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Updated financial effects of the Minoscape acquisitions and specific repurchase
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 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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