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Announcement regarding a sponsorship agreement with a related party
SALUNGANO GROUP LIMITED
(previously known as Wescoal Holdings Limited)
Incorporated in the Republic of South Africa
(Registration number 2005/006913/06)
Share code: SLG
ISIN: ZAE000306890
(“Salungano Group” or “the Company”)
ANNOUNCEMENT REGARDING A SPONSORSHIP AGREEMENT WITH A RELATED
PARTY
1. INTRODUCTION
Shareholders are advised that the Salungano Group has entered into a sponsorship
agreement (the “Sponsorship Agreement”) with Selmadex Proprietary Limited
(“Selmadex”) operating as the Venda Football Academy (“VFA”) (the “Sponsorship”).
Salungano Group has agreed to sponsor VFA for an amount of R15 000 000 over three
years, with a maximum contribution of R5 000 000 per year.
Mr Ramaite, the chief executive officer and a material shareholder of the Company is
also the founder and majority owner of VFA and therefore the entering into the
Sponsorship Agreement is classified as a related party transaction in terms of the JSE
Listings Requirements (“JSE Listings Requirements”).
2. RATIONALE FOR THE SPONSORSHIP
The Sponsorship compliments Salungano Group’s new strategic direction and would
serve to promote and position the new Salungano brand in the market (evolving from
coal to diverse renewable energy investments).
The VFA team and management will conduct football clinics/training at the local
community facilities of the Moabsvelden mine community and surrounding areas.
The VFA team and management will attend key events (social labour plan-related project
launches and project milestones) organised by the Salungano Group and support arts,
cultural and sporting development programmes within the Salungano Group at local
communities of the Salungano Group’s mines.
The football team will be utilised as Salungano Group’s “face” and communities will
mobilise around the team. The team plays throughout the country and will contribute to
sports and skills development at Salungano Group mine areas in the Victor Khanye
municipal district.
Partnerships with universities such as the University of Venda will promote the
development of the youth.
Soccer as a branding platform is extremely popular among the communities in which
Salungano Group operates and could be more successful than “traditional” marketing
initiatives such as television advertisements.
3. DETAILS OF THE SPONSORSHIP
The Sponsorship includes the provision by Salungano Group of the following:
• purchase of an official Salungano VFA tour bus;
• financial support over a period of three years;
• development of soccer at the University of Venda and 4 other SAB league
development teams under the auspices of SAFA Vhembe;
• development of team and management talent;
• purchase of VFA’s vehicles for the transport of the players and coaches;
• stipend contributions to the VFA club for the three year term of the Sponsorship;
and
• any other financial and non-financial support as requested by Selmadex for VFA’s
purposes.
In return for the provision of the Sponsorship, Salungano Group will receive the
following:
• Salungano Group’s logo will appear as the prominent sponsor on all materials used
by VFA such as the team kit, tour bus, vehicles, programmes, and be prominently
displayed at all tournament matches in which VFA is involved;
• Salungano Group will be prominently named in all VFA tournament publications
and publicity, including all VFA press releases, interviews and post-match publicity;
• Salungano Group will enjoy prominent media coverage on VFA posters, digital
screens, websites and social media pages;
• The VFA will ensure that details of the Sponsorship is recorded, in a form
acceptable to Salungano, in all publications and publicity relating to the
Sponsorship during the term. VFA shall not publicise, or permit anyone else to
publicise, the sponsorship other than in a form to which Salungano Group has
given its prior written approval
• banners and flags bearing the Salungano Group logo will be prominently displayed
at the VFA ground when appropriate during the term;
• Salungano Group shall have the right to advertise and promote the Sponsorship
in a choice of mediums, including, but not limited to:
o press, television and radio; and
o local, provincial and national football community,
• in addition, the following benefits will be made available:
o a minimum of 5 places at pre- and post-match receptions;
o a minimum of 10 tickets to all VFA home league matches;
o 3 Salungano Group executives will have PSL VIP accreditation to attend
matches; and
o observer status at VFA Exco meetings where sponsorship discussions are
on the agenda.
4. FINANCIAL INFORMATION
Salungano Group incurs the Sponsorship expense of R15 000 000 over the three year
Sponsorship Agreement. There are no assets attributable to the Sponsorship that will
be owned by Salungano Group.
5. CATEGORISATION AND SMALL RELATED PARTY TRANSACTION
The entering into of the Sponsorship Agreement is considered a “small related party
transaction” in terms of paragraph 10.7 of the JSE Listings Requirements as Salungano
Group will be transacting with a “related party” being Selmadex and accordingly no
shareholder approval is required provided that an independent expert has confirmed
that the terms of the Sponsorship are fair insofar as the Company’s shareholders are
concerned.
The board of directors of Salungano Group appointed Merchantec Capital (the
“Independent Expert”) to provide an independent fairness opinion on the Sponsorship
(the “Fairness Opinion”) in compliance with paragraph 10.7(b) of the JSE LR. The
Independent Expert has considered the terms and conditions of the Sponsorship and is
of the opinion that the Sponsorship is fair insofar as Salungano Group shareholders are
concerned. The Fairness Opinion is available for inspection at the registered office of
the Company, 1st Floor, Building 10, 142 Western Service Road, Woodmead, Sandton
2191 for a period of 28 days from the date of this announcement or may be obtained on
request from Salungano Group’s Company Secretary at:
yolande@salunganogroup.com.
20 October 2022
Corporate advisor and Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Independent Expert
Merchantec Capital
Date: 20-10-2022 01:01:00
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