Go Back Email this Link to a friend


Exxaro Resources Limited - Exx - Unwind Of Exxaros Existing Bee Transaction, Terms Of Replacement Bee Transaction And Cautionary Announcement

Release Date: 22/11/2016 17:00:00      Code(s): EXX     
Exxaro Resources Limited
(Incorporated in the Republic of South Africa)
Registration number: 2000/011076/06
JSE share code: EXX
ISIN: ZAE000084992
ADR code: EXXAY
(?Exxaro? or the ?Company? or the ?Group?)

UNWIND OF EXXARO?S EXISTING BEE TRANSACTION, TERMS OF REPLACEMENT BEE TRANSACTION
AND CAUTIONARY ANNOUNCEMENT

1. BACKGROUND AND INTRODUCTION

   1.1.   Exxaro was established in November 2006 through the combination of the assets of Kumba Resources
          Limited (?Kumba Resources?) with Eyesizwe Mining Proprietary Limited (?Eyesizwe Mining?) and the
          subsequent unbundling of Kumba Iron Ore Limited and the relisting of Kumba Resources and Eyesizwe
          Mining assets as Exxaro.
   1.2.   As part of the establishment of Exxaro, Main Street 333 Proprietary Limited (?MS333?) was created and
          introduced as the controlling black economic empowerment (?BEE?) shareholder of Exxaro (the ?Existing
          BEE Transaction?). MS333 currently owns 50.19% of the issued ordinary shares of Exxaro (the ?Exxaro
          Shares?).
   1.3.   In terms of the Existing BEE Transaction, certain restrictions were placed on MS333?s ability to dispose of
          its shareholding in Exxaro (the ?BEE Restrictions?) up until 28 November 2016 (the ?Final Date?), including
          that:
          1.3.1. MS333 was obliged to own more than 50% of the Exxaro Shares; and
          1.3.2. direct and indirect shareholders of MS333 undertook to retain their status as historically
                 disadvantaged South Africans, as defined in the Mineral and Petroleum Resources Development
                 Act, 28 of 2002 (?HDSA?).
   1.4.   The Existing BEE Transaction was implemented as a ten year structure and the BEE Restrictions expire
          on the Final Date. After the Final Date, and in terms of the Existing BEE Transaction, MS333 must
          distribute its shareholding in Exxaro to its shareholders in exchange for each such shareholder?s shares in-
          and claims against MS333 (the ?MS333 Unwind?). The MS333 Unwind must be procured by the
          shareholders of MS333 as soon as possible after the Final Date. It has been agreed in an implementation
          agreement (the ?Implementation Agreement?) that the MS333 Unwind will be procured as described in
          paragraph 3.1.
   1.5.   On Tuesday, 22 November 2016, the following agreements were entered into in order to coordinate the
          MS333 Unwind:
          1.5.1. the Implementation Agreement between Exxaro, MS333 and the direct shareholders of MS333
                 (the ?MS333 Shareholders?), setting out:
                 1.5.1.1. the indicative terms and principles of a replacement BEE transaction (the ?Replacement
                          BEE Transaction?);
                 1.5.1.2. the regulation and coordination of the MS333 Unwind, specifically governing the terms of
                          any placement of Exxaro Shares in the market as the result of the MS333 Unwind; and
                 1.5.1.3. the in-principle terms for the Specific Repurchase (as defined below);
          1.5.2. a share repurchase implementation agreement (the ?Repurchase Implementation Agreement?)
                 between Exxaro and MS333, setting out the terms on which Exxaro will propose a scheme of
                 arrangement to its shareholders in terms of section 114 of the Companies Act, 71 of 2008 (the
                 ?Companies Act?) between Exxaro and MS333 in terms of which Exxaro will repurchase and
                 cancel a certain number of Exxaro Shares to the value of R3 524 433 434 from MS333 (the
                 ?Specific Repurchase?).
   1.6.   The Implementation Agreement contains the salient terms of the Replacement BEE Transaction and the
          MS333 Unwind, however both the Replacement BEE Transaction and the MS333 Unwind is subject to the
          conclusion of detailed transaction agreements. In terms of the Implementation Agreement, the MS333
          Unwind will be implemented by no later than three months from the earlier of: i) agreement of the detailed
          transaction agreements; or ii) 30 April 2017, or such other date as agreed to in writing between Exxaro and
          MS333. The detailed terms of the Replacement BEE Transaction will be announced once the transaction
          agreements have been finalised and agreed (the ?Replacement BEE Transaction Announcement Date?).
  1.7.    The Exxaro board of directors (the ?Exxaro Board?) established an independent board sub-committee (the
          ?Independent Board Sub-Committee?) to actively engage with MS333 on the MS333 Unwind, the terms of
          the Replacement BEE Transaction and the Specific Repurchase.

2. OVERVIEW OF THE TERMS OF THE REPLACEMENT BEE TRANSACTION

  2.1.    Introduction
          Exxaro, MS333 and the MS333 Shareholders have agreed high level terms governing the Replacement
          BEE Transaction in the Implementation Agreement. It is the intention to implement the Replacement BEE
          Transaction after the Specific Repurchase, partially using the mechanism of the MS333 Unwind to enable
          direct and indirect shareholders of MS333 to reinvest into the Replacement BEE Transaction structure.
          While high level terms have been agreed with MS333, detailed transaction agreements required to
          implement the Replacement BEE Transaction are still to be negotiated and finalised.
  
  2.2.    Rationale for the Replacement BEE Transaction
          Since inception, Exxaro has grown into one of the largest black controlled companies in the South African
          mining sector. Exxaro is aware of the current uncertainty around the legislative requirements for BEE in the
          South African mining sector and specifically the uncertainty created by the current court process to
          determine the legal status of the ?once empowered, always empowered? principle. However, the
          Independent Board Sub-Committee is of the opinion that Exxaro?s empowerment status is a significant part
          of its strategy and provides a competitive advantage. Remaining empowered is an essential part of
          Exxaro?s strategy to not only maintain sustainable relationships with critical stakeholders and ensure
          ongoing compliance with specific customer requirements, but also to further the imperative for
          transformation in South Africa. Accordingly, Exxaro wishes to pursue and implement the Replacement
          BEE Transaction.
          Exxaro considers BEE holistically. In addition to other empowerment commitments in terms of the Mining
          Charter, broad-based BEE includes duly empowering each of the following groupings:
          -   HDSA strategic investors (such as the broad-based groupings within the Existing BEE Transaction and
              the proposed Replacement BEE Transaction);
          -   Exxaro employees, who are HDSAs (such as through the Mpower and Mpower 2012 employee share
              ownership schemes); and
          -   communities in the regions where Exxaro operates.
          Exxaro?s Mpower and Mpower 2012 employee share ownership schemes provides for all of the employees
          of Exxaro, other than those employees that already participate in management share incentive schemes,
          with equity participation in Exxaro. The Mpower scheme was wound up in 2011 and resulted in a pay-out
          of over R1 billion to its participants, whereas Mpower 2012 was put in place in 2012 and resulted in each
          participant being allocated Exxaro Shares to the value of R70 000. The majority of Mpower 2012
          participants are HDSAs thereby further contributing to Exxaro?s empowerment status.
          In addition to the Replacement BEE Transaction, Exxaro continues to consider the empowerment
          requirements of all relevant regulations.

  2.3.   Key terms of the Replacement BEE Transaction

     2.3.1. Transaction structure and participants

             Shareholders are referred to the press version of this announcement for a diagram of the shareholding
             structure of the Replacement BEE Transaction after its implementation.
             A new special purpose vehicle (?NewBEECo?) will be incorporated for the purpose of being the new
             empowerment vehicle for Exxaro. It is the intention that NewBEECo will ultimately own 30% (the
             ?Targeted BEE Percentage?) of the Exxaro Shares.
             All of the existing direct and indirect shareholders of MS333 (excluding the Industrial Development
             Corporation (the ?IDC?) (the ?Reinvesting MS333 Shareholders?) will be invited to participate in the
            Replacement BEE Transaction by reinvesting all or some of the Exxaro Shares received as part of the
            MS333 Unwind (the ?MS333 Reinvestment?).
            The IDC, which currently owns approximately 15% of the ordinary shares of MS333, has separately
            agreed to reinvest in the Replacement BEE Transaction by investing some of the Exxaro Shares
            received as part of the MS333 Unwind (the ?IDC Reinvestment?).
            NewBEECo will have two shareholders, being a newly formed special purpose vehicle to house the
            MS333 Reinvestment (?BEE SPV?) and the IDC. BEE SPV will own 75.8% and the IDC will own 24.2%
            of NewBEECo.
            Exxaro will invest equity into BEE SPV (the ?Exxaro Equity Investment?) in order to provide funding so
            that Reinvesting MS333 Shareholders have outright control of NewBEECo, and the Targeted BEE
            Percentage is achieved.
            The BEE SPV shareholders will be Reinvesting MS333 Shareholders and Exxaro, with Reinvesting
            MS333 Shareholders owning 62.3% and Exxaro owning 37.7% of BEE SPV.
            In addition to the equity funding introduced into the Replacement BEE Transaction through the MS333
            Reinvestment, the IDC Reinvestment and the Exxaro Equity Investment, Exxaro will provide facilitation,
            in a form still to be agreed, to the Replacement BEE Transaction (the ?Exxaro Facilitation?).
            The balance of funds required by NewBEECo to invest into Exxaro pursuant to the Replacement BEE
            Transaction will be raised through third party bank funding. The IDC has also agreed to provide a debt
            guarantee in favour of the third party funders up to a maximum value of the present value of
            R700 000 000 (the ?IDC Guarantee?) over the term of the Replacement BEE Transaction.

     2.3.2. Detailed terms of the Funding of the Replacement BEE Transaction

            The detailed terms of the Replacement BEE Transaction will be communicated to the market on the
            Replacement BEE Transaction Announcement Date. The Replacement BEE Transaction value will
            only be determined on the implementation of the Replacement BEE Transaction, which is expected to
            be towards the end of H1 2017, and will be calculated as the Targeted BEE Percentage multiplied by
            the market valuation of Exxaro at the date of implementation of the Replacement BEE Transaction
            (?Replacement BEE Transaction Value?).
            The Replacement BEE Transaction Value will be funded as follows:

            Funding Source:                              % of Replacement BEE
                                                         Transaction Value
            Exxaro Facilitation (1)                      22.6%
            Existing MS333 shareholders:                 27.2%
            - MS333 Reinvestment (2)                     15.8%
            - IDC Reinvestment (3)                       11.4%

            New cash funding:                            50.2%
            - Exxaro Equity Investment (4)               19.9%
            - New third party bank funding (5)           30.3%

            Total Funding                                100.0%

            Notes:

            1.   The Exxaro Facilitation will be limited to the lesser of 22.6% of the Replacement BEE Transaction and 6.8% of the Exxaro
                 market value after implementation of the Replacement BEE Transaction.
            2.   Should the MS333 Reinvestment be less than 15.8% of the Replacement BEE Transaction Value, Exxaro will have the
                 option not to implement the Replacement BEE Transaction. Should the MS333 Reinvestment be more than 15.8% of the
                 Replacement BEE Transaction Value then the new third party bank funding will be reduced accordingly to maintain the
                 Replacement BEE Transaction Value.
            3.   The IDC Reinvestment will be limited to a maximum value of 70% of the IDC?s current unencumbered investment into
                 MS333. Should the IDC Reinvestment be more than 11.4% of the Replacement BEE Transaction Value, the new third party
                 bank funding will be reduced accordingly to maintain the Replacement BEE Transaction Value.
            4.   Exxaro will subscribe for shares in BEE SPV through the Exxaro Equity Investment, which subscription proceeds will be
                 used to subscribe for shares in NewBEECo and ultimately Exxaro Shares.
            5.   The IDC has indicated its willingness to provide a partial debt guarantee in favour of the new third party funders,
                 guaranteeing the obligations of NewBEECo, with a maximum value of the present value of R700 000 000 over the term of
                 the Replacement BEE Transaction.

     2.3.3. Detailed transaction mechanics

            2.3.3.1.     Exxaro will subscribe for ordinary shares in BEE SPV pursuant to the Exxaro Equity
                         Investment. This subscription will result in Exxaro holding 37.7% of the issued ordinary
                         shares in BEE SPV.
            2.3.3.2.     The Reinvesting MS333 Shareholders will subscribe for ordinary shares in BEE SPV. This
                         subscription will result in the Reinvesting MS333 Shareholders collectively holding 62.3% of
                         the issued ordinary shares of BEE SPV.
            2.3.3.3.     BEE SPV will use the proceeds of the subscriptions referred to in paragraphs 2.3.3.1 and
                         2.3.3.2 above to subscribe for ordinary shares in NewBEECo. This subscription will result in
                         BEE SPV holding 75.8% of the issued ordinary shares of NewBEECo (after the
                         implementation of the IDC Reinvestment contemplated in paragraph 2.3.3.4 below).
            2.3.3.4.     The IDC will subscribe for ordinary shares in NewBEECo. This subscription will result in the
                         IDC holding 24.2% of the issued ordinary shares of NewBEECo.
            2.3.3.5.     NewBEECo will subscribe for Exxaro Shares which will result in NewBEECo holding the
                         Targeted BEE Percentage of the Exxaro Shares.
            2.3.3.6.     All the shareholding percentages are fixed in order for the Exxaro Facilitation to benefit
                         Reinvesting MS333 Shareholders and the IDC.

     2.3.4. Term and liquidity mechanisms

            The term of the Replacement BEE Transaction will be seven years. During this term restrictions will be
            placed on the NewBEECo shareholders? ability to dispose of their shares in the Replacement BEE
            Transaction structure. It is envisaged that there will be certain mechanisms to create interim liquidity for
            NewBEECo shareholders. These mechanisms will be structured so as not to alter Exxaro?s
            empowerment status in any way.

     2.3.5. Governance of the Replacement BEE Transaction

            MS333 will be able to nominate representatives of NewBEECo (the ?NewBEECo Representatives?) to
            represent the Reinvesting MS333 Shareholders, BEE SPV and NewBEECo in negotiating the final
            terms of the Replacement BEE Transaction. The detailed terms of the Replacement BEE Transaction
            will be negotiated between the Independent Board Sub-Committee and the NewBEECo
            Representatives. NewBEECo may remove and replace any NewBEECo Representatives after its
            incorporation. Exxaro and the IDC will be able to rely on the engagements with the NewBEECo
            Representatives in relation to the abovementioned negotiations.
            Exxaro will be represented by the Independent Board Sub-Committee, which will report to the Exxaro
            Board.

     2.3.6. Conditions for the Replacement BEE Transaction to be implemented

            The implementation of the Replacement BEE Transaction will be subject to the following conditions
            precedent:
            -  the Replacement BEE Transaction resulting in NewBEECo owning the Targeted BEE Percentage
               of Exxaro Shares;
            -  the Independent Board Sub-Committee being satisfied that the shareholder composition of the
               Replacement BEE Transaction is sufficiently broad-based;
            -  the detailed transaction agreements being duly executed by the parties thereto and becoming
               unconditional in accordance with their terms;
            -  the relevant funding agreements required to partially capitalise NewBEECo being duly executed by
               the parties thereto and becoming unconditional in accordance with their terms;
            -  key indirect shareholders of MS333 irrevocably committing to reinvesting pursuant to the MS333
               Reinvestment;
            -  the Independent Board Sub-Committee passing resolutions in relation to the Replacement BEE
               Transaction that, as a ?related party transaction? in terms of the JSE Listings Requirements (the
               ?Listings Requirements?), the issuing of shares pursuant to the Replacement BEE Transaction
               Subscription is fair insofar as the shareholders of Exxaro are concerned, and that the Exxaro Board
               has been so advised by an independent expert acceptable to the JSE; the resolution will also
               include that the issuing price of the shares is adequate;
            -  the ordinary shareholders of Exxaro (excluding MS333) passing the following resolutions in relation
               to the Replacement BEE Transaction:
               -   an ordinary resolution of independent shareholders required in terms of paragraph 10.4(e) of the
                   Listings Requirements to approve all elements of the Replacement BEE Transaction that qualify
                   as a ?related party transaction? in terms of the Listings Requirements; and
               -   a special resolution of shareholders required in terms of clause 3.1(4) of Exxaro?s memorandum
                   of incorporation to approve the issue of new Exxaro Shares to NewBEECo; and
            -  a prospectus in terms of the Companies Act, being registered in respect of the shares in
               NewBEECo, to be offered to the Reinvesting MS333 Shareholders.

3. MS333 UNWIND AND REGULATED PLACEMENT

   3.1.  Introduction

         MS333 will not be retained as the empowerment vehicle for the Replacement BEE Transaction. The
         MS333 Unwind will therefore apply to all the Exxaro Shares owned by MS333 after the Specific
         Repurchase.
         The terms of the Existing BEE Transaction allows MS333 shareholders to determine the fiscally most
         efficient manner to effect the MS333 Unwind. Detailed terms for the MS333 Unwind are still to be
         negotiated and finalised. The detailed terms of the MS333 Unwind will be announced to the market once
         the detailed transaction agreements have been finalised and agreed. In terms of the Implementation
         Agreement, it was agreed that the MS333 Unwind will be implemented by no later than three months from
         the earlier of: i) agreement of the detailed transaction agreements; or ii) 30 April 2017, or such other date
         as agreed to in writing between Exxaro and MS333.
         It is anticipated that, as part of the MS333 Unwind, the indirect shareholders of MS333 will be entitled to
         elect whether to:
         -   reinvest in the Replacement BEE Transaction (pursuant to the MS333 Reinvestment);
         -   divest of their (indirect) interest in Exxaro and receive a cash consideration; and / or
         -   retain shares in Exxaro outside of the structure of the Replacement BEE Transaction
         Exxaro recognises its responsibility to all Exxaro shareholders to maintain an orderly market in Exxaro
         Shares, particularly in respect of the MS333 Unwind, which could result in a large number of Exxaro
         Shares being placed in the market. As such Exxaro will continue to explore all options to ensure a
         coordinated exit of MS333?s shareholding in Exxaro upon the MS333 Unwind, which may include market
         placements, sales to third parties or further share repurchases, subject to the requisite approvals.

   3.2.  MS333 indirect shareholder election

         As described above, in order to enable the MS333 Unwind and Replacement BEE Transaction, the indirect
         shareholders of MS333 will be entitled to elect whether to:
         -   participate in the Replacement BEE Transaction and reinvesting Exxaro Shares into the Replacement
             BEE Transaction (as part of the MS333 Reinvestment); or
         -   not to participate in the Replacement BEE transaction and therefore to either divest of their (indirect)
             Exxaro Shares and receive a cash consideration, or to retain Exxaro Shares outside the structure of
             the Replacement BEE Transaction; or
         -   a combination of the two options above.

  3.3.   Regulated placement and coordination

         The Implementation Agreement governs the regulated sale of Exxaro Shares by MS333 or any direct or
         indirect MS333 shareholder pursuant to the MS333 Unwind.
         Due to the potential for a negative impact on shareholder value for all Exxaro shareholders (including
         MS333) if a large number of Exxaro Shares were to come onto the market simultaneously, the
         Implementation Agreement provides that MS333 and all its direct shareholders are, and will procure that all
         indirect shareholders are, bound by the following:
         -   all sales of Exxaro Shares by MS333, the IDC and / or any direct or indirect shareholder of MS333, will
             be implemented in accordance with the Implementation Agreement;
         -   in order to maintain an orderly market in Exxaro Shares, Exxaro and MS333 will establish a committee
             which will be comprised of representatives of Exxaro and MS333 (the ?Joint Advisory Committee?)
             which shall be tasked with considering the most practical and efficient means of disposing of the
             Exxaro Shares of shareholders who have elected to divest all or some of their Exxaro Shares. The
             Joint Advisory Committee will consider and decide on the preferred method for the disposal of their
             Exxaro Shares and will act as agent of the relevant shareholders in relation to all decisions of these
             shareholders for the sale of their Exxaro Shares. The Joint Advisory Committee will consist of six
             members, nominated equally by Exxaro and MS333, who shall be entitled to replace their nominees on
             the Joint Advisory Committee at any time;
         -   all MS333 direct and indirect shareholders who elect to receive Exxaro Shares and become direct
             holders of ordinary shares in Exxaro as a result of the implementation of the MS333 Unwind, will be
             restricted from disposing of their Exxaro Shares for a period to be determined by the Joint Advisory
             Committee, acting reasonably. After the restricted period determined by the Joint Advisory Committee
             terminates, such shareholders will be free to deal with their Exxaro Shares as they see fit.

4. THE SPECIFIC REPURCHASE

  4.1.   Overview of the Specific Repurchase

         In terms of the Repurchase Implementation Agreement, Exxaro has undertaken to repurchase and cancel
         a certain number ,being more than 5%, of Exxaro Shares to the value of R3 524 433 434 from MS333 (the
         ?Repurchase Scheme?). As such, the Specific Repurchase is to be effected in accordance with, inter alia,
         section 114 of the Companies Act and will require the passing of a special resolution of Exxaro
         shareholders, the preparation of an independent fair and reasonable opinion on the terms of the
         Repurchase Scheme and giving rise to shareholders? appraisal rights in terms of section 115 of the
         Companies Act.

  4.2.   Rationale for the Specific Repurchase
         The arrangements regulating the Existing BEE Transaction will come to an end on the Final Date. As a
         result of this termination, it is anticipated that a large number of Exxaro Shares could be placed in the
         market by MS333.
         In addition, the funding procured by MS333 in order to finance its participation in the Existing BEE
         Transaction matures in the first quarter of 2017. The implementation of the Repurchase Scheme is
         intended to contribute to the orderly disposal by MS333 of its Exxaro Shares, and would reduce the
         potential for an Exxaro Share overhang in the market. Holistically, the Repurchase Scheme results in a
         superior outcome for Exxaro by offering greater flexibility, a lesser impact on the market price of Exxaro?s
         shares as well as less management commitment, given that any potential market placement will be
         reduced by the Specific Repurchase.
         Furthermore, Exxaro intends to enter into the Replacement BEE Transaction in 2017 to achieve its desired
         level of HDSA ownership. The Replacement BEE Transaction will necessitate the issue of new Exxaro
         Shares which would be dilutive for all Exxaro Shareholders. Therefore the Repurchase Scheme is also an
         anti-dilutive measure in anticipation of the Replacement BEE Transaction that would be in the best interest
         of Exxaro and its shareholders.

  4.3.   Terms of the Specific Repurchase
         The consideration to be offered by MS333 in terms of the Specific Repurchase will be a cash consideration
         per Exxaro share at a price equal to an 8% discount to the 20-day weighted average traded price
         (?WATP?) per Exxaro Share repurchased as at the last business day preceding the general meeting at
         which the Specific Repurchase is to be considered (the ?General Meeting?).
         MS333 will utilise the proceeds from the Specific Repurchase to settle its funding liabilities, which funding
         liabilities are expected to total R3 524 433 434, as at 31 January 2017 (?MS333 Funding Liabilities?).
         R486 613 206 of the MS333 Funding Liabilities represent a loan from Exxaro which will be repaid from the
         proceeds of the Specific Repurchase. The net cash outflow from Exxaro as a result of the Specific
         Repurchase will therefore be R3 037 820 229.
         The Specific Repurchase will be funded from a combination of internal cash resources and the contributed
         tax capital of Exxaro.
         The Exxaro Shares repurchased will immediately be cancelled and there is thus no effect on Exxaro?s
         treasury shares as a result of the Specific Repurchase.

  4.4.   Related Party Considerations
         MS333 is a material shareholder of Exxaro, and is therefore considered a related party under paragraph
         10.1(b)(i) of the Listings Requirements. In terms of paragraph 5.69(b) of the Listings Requirements, a
         special resolution must be passed by Exxaro shareholders in order to implement the Specific Repurchase.
         The votes of MS333 and its associates will not be taken into account in determining whether a quorum of
         Exxaro shareholders is present at the General Meeting, nor will it be taken into account in determining the
         results of the voting at the General Meeting.

  4.5.   Specific Repurchase Conditions Precedent
         The Specific Repurchase is subject to fulfillment of the following conditions precedent:
         - an independent expert preparing and issuing a favourable report stating that the Specific Repurchase
           is fair and reasonable to Exxaro shareholders, in accordance with section 114(2) of the Companies Act
           and paragraph 5.69(e) of the Listings Requirements;
         - the Independent Board Sub-Committee recommending to Exxaro shareholders that they vote in favour
           of the Specific Repurchase;
         - the passing of an Exxaro Board resolution that Exxaro will meet the solvency and liquidity test in terms
           of section 4 of the Companies Act immediately after implementing the Specific Repurchase;
         - the passing of an ordinary resolution of Exxaro shareholders (excluding MS333) required in terms of
           paragraph 10.4(e) of the Listings Requirements, to approve the Specific Repurchase to the extent that
           it qualifies as a ?related party transaction? in terms of the Listings Requirements;
         - the passing of a special resolution of Exxaro shareholders (excluding MS333), approving the Specific
           Repurchase, as required by section 115(2) of the Companies Act, read with section 114 of the
           Companies Act and paragraph 5.69(b) of the Listings Requirements including:
           -   to the extent required, the approval of the implementation of such resolution by the court; and
           -   if applicable, Exxaro not treating such resolution as a nullity, as contemplated in section 115(5)(b)
               of the Companies Act;
         - within 30 business days following the General Meeting at which the Specific Repurchase is approved,
           Exxaro shareholders exercise their rights in terms of section 164 of the Companies Act, by giving valid
           demands in terms of section 164(7) of the Companies Act, in respect of no more than 10% of the
           issued Exxaro shares. If Exxaro shareholders give notice objecting to the Specific Repurchase as
           contemplated in section 164(3) of the Companies Act, or vote against the resolution to approve the
           Specific Repurchase in respect of no more than 10% of the issued shares in Exxaro, this condition will
           be deemed to have been fulfilled at the time of the passing of the resolution to approve the Specific
           Repurchase; and
         - the issuing of a compliance certificate by the Takeover Regulation Panel (?TRP?) in relation to the
           Specific Repurchase, in accordance with section 119(4)(b) of the Companies Act.

  4.6.   Posting of circular and notice of General Meeting of Exxaro shareholders

         The circular to Exxaro shareholders containing the details of the Specific Repurchase, incorporating a
         notice of General Meeting and a form of proxy will be posted on Tuesday, 29 November 2016 (the
         ?Circular?). Exxaro shareholders are advised that the Circular is immediately available on Exxaro?s website:
         www.exxaro.com. The General Meeting of Exxaro shareholders will be convened, in terms of the notice of
         General Meeting forming part of the Circular, to vote on the Specific Repurchase. The General Meeting will
         be held at Exxaro Corporate Centre, Roger Dyason Road, Pretoria West, at 10h00 on Friday,30 December 2016.

  4.7.   Salient dates and times relating to the Specific Repurchase

         Set out below are the salient dates and times relating to the approval and implementation of the Specific
         Repurchase:

                                                                                                                   2016

         Record date to determine which Exxaro shareholders are eligible to                          Friday,18 November
         receive the Circular and notice of General Meeting on:

         Circular posted to Exxaro shareholders and notice convening the                            Tuesday, 29 November
         General Meeting published on SENS on:

         Notice convening the General Meeting published in the South African                        Tuesday, 29 November
         press on:

         Last day to trade in order to be eligible to attend and vote at the                        Tuesday, 20 December
         General Meeting on:

         Record date in order to vote at the General Meeting on:                                     Friday, 23 December

         Last day to lodge forms of proxy by 10h00 on:                                            Wednesday, 28 December

         General Meeting to be held at 10h00 at Exxaro Corporate Centre,                             Friday, 30 December
         Roger Dyason Road, Pretoria West on:

         Results of the General Meeting published on SENS on:                                        Friday, 30 December

                                                                                                                    2017

         Published in the South African press on:                                                     Tuesday, 3 January

         Last day for Exxaro minority shareholders who voted against the                               Friday, 6 January
         repurchase to require Exxaro to seek court approval for the
         Repurchase Scheme in terms of section 115(3)(a) of the Companies
         Act, on:

         Last day to send notice of adoption of special resolutions to dissenting                     Friday, 13 January
         shareholders in accordance of section 164 of the Companies Act:

         Last day for Exxaro minority shareholders who voted against the                              Friday, 13 January
         Repurchase Scheme to apply to court for leave to apply for a review
         of the Repurchase Scheme in terms of section 115(3)(b) of the
         Companies Act:

         Compliance certificate expected to be received from the TRP:                                 Monday, 16 January

         Finalisation announcement (when repurchase becomes                                          Tuesday, 17 January
         unconditional) expected to be released on SENS:

         Finalisation announcement published in the press:                                           Tuesday, 17 January

         Cancellation and delisting of shares on or about:                                            Friday, 20 January

         Notes:

         1.   All times shown above are South African local time.
         2.   All dates and times in respect of the Specific Repurchase are subject to change. The above dates have been determined based on
              certain assumptions regarding the Specific Repurchase. If the relevant dates in respect of the Specific Repurchase change and the
              dates above are impacted a change will be released on SENS and published in the press.

5. INVESTOR CALL

   A dial-in teleconference call on the details of this announcement will be held on Thursday, 24 November 2016 at
   16h30 South African time (Internet broadcast: www.exxaro.com).
   Dial-in teleconference numbers
   -   Republic of South Africa toll-free: 0800 200 648
   -   Johannesburg: 011 535 3600 / 010 201 6800
   -   UK toll-free: 0808 162 4061
   -   USA and Canada toll-free: 1 855 481 5362
   -   Conference ID: Exxaro BEE Transaction teleconference

   Playback
   A playback will be available until 30 November 2016. To access the playback, dial one of the following numbers
   using the playback code 54777#:
   -   South Africa: 011 305 2030
   -   UK (Toll-free): 0808 234 6771
   -   USA & Canada: 1 855 481 5363
   -   Australia (Toll-free): 1 800 091 250

6. CAUTIONARY ANNOUNCEMENT

   Exxaro shareholders are advised that the Company has entered into the Implementation Agreement that will
   govern negotiations relating to the MS333 Unwind and the Replacement BEE Transaction which, if successfully
   implemented, may have a material effect on the Company?s securities. Accordingly, Exxaro shareholders are
   advised to exercise caution when dealing in the Company?s securities until a detailed announcement relating to
   the MS333 Unwind and Replacement BEE Transaction is made.

CH Wessels
Group Company Secretary
Pretoria
22 November 2016

Financial advisor and transaction sponsor to Exxaro
Rand Merchant Bank, a division of FirstRand Bank Limited

Legal advisor to Exxaro
Norton Rose Fulbright South Africa

Company sponsor to Exxaro
Absa Bank Limited, acting through its corporate and investment bank division

Tax advisor to Exxaro
Cliffe Dekker Hofmeyr Incorporated

Financial advisor to MS333
Tamela

Legal advisor to MS333
Fasken Martineau

Independent Expert
KPMG Services Proprietary Limited

Date: 22/11/2016 05:00:00 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.