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Wescoal Holdings Limited - Capital Raising By Way Of A Renounceable Combined Claw-back And Rights Offer

Release Date: 07/10/2015 12:49:00      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?)


CAPITAL RAISING BY WAY OF A RENOUNCEABLE COMBINED CLAW-BACK AND RIGHTS OFFER

1.    Introduction

      Wescoal shareholders (?Shareholders?) are advised that Wescoal intends to raise a maximum of
      R81 million equity capital by way of a renounceable combined claw-back and rights offer through the
      issue of up to 58 890 389 new ordinary shares of no par value to Wescoal shareholders at a subscription
      price of 138 cents per combined claw-back and rights offer share in the ratio of 29.99999 combined
      claw-back and rights offer shares for every 100 Wescoal shares held at the close of trade on Friday, 23
      October 2015 (?Record Date?) (?Combined claw-back and rights offer?).

2.    Rationale for the Combined claw-back and rights offer

      The Combined claw-back and rights offer to Shareholders has been initiated to raise capital for the
      further development of Wescoal?s flagship project, Elandspruit Colliery (refer to the SENS
      announcements dated 9 July 2015, 29 July 2015, 10 September 2015 and 16 September 2015,
      respectively) and to take advantage of inorganic and organic growth options. The Company commenced
      processing coal at its beneficiation plant close to Elandspruit and delivered ?first coal? to customers
      during the month of July 2015.
      To date, the Company has funded growth projects for the group from operating cash flows, and as a
      consequence has recently experienced some strain on its free cash flow position which inhibits further
      growth potential. The decision to pursue a Combined claw-back and rights offer has further been
      brought about by delays in the release of long-term bank funding which depends on long-term contracts
      with Eskom being concluded.

3.    Terms of the Combined claw-back and rights offer

      In terms of the Combined claw-back and rights offer, 58 890 389 new ordinary shares of no par value
      will be offered to Shareholders on the Record Date (?Qualifying Shareholders?) at a price of 138 cents
      per Combined claw-back and rights offer share (?Subscription Price?), representing a maximum
      Combined claw-back and rights offer equity capital raise of R81 million.
      The Subscription Price represents a discount of 5% to the 30-day volume weighted average price of
      Wescoal shares over the 30-day period ended on Tuesday, 29 September 2015. The Combined claw-
      back and rights offer will be offered to Qualifying Shareholders in the ratio of 29.99999 Combined claw-
      back and rights offer shares for every 100 Wescoal ordinary shares held on the Record Date.
      Simeka Capital Holdings Proprietary Limited (?Simeka? or the ?Subscriber?) has committed to fully
      subscribe for a maximum of 28 985 507 new ordinary shares of no par value which shall not have been
      subscribed for by Qualifying Shareholders pursuant to the Combined claw-back and rights offer (?Claw-
      back shares?) for a subscription consideration of R40 million (?Subscription Amount?) at the
      Subscription Price in accordance with the subscription agreement entered into between the Subscriber
      and the Company on 30 September 2015 (?Subscription Agreement?).
      To the extent that Qualifying Shareholders do not follow their rights in terms of the Combined claw-
      back and rights offer, the Subscriber will be issued with the Claw-back shares. To the extent that all
      Qualifying Shareholders follow their rights in terms of the Combined claw-back and rights offer, the
      Subscriber will not be issued with any Claw-back shares and will be refunded the Subscription Amount.
     In terms of the Subscription Agreement, the Subscription Amount is payable to the Company in advance
     on Monday, 19 October 2015 and Wescoal shall allot the Claw-back shares to the Subscriber on this
     date, upon receipt of the Subscription Amount. The Subscriber has agreed to allow Wescoal, upon
     receipt of the Subscription Amount, immediate access to such funds for the purposes of further
     developing Elandspruit project and to take advantage of the inorganic and organic growth options.
     In consideration for the Subscriber providing the Subscription Amount to Wescoal in advance, prior to
     the opening of the Combined claw-back and rights offer, Wescoal shall pay to the Subscriber a liquidity
     fee equal to 2.5% (two and half percent) of the Subscription Amount.
     The Combined claw-back and rights offer shares will, upon allotment and issue, rank pari passu with the
     existing issued Wescoal shares in terms of both voting and distribution rights.

     The entitlement of each Qualifying Shareholder holding certificated shares (?Qualifying Certificated
     Shareholder?) will be reflected in the appropriate block in the form of instruction, to be enclosed in the
     circular to be issued.

     Qualifying Shareholders holding dematerialised shares (?Qualifying Dematerialised Shareholders) will
     not receive a printed form of instruction. Their central securities depository participant (?CSDP?) or
     broker accounts will automatically be credited with their entitlements.

     Fractional entitlements to shares resulting from the Combined claw-back and rights offer will be
     rounded down to the nearest whole number if they are less than 0.5, and will be rounded up to the
     nearest whole number if they are equal to or greater than 0.5.

     Qualifying Shareholders not holding a multiple of 100 shares will receive entitlements in accordance
     with a table of entitlements contained in the circular to be issued.

     Applications for additional Combined claw-back and rights offer shares will not be permitted.

4.   Directors

     The implementation of the Combined claw-back and rights offer is occurring during a closed period as
     defined in the JSE Listings Requirements due to the Company?s interim financial period which ended on
     30 September 2015. Some of the directors have indicated that they would like to follow their rights
     during the closed period subject to the approval of a dispensation request submitted to the JSE.

5.   Salient dates and times

     The salient dates and times in respect of the Combined claw-back and rights offer are set out below:

                                                                                                         2015
     Finalisation announcement released on SENS on                                        Tuesday, 13 October
     Last day to trade in Wescoal shares on the JSE in order to be entitled to
                                                                                            Friday, 16 October
     participate in the Combined claw-back and rights offer on
     Listing and trading on the JSE of the letters of allocation with the JSE             Monday, 19 October
     Code WSLN and ISIN ZAE000210399 from the commencement of trade
     on
     Wescoal shares commence trading ex-Combined claw-back and rights                     Monday, 19 October
     offer entitlement on the JSE from
     Subscription Amount paid to Wescoal by the Subscriber in accordance                  Monday, 19 October
     with the Subscription Agreement on
     Allotment of Claw-back shares to the Subscriber on                                   Monday, 19 October
     Circular, including form of instruction (where applicable), mailed to                Tuesday, 20 October
     Qualifying Certificated Shareholders on
     Record date in order to be entitled to participate in the Combined claw-            Friday, 23 October
     back and rights offer on
     Combined claw-back and rights offer opens on                                      Monday, 26 October
     Letters of allocation credited to an electronic account held at the               Monday, 26 October 
     transfer secretaries in respect of Qualifying Certificated Shareholders on
     CSDP or broker accounts credited with entitlements in respect of                  Monday, 26 October
     Qualifying Dematerialised Shareholders on
     Combined claw-back and rights offer circular mailed to Qualifying                 Tuesday, 27 October
     Dematerialised Shareholders (where applicable) on
     Last day to trade in the letters of allocation on the JSE on                        Friday, 30 October
     Listing and trading on the JSE of the Combined claw-back and rights                Monday, 2 November
     offer shares commences at 09h00 on
     Payment to be made, and form of instruction to be lodged, with the                 Friday, 6 November
     transfer secretaries by Qualifying Certificated Shareholders by 12h00 on
     Combined claw-back and rights offer closes at 12h00 on                             Friday, 6 November
     Record date for the letters of allocation on                                       Friday, 6 November
     Combined claw-back and rights offer shares issued on                             Monday, 9 November
     Claw-back shares not accepted in terms of the Combined claw-back and             Monday, 9 November
     rights offer, issued to the Subscriber on
     CSDP or broker accounts of Qualifying Dematerialised Shareholders                Monday, 9 November
     debited and updated with entitlements to the Combined claw-back and
     rights offer shares on
     Share certificates posted to Qualifying Certificated Shareholders in             Monday, 9 November
     respect of entitlements to the Combined claw-back and rights offer on
     Results of the Combined claw-back and rights offer announcement                  Monday, 9 November
     released on SENS on
     Refund to the Subscriber in terms of Claw-back shares taken up by               Tuesday, 10 November
     Qualifying Shareholders on

     Notes:
     1. All times indicated above are South African times.
     2. Qualifying Dematerialised Shareholders are required to notify their appointed CSDP or broker of
        their acceptance or otherwise of the Combined claw-back and rights offer in the manner and time
        stipulated in the agreement governing the relationship between such shareholder and their CSDP or
        broker.
     3. Share certificates may not be dematerialised or re-materialised between Monday, 19 October 2015
        and Friday, 23 October 2015, both days inclusive.
     4. The CSDP or broker accounts of Qualifying Dematerialised Shareholders will be automatically
        credited with new Wescoal shares to the extent to which they have accepted the Combined claw-
        back and rights offer. Wescoal share certificates will be posted, by registered post at the
        shareholders? risk, to Qualifying Certificated Shareholders in respect of the Combined claw-back and
        rights offer shares which have been accepted.
     5. CSDPs effect payment in respect of Qualifying Dematerialised Shareholders on a delivery-versus-
        payment method.

6.   Conditions precedent

     The Combined claw-back and rights offer remains conditional upon, inter alia, approval by the JSE of:
     ? the Combined claw-back and rights offer circular and ancillary documents thereto (?the Circular?);
       and
     ? the listing of the Combined claw-back and rights offer shares.

7.   Further notices

     It is anticipated that the finalisation announcement for the Combined claw-back and rights offer,
     including the final terms of the Combined claw-back and rights offer, will be released on SENS on or
     about Tuesday, 13 October 2015 and in the South African press on or about Wednesday, 14 October
     2015.
     The Circular and a form of instruction in respect of a letter of allocation, where applicable, will be
     posted to Qualifying Certificated Shareholders on or about Tuesday, 20 October 2015. The Circular will
     be posted to Qualifying Dematerialised Shareholders on or about Tuesday, 27 October 2015.

8.   Jurisdiction

     The Combined claw-back and rights offer does not constitute an offer in any jurisdiction in which it is
     illegal to make such an offer.
     The Combined claw-back and rights offer shares have not been, and will not be, registered under the
     Securities Act of the United States. Accordingly, the Combined claw-back and rights offer shares may
     not be offered, sold, resold, delivered or transferred, directly or indirectly, in or into the United States
     or to, or for the account or benefit of, United States persons, except pursuant to exemptions from the
     Securities Act of the United States.
     The Combined claw-back and rights offer does not constitute an offer in the District of Columbia, the
     United States, the Dominion of Canada, the Commonwealth of Australia, Japan or in any other
     jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer.
     Shareholders resident outside the Common Monetary Area should consult their professional advisors to
     determine whether any governmental or other consents are required or other formalities need to be
     observed to allow them to take up the Combined claw-back and rights offer, or trade their entitlement.
     Shareholders holding Wescoal shares on behalf of persons who are resident outside the Common
     Monetary Area are responsible for ensuring that taking up the Combined claw-back and rights offer, or
     trading in their entitlements under that offer, do not breach regulations in the relevant overseas
     jurisdictions.

Johannesburg
7 October 2015

Investment bank, corporate advisor and sponsor
Nedbank Corporate and Investment Banking

Legal advisor
Mkhabela Huntley Adekeye Incorporated

Date: 07/10/2015 12:49:00 Supplied by www.sharenet.co.za                     
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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,
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