting to US$54.0 million has not been raised in respect of    
the Transfer as the probability of the contingent consideration materialising   
cannot be measured realiably at this stage;                                     
j. A loss on Transfer of R68.4 million by SacOil and the allocation to outside  
shareholders of their share of the loss on Transfer amounting to R68.4          
million;                                                                        
k. Settlement of the loan to Divine Inspiration Group (Proprietary) Limited     
("DIG") amounting to R12.6 million through the receipt of R9.89 million         
(US$1.44 million converted at R6.89 to US$1 on 3 March 2011) from DIG in cash   
and capitalisation of costs amounting R2.67 million; and                        
l. The payment of transaction costs of R4.19 million relating to the Transfer.  
The transaction costs include an amount of R1.72 million due to Renaissance in  
part settlement of advisory fees due to Renaissance in respect of the Transfer  
and which will be settled through the issue of 0.8 million SacOil Ordinary      
Shares at an issue price of R2.16 per SacOil ordinary share in terms of the     
Specific Issue to Renaissance as detailed in paragraph 3 above.                 
3. The "After the OPL 233 Acquisition, Issue to PIC, the OPL 281 Acquisition,   
the Restructure, the Transfer and the Bonus Issues " assumes:                   
a. Adjustments in respect of notes 2 a. to l. above;                            
b. The issue of 9 672 425 and 3 224 142 SacOil ordinary shares at the 30-day    
VWAP to 3 March 2011 of R1.79 to Mr R Vela and Mr C Bird, respectively, in      
settlement of the pro forma liability in respect of the AIM Admission Bonuses   
calculated as detailed in the assumptions above;                                
c. The issue of 7 288 813 and 2 429 604 SacOil Ordinary Shares at the 30-day    
VWAP to 3 March 2011 of R1.79 to Mr R Vela and Mr C Bird, respectively, in      
settlement of the pro forma liability in respect of the Annual Bonuses          
calculated as detailed in the assumptions above; and                            
d. The issue of 1 511 184 SacOil Ordinary Shares at the 30-day VWAP to 3 March  
2011 of R1.79 to Mrs C de Beer in settlement of the pro forma liability in      
respect of her Annual Bonus calculated as detailed in the assumptions above.    
4. The "After the OPL 233 Acquisition, Issue to PIC, the OPL 281 Acquisition,   
the Restructure, the Transfer and the Conversion Issue" assumes:                
a. Adjustments in respect of notes 2 a. to l. above;                            
b. The conversion of Tranche B and Tranche C on 3 March 2010 into 77 041 627    
SacOil ordinary shares at a 10 per cent discount to the 30-day VWAP on 3 March  
2011 of R1.61 resulting in an IFRS 2 charge of R13.8 million; and               
5. The "After the OPL 233 Acquisition, Issue to PIC, the OPL 281 Acquisition,   
the Restructure, the Transfer and the Call Options" assumes:                    
a. Adjustments in respect of notes 2 a. to l. above; and                        
b. The granting of 6 394 888 call options on 1 March 2010 at a 10 per cent      
discount to the 30-day VWAP on 18 February 2011 of R1.45 resulting in an IFRS   
2 charge of R1.03 million.                                                      
c. The granting of 5 626 234 call options on 1 March 2010 at a 10 per cent      
discount to the 30-day VWAP on 28 February 2011 of R1.49 resulting in an IFRS   
2 charge of R0.9 million.                                                       
6. The "After the OPL 233 Acquisition, the Issue to PIC, the OPL 281            
Acquisition, the Restructure, the Transfer and the Transactions" assumes all    
of the adjustments detailed in notes 2 to 5 above.                              
Measured as the "After the OPL 233 Acquisition, the Issue to PIC, the OPL 281   
Acquisition, the Restructure, the Transfer and the Transactions" column as a    
percentage of the "After the OPL 233 Acquisition, the Issue to PIC, the OPL     
281 Acquisition, the Restructure and the Transfer" column.                      
8. Documentation                                                                
A circular containing the information required in terms of the JSE Listing      
Requirements and incorporating a notice convening a SacOil general meeting to   
approve the implementation of the Transfer and the Transactions will be posted  
to beneficial Shareholders on or about 16 March 2011.                           
9. Salient dates and times                                                      
                                                                         2011   
Last day for receipt of forms of proxy for the General                          
Meeting by no later than 10:00 on                            Tuesday, 29 March  
General Meeting of Shareholders to be held at 10:00 on      Thursday, 31 March  
Results of the General Meeting of Shareholders published                        
on SENS on                                                  Thursday, 31 March  
Results of the General Meeting of Shareholders published in                     
the press on                                                   Friday, 1 April  
Specific Issue to Renaissance SacOil Ordinary Shares issued                     
and listed, subject to Shareholder approval on                 Monday, 4 April  
Bryanston                                                                       
11 March 2011                                                                   
Sponsor                                                                         
BDO Corporate Finance                                                           
Corporate legal advisor                                                         
Deneys Reitz Inc.                                                               
Corporate Adviser                                                               
Renaissance BJM Securities (Proprietary) Limited                                
Independent Reporting accountants and Auditors                                  
BDO South Africa Corporation                                                    
Independent expert                                                              
Mazars Corporate Finance (Proprietary) Limited                                  
Date: 11/03/2011 13:11:38 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
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