WESCOAL HOLDINGS LIMITED - Acquisition of the Muhanga plant and cautionary announcementRelease Date: 24/06/2014 08:00:00 Code(s): WSL
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")
ACQUISITION OF THE MUHANGA PLANT AND CAUTIONARY ANNOUNCEMENT
Shareholders are advised that Wescoal Mining Proprietary Limited (?Wescoal Mining?), a
wholly owned subsidiary of Wescoal, has entered into a Sale of Asset Agreement dated 23
June 2014 (?signature date?), to purchase from Muhanga Mines Proprietary Limited
(?Muhanga? or ?the Seller?) certain assets, including the coal processing plant, and certain
liabilities (?Muhanga Plant?), subject to certain suspensive conditions (?the acquisition?).
2. RATIONALE FOR THE ACQUISITION
The development of the Elandspruit mineral asset to a fully fledged multi product mine has been
prioritised by the Wescoal board and the commencment of the establishment of the colliery is
currently programmed for the last quarter of 2014. The current and expected regulatory
approvals for the project do not allow for the commissioning of a washing plant at Elandspruit
and revised applications are required to amend this, which process could take in the region of 24
to 36 months.
The acquisition of Muhanga Plant gives Wescoal immediate access to a fully fledged
beneficiation asset that is currently operational, has all the necessary regulatory approvals and
extensive infrastructure to allow for a multi-product operation whilst regulatory approvals are
awaited for the Elandspruit site.
3. DESCRIPTION OF MUHANGA PLANT
The Muhanga Plant comprises inter alia Portion 6 of the farm Goedenhoop 315 JS (?the Plant
Area?), the Access Servitude, the coal washing plant situated thereon and the National
Environmental Management Act (?NEMA?) authorisation and those provisions of the
Muhanga Water Use License (?WUL?) as defined in the Sale of Asset Agreement and the
assumed liabilities being inter alia the environmental liabilities and rehabilitation obligation as
defined in the Sale of Asset Agreement (collectively ?the Sale Assets?) .
4. TERMS AND CONDITIONS OF THE ACQUISITION
4.1 On 23 June 2014, Wescoal Mining entered into an agreement to purchase the Muhanga
Plant from Muhanga with effect from 1 November 2014 (?effective date?).
4.2 The total purchase price is R 42,5 million (excluding VAT) , payable as follows:
4.2.1 a deposit of R 2,5 million payable on the first business day after condition 4.3.1 below
has been met;
4.2.2 an amount of R 18,5 million, subject to a set off of the Increased Rehabilitation
Obligation Quantum of R5 182 516; and
4.2.3 the balance of R 21,5 million plus interest calculated at prime interest rate, payable in
12 equal tranches commencing on the first business day of the third month after the
4.3 The acquisition is conditional upon inter alia:
4.3.1 the approval of the acquisition by the Seller?s shareholders within 20 business days
from signature date;
4.3.2 by no later than 31 October 2014:
184.108.40.206 the NEMA Authorisation has been submitted to the Department of Environmental
220.127.116.11 certain provisions of the WUL which apply to the Sale Assets have been submitted to
the Department of Water Affairs;
18.104.22.168 written confirmation to cede and transfer the Access Servitude from the Seller to
22.214.171.124 a lease agreement between the Seller and Wescoal Mining is concluded over the
Plant Area; and
126.96.36.199 all the necessary regulatory approvals, to the extent required, including JSE Limited
(?JSE?) and Competition Commission approvals for the acquisition have been
5 UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The unaudited pro forma financial effects will be published in due course.
6 CATEGORISATION OF THE ACQUISITION
The acquisition is categorised, in terms of the JSE?s Listings Requirements, as a
Category 2 transaction and does not requires shareholders? approval.
7 CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution in dealing in the company?s securities on
the JSE until such time as the financial effects of the acquisition are published.
8 FURTHER ANNOUNCEMENT
Shareholders will be kept up to date on progresswith the acquisition.
Sponsor Legal advisor to Wescoal
Exchange Sponsors KWA Attorneys
24 June 2014
Date: 24/06/2014 08:00:00 Supplied by www.sharenet.co.za
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