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Disposals Of Benicon Coal Proprietary Limited And Benicon Mining Proprietary Limited And Further Cautionary Announce
SENTULA MINING LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1992/001973/06)
Share code: SNU ISIN: ZAE000107223
(“Sentula” or “the Company”)
DISPOSALS OF BENICON COAL PROPRIETARY LIMITED AND BENICON MINING PROPRIETARY
LIMITED AND FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the announcements released on SENS on 28 February 2014 and 14 April 2014
regarding the Disposals and using the terms defined therein unless otherwise stated are hereby provided
with an update thereto.
1. PRO FORMA FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the Disposals on Sentula’s basic earnings per
share, headline earnings per share, net asset value per share and tangible net asset value per share.
The pro forma financial effects have been prepared to illustrate the impact of the Disposals, on an individual
basis and on an aggregated basis, on the reviewed condensed consolidated interim results of Sentula for the
six months ended 30 September 2013, had the Disposals occurred on 1 April 2013 for purposes of the
statement of comprehensive income and on 30 September 2013 for purposes of the statement of financial
position.
The pro forma financial effects have been prepared using accounting policies that comply with IFRS and that
are consistent with those applied in the audited results of Sentula for the twelve months ended 31 March
2013 as well as the reviewed condensed consolidated interim results for the six months ended
30 September 2013.
The pro forma financial effects which are the responsibility of the directors of the Company are provided for
illustrative purposes only and, because of their pro forma nature may not fairly present Sentula’s financial
position, changes in equity, results of operations or cash flow nor the effect and impact of the Disposals
going forward.
The full financial effects will be included in the circular to Sentula shareholders (“circular”) which circular is
currently being finalised and is expected to be distributed before the end of May 2014.
Pro Pro
forma forma
After After
Before Benicon Benicon Aggreg-
the Coal % Mining % Pro forma ated
Disposals Disposal Change Disposal Change After the %
1 2 from 1 to 2 3 from 1 to 3
Disposals Change
Basic (loss)/earnings
per share (cents) (42.8) (14.4) 66.4 (42.2) 1.4 (13.8) 67.8
Headline (loss)/earnings
per share (cents) (6.8) (5.8) 14.7 (6.6) 2.9 (5.6) 17.6
Net asset value per
share (cents) 226.5 212.3 (6.3) 225.5 (0.4) 211.3 (6.7)
Tangible net asset
value per share (cents) 219.6 205.4 (6.5) 218.6 (0.5) 204.4 (6.9)
Weighted average
number of shares in
issue (000’s) 581 005 581 005 - 581 005 - 581 005 -
Total number of shares
in issue (net of treasury
shares) (000’s) 581 005 581 005 - 581 005 - 581 005 -
Notes:
1. Extracted from the reviewed condensed consolidated interim results of Sentula for the six months ended
30 September 2013.
Benicon Coal Disposal
2. The “Pro forma After Benicon Coal Disposal” column reflects the pro forma financial effects of the Benicon Coal
Disposal on earnings, headline earnings, net asset value and net tangible asset value per share based on the
following assumptions:
- The Benicon Coal Disposal is effective 1 April 2013 for purposes of the pro forma financial effects on
earnings, and headline earnings per share and 30 September 2013 for purposes of the pro forma financial
effects on net asset value and net tangible asset per share.
- Once-off transaction costs of R2.2 million have been allocated to profit and loss and are once off in nature.
- In terms of Sentula's senior debt facility under the debt agreement which records the terms of Sentula’s senior
debt facilities in the amount not exceeding R700 million (“Debt Agreement”) (in terms of which Sentula may
not apply for any additional financing without the prior approval of the SBSA Consortium, being the providers
of Sentula’s senior debt facility) and given that the coal assets are held as security by the SBSA Consortium,
100% of the net cash proceeds of R97.8 million (net of deferred purchase consideration of R50 million and
after transaction costs of R2.2 million) arising from the disposals of coal assets must be applied to decrease
the indebtedness to the SBSA Consortium under the Debt Agreement. Consequently, an interest saving of
R4.8 million has been assumed based on a rate of 9.3875%, being the average rate on the senior debt facility
provided by the SBSA Consortium for the six month period.
- R50 million of the total proceeds of R150 million is deferred for a period of 18 months and will carry interest at
a rate of Prime +1%, resulting in interest income recognised of R2.4 million.
- No adjustment for South African taxation has been made for purposes of the pro forma financial effects as the
Company has sufficient assessable losses (for which no deferred tax asset has been raised) to off-set the
interest effects.
Benicon Mining Disposal
3. The “Benicon Mining Disposal” column reflects the pro forma financial effects of the Benicon Mining Disposal on
earnings, headline earnings, net asset value and net tangible asset value per share based on the following
assumptions:
- The Benicon Mining Disposal is effective 1 April 2013 for purposes of the pro forma financial effects on
earnings, and headline earnings per share and 30 September 2013 for purposes of the pro forma financial
effects on net asset value and net tangible asset per share.
- Once-off transaction costs of R0.9 million have been allocated to profit and loss and are once off in nature.
- In terms of Sentula's senior debt facility under the Debt Agreement (in terms of which Sentula may not apply
for any additional financing without the prior approval of the SBSA Consortium) and given that the coal assets
are held as security by the SBSA Consortium, 100% of the net cash proceeds of R35.9 million (after
transaction costs of R0.9 million is deducted from the gross proceeds of R36.8 million) arising from the
disposals of coal assets must be applied to decrease the indebtedness to the SBSA Consortium under the
Debt Agreement. Consequently, an interest saving of R1.7 million has been assumed based on a rate of
9.3875%, being the average rate on the senior debt facility provided by the SBSA Consortium for the six
month period.
- No adjustment for South African taxation has been made for purposes of the pro forma financial effects as the
Company has sufficient assessable losses (for which no deferred tax asset has been raised) to off-set the
interest effects.
2. FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the further cautionary announcements dated 29 January 2014 and 14 April
2014 regarding the approach by parties interested in certain other businesses within the Sentula portfolio.
As the board of directors of Sentula is still engaged in the strategic evaluation of alternative options to
further unlock shareholder value and commensurately reduce the Group’s senior debt, which may result
in actions that could have a material effect on the price of Sentula’s securities, shareholders are advised
to continue exercising caution when dealing in Sentula’s securities until further announcements are made.
Johannesburg
16 May 2014
Sponsor
Merchantec Capital
Auditors and reporting accountants
PricewaterhouseCoopers Inc.
Legal advisors
Cliffe Dekker Hofmeyr
Competent Person and Competent Valuator
Venmyn Deloitte
Date: 16/05/2014 02:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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