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SALD - Sallies Limited - Mandatory offer and renewal of cautionary
announcement
Sallies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1903/001879/06)
Share code: SAL ISIN: ZAE000022588
JSE Code: SALD ISIN: ZAE000117305
("Sallies" or "the Company")
MANDATORY OFFER BY FLUORMIN PLC OR A WHOLLY OWNED SUBSIDIARY TO ALL
REMAINING SALLIES SHAREHOLDERS AND CONVERTIBLE DEBENTURE HOLDERS ("SALLIES
SECURITY HOLDERS") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1 INTRODUCTION
Sallies Security Holders are referred to the cautionary announcements
published by Sallies between 28 December 2010 and 18 July 2011
regarding the proposed transaction between Fluormin Plc, formerly
known as Maghreb Minerals Plc ("Fluormin"), Firebird Global Master
Fund, Ltd and Firebird Global Master Fund II, Ltd (collectively
"Firebird") whereby Fluormin conditionally agreed to purchase
Firebird`s entire ordinary shareholding and convertible debenture
holding in Sallies ("Acquisitions") for a consideration of 0.0277
Fluormin shares per Sallies ordinary share and 0.0646 Fluormin shares
per Sallies convertible debenture (the "transaction"). Sallies
Security Holders are notified that the transaction became
unconditional on 8 September 2011 after the completion of the
Acquisitions. The transaction has resulted in Fluormin being required
to notify Sallies Security Holders of Fluormin`s intention to acquire,
directly or through a wholly-owned subsidiary (the "Offeror"), the
remaining Sallies shares and convertible debentures.
2 ABOUT FLUORMIN
Fluormin was admitted to trading on AIM, the market owned and operated
by the London Stock Exchange ("AIM"), in December 2004 with a focus on
base metals in Tunisia. Fluormin recently sold its base metal projects
for consideration of US$10.22 million and the right to all fluorspar
produced as a by-product from such projects at the incremental cost of
producing same. The Fluormin group has retained an interest in the
fluorspar revenues derived from the assets under off take agreements
with the purchaser in respect of its base metal projects. The Fluormin
group continues to hold an exploration permit in Tunisia covering the
Zriba-Guebli fluorspar exploration project. Fluormin has been
exploring this asset since 2006 and, in the view of the Fluormin
board, it remains a potentially valuable asset to Fluormin. Fluormin
has also completed the acquisition of a 20% interest in Kenya
Fluorspar Company Limited, a private Kenyan company operating the
Kenya Fluorspar mine at Kimwarer in Kenya. The focus of Fluormin is
now solely on the development of assets in the fluorspar sector.
3 MANDATORY OFFER
Prior to the transaction, Fluormin held 82,335,700 Sallies ordinary
shares which equates to 11.36% of the issued Sallies ordinary shares.
As a result of the transaction, Fluormin now holds 567,294,306 Sallies
ordinary shares which equates to a shareholding of 78.3% of the issued
Sallies ordinary shares. Furthermore Fluormin now holds 83,412,850 of
the Sallies convertible debentures which equates to a holding of 58%
of the Sallies debentures in issue. As a result of Fluormin`s holding
of Sallies ordinary shares and Sallies convertible debentures
surpassing 35% in each case, Fluormin is required, in terms of section
123 of the Companies Act, No. 71 of 2008 (the "Act"), to extend a
mandatory offer to the remaining Sallies Security Holders (the
"Offer"). Fluormin has decided to implement the Offer in terms of
Section 114 of the Act.
The Offer is to be effected, subject to the conditions set out in
Paragraph 5 below, by way of a scheme of arrangement under the
provisions of Section 114 of the Act in respect of Sallies ordinary
shareholders (the "Share Scheme") and Sallies convertible debenture
holders (the "Debenture Scheme"). On the implementation of the Share
Scheme, Sallies would become a wholly-owned subsidiary of the Offeror
and the listing of the Sallies shares and Sallies convertible
debentures on the JSE Limited ("JSE") would be terminated. Should the
transaction in terms of section 114 of the Act fail, the Offeror will
still be liable to make an unconditional mandatory offer in terms of
section 123 of the Act.
4 MATERIAL TERMS OF THE OFFER
Under the terms of the Offer, if implemented, Sallies Security Holders
may elect to receive:
* in the case of Sallies ordinary shareholders, 0.0277 Fluormin
ordinary shares for every one Sallies ordinary share held;
alternatively, or in the absence of any election by a Sallies
shareholder, a cash consideration of 14 cents for every one
Sallies ordinary share held (the "Cash Consideration");
* in the case of Sallies convertible debenture holders, 0.0646
Fluormin ordinary shares for every one Sallies convertible
debenture held; alternatively, or in the absence of any election
by a Sallies convertible debenture holder, a cash consideration
of 50 cents for every one Sallies convertible debenture held; or
* in the case of Sallies option holders, a cash consideration
equivalent to the "in the money" value of the Sallies options on
a net cash cancellation basis, being an amount equal to the
difference between the Cash Consideration and the strike price of
the Sallies options, upon the Schemes becoming operative. Option
holders who do not accept the cash offer will be permitted to
retain their options and exercise them in accordance with their
terms.
5 CONDITIONS PRECEDENT
The implementation of the Schemes is subject to the fulfilment of the
following conditions precedent:
* Receipt of the necessary approvals required from the Takeover
Regulation Panel ("TRP") and the JSE;
* Receipt of the necessary Exchange Control approvals required from
the South African Reserve Bank;
* The Schemes being approved by the requisite majority of Sallies
shareholders, Sallies debenture holders and / or Sallies option
holders and: (a) to the extent required, the approval of the
implementation of such resolutions by a Court and (b) if
applicable, Sallies not treating the aforesaid resolution as a
nullity.
6 FUNDING OF THE MANDATORY OFFER CONSIDERATION
The Offer results in an affected transaction in terms of the Takeover
Regulations established in terms of section 120 and 123 of the Act.
Fluormin has, as required in terms of the Act and the Companies
Regulations, 2011, provided a cash confirmation to the TRP confirming
that the Offeror has sufficient cash resources to satisfy the full
cash consideration payable by the Offeror in terms of the Offer.
Fasken Martineau DuMoulin (Pty) Ltd has provided the TRP with an
irrevocable and unconditional confirmation that sufficient funds are
held in escrow to settle the full Offer Consideration that may become
payable on implementation of the Offer. The confirmation has been
provided in terms of the provisions of regulation 111(4) and 111(5) of
the Takeover Regulations.
7 OPINIONS AND RECOMMENDATIONS
The Offer is classified as an affected transaction in terms of the Act
and the Takeover Regulations, prescribed in terms of section 120 of
the Act. Accordingly, the independent Directors of Sallies
("Independent Board") are in the process of appointing an independent
expert, as required in terms of section 114 (2) of the Act, read with
regulation 90 (1) and regulation 110 of the Regulations, for the
purposes of providing a fairness opinion on the terms of the Offer.
The opinions of the independent expert and the Independent Board will
be included in the circular to be distributed to Sallies Security
Holders. The Independent Board comprises: Andrew Kamau, Jurgen Kogl,
Stephen Morris, Sandile Swana and Patrick Cooke.
8 RESPONSIBILITY STATEMENT
Fluormin and the Independent Board accept responsibility for the
information contained in this announcement, and to the best of their
respective knowledge and belief, the information is true and, where
appropriate, this announcement does not omit anything likely to affect
the importance of the information included.
9 PRO FORMA FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
In compliance with the Companies Regulations, 2011, promulgated under
the Act, pro forma financial effects must be disclosed to provide
information on the impact of the Offer on Sallies reported financial
statements. As the financial effects of the Offer have not yet been
determined, Sallies Security Holders are advised to continue
exercising caution when dealing in the Company ordinary shares and
convertible debentures until such a time that the financial effects
are released.
10 CIRCULAR TO SALLIES SECURITY HOLDERS
A circular containing details of the Offer and the terms and timing
thereof, as well as a notice of general meeting, will be posted to
Sallies Security Holders in due course.
Pretoria
9 September 2011
Sponsor: Bridge Capital Advisors (Pty) Limited
Legal Advisor to Fluormin Plc: Fasken Martineau DuMoulin (Pty) Ltd
Legal Advisor to Sallies: Cliffe Dekker Hofmeyr Inc.
Date: 09/09/2011 14:10:01 Supplied by www.sharenet.co.za
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