WSL - Wescoal Holdings Limited - Sale of Blesboklaagte washing plant Release Date: 15/08/2011 09:00:04 Code(s): WSL WSL - Wescoal Holdings Limited - Sale of Blesboklaagte washing plant
WESCOAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
JSE Share code: WSL ISIN: ZAE000069639
("Wescoal" or "the company" or "the group")
SALE OF BLESBOKLAAGTE WASHING PLANT
1 INTRODUCTION
Shareholders are advised that a subsidiary of Wescoal, Wescoal Mining (Pty)
Limited ("Wescoal Mining"), has entered into a Sale of Assets Agreement with
Slater Coal Marketing (Pty) Limited ("Slater") ("the transaction"), subject to
certain conditions precedent. The subject matter is the washing plant situated
at Portion 26 of the Blesboklaagte farm in Witbank, Mpumalanga ("the
Blesboklaagte plant").
2 BACKGROUND INFORMATION
Wescoal is a junior coal miner with a trading arm. The company recently entered
into a comprehensive restructuring programme to restore operations to
profitability and to strengthen its financial position. The coal washing
operations at Blesboklaagte has been unprofitable during previous financial
years and a decision was made to close the plant on 31 March 2011.
3 RATIONALE FOR THE DISPOSAL
The sale of the Blesboklaagte plant is in line with Wescoal`s strategy to focus
on profitable operations and to strengthen the group`s cash resources.
4 TERMS AND CONDITIONS OF THE DISPOSAL
4.1 On 12 August 2011 ("the signature date"), Wescoal entered into a Sale of
Assets Agreement for the sale of the Blesboklaagte plant to Slater.
4.2 The purchase price payable for the Blesboklaagte plant is the aggregate of
R 15 million plus Value Added Tax ("VAT").
4.3 The effective date of the transaction is 25 August 2011 ("the effective
date").
4.4 The purchase price will be payable as follows:
4.4.1 R 6 million (plus VAT), in cash to Wescoal Mining on the signature
date which has been received; and
4.4.2 the balance of R 9 million (plus VAT) shall be paid in three equal
monthly payments of R 3 million (plus VAT) each. Each payment shall be
made on the seventh day of each successive month, starting on 7 of
September 2011.
4.5 In the event that the washing operations at the Blesboklaagte plant are
halted within the first 12 months after the commencement of operations, or
14 months after signature date, whichever is the sooner, as a result of the
existing environmental compliance issues, then Slater retains the right of
ownership of the plant and Wescoal Mining will refund Slater R 7 million in
compensation to recover the loss of profits and the costs of relocating the
plant. The refund will be reduced on a pro-rata basis during the prescribed
12 or 14 month period.
5 CONDITIONS PRECEDENT
The disposal is conditional upon Wescoal Mining restoring the Blesboklaagte
plant to an operational condition.
6 UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL
The unaudited pro forma financial effects set out below are provided for
illustrative purposes only to provide information about how the disposal may
have impacted on Wescoal`s results and financial position. Due to the nature of
the unaudited pro forma financial effects, it may not give a fair presentation
of the company`s results and financial position after the disposal. The
unaudited pro forma financial effects are based on the audited annual financial
information of Wescoal at 31 March 2011. The directors of Wescoal are
responsible for the preparation of the unaudited pro forma financial effects.
"Before the Pro forma % Change
disposal" "After the
audited disposal"
annual unaudited
results for results for
the year end the year
31 March end
2011 31 March
2011
Loss per share (cents) (2) (29.1) (6.90) 76.29%
Headline (loss) per share (2) (26.2) (8.7) 66.63%
(cents)
Net asset value ("NAV") (4) 86.51 91.48 5.74%
per share (cents)
Net tangible asset value (4) 44.34 50.74 14.43%
("NTAV") per share (cents)
Weighted average shares in 150 271 150 271
issue (`000)
Shares in issue at year 157 931 157 931
end (`000)
Notes:
(1) The "Before the disposal" column has been extracted without adjustment,
from the audited annual results of Wescoal for the year ended 31 March
2011.
(2) The unaudited pro forma financial effects on the loss and headline loss per
share were prepared on the basis that the disposal was completed on 1 April
2010.
(3) The "After the disposal" basic loss per share and headline loss per share
have been adjusted for the following:
* the exclusion of the results of the Blesboklaagte plant for the year
ended 31 March 2011;
* the after tax profit on the sale of the Blesboklaagte plant amounting
to R7.67 million; and
* interest earned on the R6 million cash proceeds.
(4) The unaudited pro forma financial effects on the NAV and NTAV were prepared
on the basis that the disposal was completed on 31 March 2011.
(5) The "After the disposal" NAV and NTAV per share have been adjusted for the
following:
* cash received of R6 million;
* a current debtor of R9 million has been raised for the outstanding
purchase consideration; and
* goodwill of R2, 27 million has been impaired.
7 CATEGORISATION OF THE TRANSACTION
The transaction is categorised, in terms of the JSE Limited`s Listings
Requirements, as a Category 2 transaction and does not require approval by the
shareholders of Wescoal.
8 FURTHER ANNOUNCEMENT
Shareholders will be notified once the transaction becomes unconditional.
15 August 2011
Johannesburg
Sponsor
Exchange Sponsors
Date: 15/08/2011 09:00:03 Supplied by www.sharenet.co.za
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