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Wescoal Holdings Limited - General Issue Of Shares For Cash And Combined Claw-back And Rights Offer Declaration Announcement

Release Date: 05/11/2015 14:48:00      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?)


GENERAL ISSUE OF SHARES FOR CASH AND COMBINED CLAW-BACK AND RIGHTS OFFER DECLARATION
ANNOUNCEMENT

1.    Introduction

      Wescoal shareholders (?Shareholders?) are advised that Wescoal has issued a total of 9 848 485 shares
      for cash, representing 5.02% of the issued share capital of Wescoal before this issue, in terms of a
      general authority to issue shares for cash as approved by Wescoal shareholders at the annual general
      meeting of the Company held on 21 October 2014 ("the Cash Issue"). Details of the Cash Issue are
      outlined in paragraph 2 below.

      Shareholders are also referred to announcements released on Stock Exchange News Services (?SENS?)
      on 7 October 2015 and 13 October 2015, being the declaration announcement and delay in the release
      of finalisation announcement, respectively (?Announcements?), relating to the proposed capital raising
      by way of a renounceable combined claw-back and rights offer (?Combined claw-back and rights offer?).
      Due to the implementation of the Cash Issue and share price movement since the Announcements, the
      Company, through its board of independent directors has revised the terms of the Combined claw-back
      and rights offer. The Company hereby withdraws the Announcements and issues a new declaration
      announcement outlining the revised terms of the Combined claw-back and rights offer, which terms are
      outlined in paragraph 3 below.

2.    General issue of shares for cash

      2.1      Details of the Cash Issue

      In total, 9 848 485 shares (?the New Wescoal Shares?) were issued at a price of 132 cents per share
      (?the Issue Price?), representing a 5% discount to the 30 day volume weighted average price up to and
      including 21 October 2015, being the date the price of the Cash Issue was agreed between Wescoal
      and the parties subscribing for the shares.

      A total cash amount of R13 million has been raised in terms of the Cash Issue, and the new Wescoal
      shares to be issued in terms of the Cash Issue will rank pari passu with the existing shares in issue.

      The New Wescoal Shares were placed with public shareholders as defined in paragraphs 4.25 and 4.26
      of the JSE Limited Listings Requirements.

      The New Wescoal Shares will be issued and listed on or about Friday, 6 November 2015.

      2.2      Intended use of funds

      The proceeds of the Cash Issue will be used for general working capital purposes including
      improvement projects to optimise the Wescoal Processing Plant (efficiencies and coal handling
      capacity) and to complete the final phase of Elandspruit Colliery.

3.   Combined claw-back and rights offer

     Shareholders are advised that Wescoal intends to raise a maximum of R65 million equity capital by way
     of the Combined claw-back and rights offer through the issue of up to 49 041 904 new ordinary shares
     of no par value to Wescoal shareholders at a subscription price of 132 cents per Combined claw-back
     and rights offer share in the ratio of 23.78944 Combined claw-back and rights offer shares for every 100
     Wescoal ordinary shares held at the close of trade on Friday, 20 November 2015 (?Record Date?).

     3.1     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 the 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.

     3.2     Terms of the Combined claw-back and rights offer

     In terms of the Combined claw-back and rights offer, 49 041 904 new ordinary shares of no par value
     will be offered to Shareholders on the Record Date (?Qualifying Shareholders?) at a price of 132 cents
     per Combined claw-back and rights offer share (?Subscription Price?), representing a maximum
     Combined claw-back and rights offer equity capital raise of R65 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 up to and including Wednesday, 21 October 2015, being the
     date that the independent board of directors approved the revised terms of the Combined claw-back
     and rights offer. The Combined claw-back and rights offer will be offered to Qualifying Shareholders in
     the ratio of 23.78944 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 30 303 030 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 (?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 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, 16 November 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 set out in
     paragraph 3.1.

     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 a 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 ordinary 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 a circular to be issued.

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

     3.3     Directors

     It is the intention of Messrs W Sulaiman and JG Pansegrouw who collectively hold 1% shareholding to
     follow their rights in terms of the Combined claw-back and rights offer. MR Ramaite, the Non-
     Executive Chairman of Wescoal, is a shareholder and Executive Chairman of Simeka. To the extent that
     Simeka is issued with Claw-back shares, MR Ramaite?s indirect beneficial interest in the Company will
     increase. MR Ramaite will not be following his rights in terms of his direct beneficial shareholding in
     the Company.

     The directors' ability to follow their rights is dependent on their ability to raise sufficient funding, and
     to the extent that the directors do not follow their rights, their rights will potentially be renounced or
     lapsed. The directors will not be permitted to apply for additional Combined claw-back and rights offer
     shares.

     3.4     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, 10 November
     Last day to trade in Wescoal shares on the JSE in order to be entitled to               Friday, 13 November
     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, 16 November
     Code WSLN and ISIN ZAE000210399 from the commencement of trade on
     Wescoal shares commence trading ex-Combined claw-back and rights                        Monday, 16 November
     offer entitlement on the JSE from
     Subscription Amount paid to Wescoal by the Subscriber in accordance                     Monday, 16 November
     with the Subscription Agreement on
     Allotment of Claw-back shares to the Subscriber on                                      Monday, 16 November
     Circular, including form of instruction (where applicable), mailed to                  Tuesday, 17 November
     Qualifying Certificated Shareholders on
     Record date in order to be entitled to participate in the Combined claw-                Friday, 20 November
     back and rights offer on
     Combined claw-back and rights offer opens on                                            Monday, 23 November
     Letters of allocation credited to an electronic account held at the                     Monday, 23 November
     transfer secretaries in respect of Qualifying Certificated Shareholders on
     CSDP or broker accounts credited with entitlements in respect of                        Monday, 23 November
     Qualifying Dematerialised Shareholders on
     Combined claw-back and rights offer circular mailed to Qualifying                      Tuesday, 24 November
     Dematerialised Shareholders (where applicable) on
     Last day to trade in the letters of allocation on the JSE on                            Friday, 27 November
     Listing and trading on the JSE of the Combined claw-back and rights                     Monday, 30 November
     offer shares commences at 09h00 on
     Payment to be made, and form of instruction to be lodged, with the                       Friday, 4 December
     transfer secretaries by Qualifying Certificated Shareholders by 12h00 on
     Combined claw-back and rights offer closes at 12h00 on                                   Friday, 4 December
     Record date for the letters of allocation on                                             Friday, 4 December
     Combined claw-back and rights offer shares issued on                                     Monday, 7 December
     Claw-back shares not accepted in terms of the Combined claw-back and                     Monday, 7 November
     rights offer, issued to the Subscriber on
     CSDP or broker accounts of Qualifying Dematerialised Shareholders                        Monday, 7 December
     debited and updated with entitlements to the Combined claw-back and
     rights offer shares on
     Share certificates posted to Qualifying Certificated Shareholders in                     Monday, 7 December
     respect of entitlements to the Combined claw-back and rights offer on
     Results of the Combined claw-back and rights offer announcement                          Monday, 7 December
     released on SENS on
     Refund to the Subscriber in terms of Claw-back shares taken up by                       Tuesday, 8 December
     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, 16 November
        2015 and Friday, 20 November 2015, both days inclusive.
     4. The CSDP or broker accounts of Qualifying Dematerialised Shareholders will be automatically
        credited with new Wescoal ordinary 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.
      

      3.5       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.

      3.6       Further notices

      Shareholders are hereby advised 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 now be released
      on SENS on or about Tuesday, 10 November 2015 and in the South African press on or about
      Wednesday, 11 November 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, 17 November 2015. The Circular
      will be posted to Qualifying Dematerialised Shareholders on or about Tuesday, 24 November 2015.

4.    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 of 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 ordinary shares on behalf of persons who are resident outside of 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
5 November 2015


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


Legal advisor
Mkhabela Huntley Adekeye Incorporated

Date: 05/11/2015 02:48:00 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,
 information disseminated through SENS.


                                        
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