Go Back Email this Link to a friend


Wescoal Holdings Limited - Updated Financial Effects Of The Minoscape Acquisitions And Specific Repurchase

Release Date: 07/07/2014 11:43:00      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?)


UPDATED FINANCIAL EFFECTS OF THE MINOSCAPE ACQUISITIONS AND SPECIFIC REPURCHASE


1)       Introduction

Shareholders are referred to the SENS announcements dated 9 May 2014, 6 March 2014 and 28 November
2013 and the circular posted to shareholder son 9 June 2014 regarding the Minoscape acquisitions.
Shareholders were advised in the SENS announcement dated 9 May 2014 that revised pro forma financial
effects based on the results for the year ended 31 March 2014 would be released.

Capitalised terms used and not otherwise herein defined, shall have the meanings ascribed thereto in the
Previous Announcements.

2)       Revised financial effects

The pro forma financial effects of the Second Minoscape acquisition and specific repurchase on Wescoal
shareholders set out below are based on the reviewed results of Wescoal for the year ended 31 March 2014.
The pro forma financial effects are the responsibility of the board of directors of Wescoal and have been
prepared for illustrative purposes only and because of their pro forma nature may not fairly present Wescoal?s
financial position or results of operations after the Second Minoscape acquisition and specific repurchase. The
directors of Wescoal are responsible for the preparation of the pro forma financial effects.

                                                                     Wescoal
                                                                    pro forma
                                                          ?after? the Second
                                          Wescoal                  Minoscape
                                ?before? reviewed            acquisition and
                                 results 31 March        specific repurchase
                                              2014             31 March 2014     % change
     Earnings per share
     (cents)                                    41.0                  49.2        20.00
     Diluted earnings per
     share (cents)                                40.2                  48.2        19.90
     Headline earnings per
     share (cents)                                15.7                  14.4        (8.28)
     Diluted headline
     earnings per share                           15.4                  14.1        (8.44)
     Net asset value per
     share (cents)                           147.87                    146.0        (1.26)
     Tangible net asset value
     per share (cents)                           87.41                 78.77        (9.88)
     Weighted average
     number of shares in
     issue (?000)                           170 067                  172 396
     Diluted Weighted
     average number of
     shares in issue (?000)                 173 484                  175 813
     Total shares in issue
     (?000)                                 184 771                  180 485

Notes:

1)   The ?Wescoal Before? column has been extracted without adjustment from the published reviewed results of
     Wescoal Holdings Limited for the year ended 31 March 2014.
2)   For Earnings per share and Headline earnings per share calculations, it is assumed that the Second
     Minoscape acquisition and specific repurchase took place on 1 April 2013.
3)   For Net asset value per share and Tangible net asset value per share calculations, it is assumed that the
     Second Minoscape acquisition and specific repurchase took place on 31 March 2014.

4)   The ?Pro forma after the Second Minoscape Acquisition and Specific repurchase? column accounts for the
     acquisition of the remaining 70% interest in Proudafrique, resulting in it becoming a wholly owned
     subsidiary.

     Prior to the acquisition by Wescoal, Proudafrique acquired 14 285 714 Wescoal shares in lieu of a R10 000
     000 dividend that was due to Proudafrique by Wescoal Exploration. As a consequence of acquiring
     Proudafrique, Wescoal effectively and specifically repurchases the Wescoal shares that are owned by
     Proudafrique.

     Proudafrique owns a non-controlling interest of 40% in Wescoal Exploration. Wescoal Exploration already
     owns the various mining prospects that are being exploited by it and as such these mining and prospecting
     rights are already accounted for in Wescoal Exploration, which is controlled and consolidated by Wescoal.
     The acquisition by Wescoal of Proudafique therefore does not result in any additional mining or prospecting
     rights being owned or controlled by Wescoal, however the non-controlling interest is being bought out.

     Proudafrique is entitled to a royalty of R5.00 per ton of any future saleable coal that is mined at the
     Elandspruit mining area. In addition, Proudafrique is also entitled to royalties on any future coal operations
     that are established at the Silverbank or Verblyden prospects that are owned by Wescoal Exploration. As a
     consequence of acquiring Proudafrique, Wescoal not only eliminates the obligation to pay any future
     royalties on the Silverbank and Verblyden prospects, but also effectively pre-pays R1.50 per ton of the
     royalty payable on saleable coal to be mined at the Elandspruit mining area.

     In summary and in substance, the First and Second Minoscape Acquisitions effectively result in the
     following:
     - Wescoal having repurchased the 14 285 714 Wescoal shares that has been issued to Proudafrique ;
     - Wescoal having settled the dividend that was due to Proudafrique; and
     - Wescoal having pre-paid R1.50 per ton of the royalty that was due to Proudafrique before the First and
          Second Minoscape Acquisitions.

     The Second Minoscape Acquisition is not classified as a business combination and therefore no goodwill
     arises on this transaction.

     The amounts in this column have been adjusted for the following:
     (a) reversal of the investment in associate, that was raised to give effect to the First Minoscape Acquisition,
          as Proudafrique will now be a wholly owned subsidiary;
     (b) reversal of non-controlling interest that existed before the Second Minoscape Acquisitions;
     (c) the purchase price of the Second Minoscape Acquisition comprises cash of R5 600 000 and the issue of
          10 000 000 Wescoal shares;
     (d) it is assumed that the cash consideration is funded from an increase in loan facilities at an interest rate of
          Prime +1%;
     (e) for accounting purposes, the assumed share price for the issue of Wescoal shares is 200 cents per
          share, being the share price at the last practical date before the issue of this announcement;
     (f) reversal of the 14 285 714 Wescoal shares effectively re-purchased at the same share price as noted
          above;
     (g) transaction costs amounting to R1 293 000 are accounted for as an increase in accounts payable and a
          reduction in retained earnings;
     (h) account for a Prepaid royalty amounting to R9 654 000, representing the R1.50 per ton of saleable coal
          mined at Elandspruit that has effectively been prepaid in terms of the Minoscape Acquisitions; and
     (i) It is noted that the additional purchase commitment of R3.50 per ton of saleable coal mined at
          Elandspruit will be paid and expensed as and when the related coal is mined.

5)   All the above adjustments, with the exception of transaction costs, are expected to have a continuing effect.



Corporate adviser & Sponsor to Wescoal                              Legal Adviser to Wescoal
Exchange Sponsors                                                   KWA Attorneys

7 July 2014
Johannesburg

Date: 07/07/2014 11:43:00 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             . The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.


                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.