Wrap Text
MVL/NHM - Mvelaphanda Resources / Northam Platinum - Joint announcement
regarding the proposed distribution
Mvelaphanda Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1980/001395/06)
Share Code: MVL
ISIN: ZAE000050266
("Mvela Resources")
Northam Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1977/003282/06)
Share Code: NHM
ISIN: ZAE000030912
("Northam")
JOINT ANNOUNCEMENT REGARDING THE PROPOSED DISTRIBUTION OF 181 980 981
NORTHAMORDINARY SHARES TO MVELA RESOURCES ORDINARY SHAREHOLDERS, THE PROPOSED
SPECIFIC REPURCHASE OF 35 000 000 MVELA RESOURCES `A` ORDINARY SHARES AND THE
PROPOSED ACQUISITIONBY NORTHAM OF THE ENTIRE ISSUED ORDINARY SHARE CAPITAL OF
MVELA RESOURCES AFTERTHE DISTRIBUTION AND REPURCHASE
Introduction
Further to the announcement of 14 January 2011 regardingthe successful
distribution by Mvela Resources of 22 218 000 ordinary shares in Gold Fields
Limited ("Gold Fields"), Mvela Resources is pleased to announce that it is
now implementing the next stage of its stated unbundling strategy. The
shareholders of Mvela Resources and Northam ("the companies") are advised
that:
Mvela Resources proposes to distribute its entire shareholding in Northam,
comprising 181 980 981 Northam ordinary shares ("the Northam distribution
shares"), to the holders of Mvela Resources ordinary shares ("the Northam
distribution") by way of an unbundling in accordance with section 46 of the
Income Tax Act,No.58 of 1962, as amended;
Mvela Resources proposes to repurchase 35 million Mvela Resources `A`
ordinary shares in its issued share capital from a subsidiary of Afripalm
Resources (Proprietary) Limited ("Afripalm Resources"), for a total
consideration equal to R700 000 in cash (and accordingly a price of R0.02 for
each Mvela Resources `A` ordinary share) ("the Afripalm repurchase");
Mvela Resources is cancelling the referral of opportunities arrangement
between Afripalm Resources and Mvela Resources ("Afripalm referrals
cancellation"); and
Northam proposes to acquire the entire issued ordinary share capital of Mvela
Resources after completion of the Northam distribution and the Afripalm
repurchase, pursuant to a scheme of arrangement in terms of section 311 of
the Companies Act and section 42 of the Income Tax Act, 1962 ("the scheme").
In terms of the scheme, Northam will offer 9.5980 new Northam ordinary shares
for every 100 Mvela Resources ordinary shares held ("scheme consideration"),
equivalent to 20 912 228 new Northam ordinary shares. The scheme
consideration is based on a Northam ordinary share price of R47.00, resulting
in an aggregate scheme consideration for the entire issued ordinary share
capital of Mvela Resources of R982.8 million.
The Northam distribution, the Afripalm repurchase, the Afripalm referrals
cancellation and the scheme are collectively referred to in this announcement
as "the proposed transactions". Following the implementation of the proposed
transactions, Mvela Resources intends to delist its ordinary shares from the
securities exchange operated by the JSE Limited ("the JSE").
Rationale
Rationale for the Northam distribution
Due to its shareholding in Northam, Mvela Resources has been classified as a
"pyramid company" by the JSE. The JSE prohibits the listing of pyramid
companies and has accordingly instructed Mvela Resources to eliminate the
pyramid company structure or delist.
Furthermore, Mvela Resources has historically traded at a discount to its net
asset value ("NAV"), primarily due to its pyramid structure and limited
influence on strategic and capital decisions in respect of most of its
investments.
In February 2009, the board of directors of Mvela Resources ("the Mvela
Resources board") decided that a strategy involving the distribution by Mvela
Resources of its remaining shares in Northam and Gold Fields would provide
the most appropriate means to unlock the value trapped within the corporate
structure as well as satisfying the Listings Requirements. The distribution
of the Gold Fields shares was implemented on Monday, 31 January 2011.
The Northam distribution will simply convert Mvela Resources ordinary
shareholders` interest in Northam from an indirect to a direct holding. Mvela
Resources ordinary shareholders will accordingly still retain their exposure
to the underlying assets of (and will have direct access to dividends and
other distributions from) Northam after the Northam distribution.
The Northam distribution is expected to achieve the objectives of Mvela
Resources` stated strategy by:
simplifying Mvela Resources` corporate structure;
removing the pyramid structure; and
eliminating the discount to NAV that Mvela Resources has historically traded.
Rationale for the scheme
Rationale for Mvela Resources
Upon implementation of the Northam distribution, the remaining assets of
Mvela Resources ("the remaining assets") will comprise:
net cash of not less than R650 million;
a 50% interest in the Dwaalkop platinum project ("Dwaalkop"), a joint venture
with Western Platinum Limited, an 82% owned subsidiary of Lonmin Plc
("Lonmin") ("Dwaalkop joint venture");
approximately 20.3% of the share capital of Trans Hex Group Limited ("Trans
Hex"), a diamond producing and marketing company listed on the JSE;and
a 51% initial participatory interest in the Kokerboom joint venture
exploration project ("Kokerboom").
The Mvela Resources board believes that the continued listing of Mvela
Resources after implementation of the Northam Distribution will not benefit
Mvela Resources shareholders or Mvela Resources itself, and that it will be
in the interests of Mvela Resources shareholders and Mvela Resources for
Northam, with its infrastructure, to develop Mvela Resources` remaining net
assets. Mvela Resources ordinary shareholders, as ordinary shareholders of
Northam, will also continue to have exposure to the future potential value
uplift from these assets.
Rationale for Northam
The Dwaalkop Platinum Project hosts a PGM resource of some 17 million ounces
PGE (4) on the eastern limb of the Bushveld Complex, some 100km north of
Northam`s Booysendal Mine. The property abuts Lonmin`s Limpopo operations, is
host to both the Merensky and UG2 reefs and has a strike length of
approximately 5.5km. Resource estimates amount to some 9.9 million ounces of
PGE (4) in the indicated class and 17 million ounces of PGE (4) if inferred
resources are included. With the relatively high sulphide content of
Dwaalkop`s UG2 ore, it could prove to be an invaluable constituent of
Northam`s smelter feed. A pre-feasibility study has been completed on the
project and a mining right application has been submitted which is currently
being processed by the Department of Minerals and Energy.
Trans Hex is a listed diamond exploration, mining and marketing company with
producing assets in South Africa and significant growth opportunities at its
new Luana project in Angola, which may offer upside in recovering diamond
markets.
The Kokerboom joint venture offers early stage earn-in exposure to a
greenfield Iron-Oxide Copper, Gold and massive sulphide deposits, exploration
project in the north western part of the Northern Cape Province.
The proposed acquisition of Mvela Resources provides Northam with a unique
combination of a significant capital raising and a project acquisition, while
maintaining its black economic empowerment status. More specifically the
scheme achieves the following:
by securing R650 million of additional cash funds, the scheme allows Northam
to further strengthen its balance sheet, in anticipation of its existing, and
future capital expenditure, specifically in connection with the development
of the Booysendal Platinum Project;
acquiringa 50% interest in the Dwaalkop platinum project;
after the scheme the Northam free float will increase from 35% currently to
approximately 64%, with an enlarged capital base, which enhances Northam`s
investment appeal amongst both local and international institutions; and
potential future earnings uplift for Northam emanating from the application
of the new shareholder funds to the development of the Booysendal project
will furthermore accelerate the benefits of the scheme for Northam`s
shareholders.
Rationale for the Afripalm cancellation transactions
Northam does not propose to enter into an arrangement with Afripalm Resources
similar to the referral of opportunities arrangement referred to in paragraph
1 above. Northam has therefore proposed that the referral of opportunities
arrangement be cancelled. Both Mvela Resources and Afripalm Resources have
agreed to this, subject to the fulfilment of the scheme conditions precedent
set out in paragraph 5 below.
Further, as Northam proposes to acquire 100% of the share capital of Mvela
Resources, it has proposed that the Mvela Resources `A` shares be repurchased
by Mvela Resources, and both Mvela Resources and Afripalm 1 have agreed to
this, subject to the fulfilment (or, if waiver is legally competent, and is
agreed to by Mvela Resources and Northam, waiver) of the scheme conditions
precedent (other than that relating to the implementation of the Northam
distribution).
Mvela Resources is willing to enter into the Afripalm referrrals cancellation
to facilitate the scheme.
Unaudited pro forma financial effects of the proposed transactionson Mvela
Resources
The unaudited pro forma financial effects set out below have been prepared to
assist Mvela Resources ordinary shareholders in assessing the impact of the
proposed transactions on the earnings per share ("EPS"), headline earnings
per share ("HEPS"), NAV and net tangible asset value ("NTAV") as of and for
the financial year ended 30 June 2010 and the unaudited pro forma statement
of comprehensive income and pro forma statement of financial position (in
Annexure 3) and the pro forma financial effects (in this paragraph) as of and
for the financial year ended 30 June 2010 have been prepared to illustrate:
the effect of the Northam distribution and the Afripalm repurchase (after the
recent exercise of 2.26 million share options under the Mvelaphanda Resources
Limited Share Option Participation scheme, the cancellation of the Afripalm 2
option(the "Afripalm 2 option cancellation"), the distribution of 22.2
million Gold Fields ordinary shares and the sale of 10 million Gold Fields
ordinary shares ("the Gold Fields distribution")); and
the effect of the scheme (after the adjusted Northam distribution and
Afripalm repurchase).
as if these transactions had occurred on 1 July 2009 for purposes of the pro
forma income statement, and on 30 June 2010, for purposes of the pro forma
statement of financial position. The unaudited pro forma financial
information is presented for illustrative purposes only and because of its
nature, may not fairly present Mvela Resources` financial position, changes
in equity, results of operations or cash flows.
The unaudited pro forma financial information has been prepared using
accounting policies that are consistent withInternational Financial Reporting
Standards ("IFRS") and with the basis on which the historical financial
information of Mvela Resources has been prepared.
The Mvela Resources directors are responsible for the compilation, contents
and preparation of the unaudited pro forma financial information and for the
financial information from which it has been prepared. Their responsibility
includes determining that the unaudited pro forma financial information has
been properly compiled on the basis as stated; that the basis is consistent
with the accounting policies of Mvela Resources for previous financial years
and the unaudited pro forma adjustments are appropriate for the purposes of
the unaudited pro forma financial information disclosed in terms of the
Listings Requirements.
AFTER AFTER AFTER Effect Adjuste Attribu Effect
the the the of the d AFTER table of the
Gold exercis Northam Northam the Northam scheme
Fields e of distrib distrib Northam results of
distrib 2.26 ution ution distrib per arrange
ution million and the and the ution Mvela ment
(1) share Afripal Afripal and the Resourc (Change
options m m Afripal es from
and the repurch repurch m share (4) to
Afripal ase ase repurch AFTER (5)
m 2 (3) Change ase the
optionc from (4) scheme
ancella (2) to( of
tion 3) arrange
(2) ment
(5)
Basic
Earnings (51.2) (53.2) 1065.1 1118.3 (143.6) 8.1 151.7
Per Share
("EPS") per
Mvela
Resources
ordinary
share
(cents)
Basic 7.9
Headline 2.8 0.3 (146.6) (146.9) (146.6) 154.5
Earnings
Per Share
("HEPS")per
Mvela
Resources
ordinary
share
(cents)
Net Asset 246.7
Value 2757.0 2680.8 327.5 (2353.4 327.5 (80.7)
("NAV") per )
Mvela
Resources
ordinary
share
(cents)
Net 94.0 (233.5)
Tangible 2757.0 2680.8 327.5 (2353.4 327.5
Asset Value )
("NTAV")
per Mvela
Resources
ordinary
share
(cents)
Weighted 2150641 2173241
average 69 2173241 2173241 69
number of 69 69
Mvela
Resources
ordinary
shares in
issue
Number of 2156211 2178811 2178811 2178811
Mvela 01 01 01 01
Resourcesor
dinary
shares in
issue at 30
June 2010
Weighted 381204
average 113
number of
Northam
ordinary
shares in
issue after
the scheme
Number of 381 554
Northam 228
ordinary
shares in
issue after
the scheme
Notes applicable to the unaudited pro forma financial effects
1) The "AFTER the Gold Fields distribution" column represents the unaudited
pro forma financial effects extracted from the circular that was distributed
to the shareholders of Mvela Resources and releasedon SENS on 15 December
2010 which was based on the Mvela Resources` audited and published financial
results for the year ended 30 June 2010, adjusted for the sale of 10 million
Gold Fields shares and for the distribution of 22.2 million Gold Fields
shares.
2) The "AFTER the exercise of 2.26 million share options and the Afripalm 2
option cancellation" column is based on the unaudited pro forma AFTER the
Gold Fields distribution column for the year ended 30 June 2010 and after
adjusting for the following principal assumptions:
- EPS and HEPS
2.1) 1 230 000 and 1 030 000 share options were exercised on 2 August 2010
and 22 December 2010 respectively resulting in cash receipts of R46.4
million. For the purposes of these unaudited pro forma financial effects it
was assumed that these options were exercised on 1 July 2009 resulting in an
equivalent increase in the weighted average number of ordinary shares in
issue during the period. Accordingly, a pro forma adjustment of interest
earned of R2.2 million, based on the net receipts from the exercise of the
share options at interest rates of between 6% p.a. and 6.5% p.a. (being the
interest rates applicable for actual interest bearing deposits made by Mvela
Resources during 2009/10), and the resultant tax expense of R620 000 are
included.
Furthermore, that the Afripalm 2 option cancellation was effective on 1 July
2009. For accounting purposes the Afripalm 2 option cancellation is treated
as a buy-back of an equity instrument. Therefore, the R150 million payment is
charged directly to equity. An adjustment forinterest foregone of R9.8
million based on interest rates of between 6% p.a. and 6.5% p.a. (being the
interest rates applicable for actual interest bearing deposits made by Mvela
Resources during 2009/10), and the resultant tax saving of R2.7 million are
included. These EPS and HEPS adjustments are of a recurring nature.
- NAV and NTAV
2.2) 1 230 000 and 1 030 000 share options were exercised on 2 August 2010
and 22 December 2010 respectively resulting in total cash received of R46.4
million. For the purposes of these unaudited pro forma financial effects, it
was assumed that these options were exercised on 30 June 2010, resulting in
an equivalent pro forma increase in the number of shares in issue on that
date.
Also assumed is that the Afripalm 2 option cancellation was effective on 30
June 2010. For accounting purposes the Afripalm 2 option cancellation is
treated as a buy-back of an equity instrument. Therefore, the R150 million
payment is charged directly to equity.
3. The "AFTER the Northam distribution and the Afripalm repurchases" column
is based on the unaudited pro forma"AFTER the exercise of 2.26 million share
options and the Afripalm 2 option cancellation" column based on the following
principal assumptions:
- EPS and HEPS
3.1) that the Northam distribution and the Afripalm repurchase were effective
on 1 July 2009.
3.2) the consolidated audited and published Northam financial results for the
year ended 30 June 2010 is eliminated, resulting in a reduction of profit
after tax for the year ended 30 June 2010 by R641.0 million of which R390.6
million accrued to the Mvela Resources` ordinary shareholders. This is of a
recurring nature.
3.3) Furthermore, the net consolidation journals for the year ended 30 June
2010 are reversed as well as the dividend received from Northam and the
related interest foregone of R5.4 million, because of dividends foregone,
based on interest rates of between 6% p.a. and 6.5% p.a. (being the interest
rates applicable for actual interest bearing deposits made by Mvela Resources
during 2009/10) and the related tax saving impact of R1.5 million. These
adjustments result in the total results of Northam for the year ended 30 June
2010 being eliminated from the Mvela Resources results for the year ended 30
June 2010. The effect of this is an increase in the profits for the year
after tax of R153.7 million of which R93.2 million accrued to the Mvela
Resources` ordinary shareholders.
3.4) A once-off gain of R2.7 billion recognised upon the derecognition of the
Northam distribution shares based on the market value of R43.17 per Northam
share on 28 January 2011 (being the last practicable date). No tax is
payable on this profit as it is an IFRS disclosure and the Northam
distribution is effected in terms of the unbundling rules of Section 46 of
the Income Tax Act.
3.5) A reduction in interest foregone relating to the Afripalm repurchase
amounting to R46 000 based on interest rates of between 6% p.a. and 6.5% p.a.
(being the interest rates applicable for actual interest bearing deposits
made by Mvela Resources during 2009/10) and the relating tax saving of R13
000. This is of a recurring nature.
3.6) Estimated costs relating to the Northam distribution of R21.4 million
and the related impact of interest foregone of R1.1 million based on the net
payment made at interest rates of between 6% p.a. and 6.5% p.a. (being the
interest rates applicable for actual interest bearing deposits made by Mvela
Resources during 2009/10) and the related tax saving of R309 000, which is
once-off in nature.
- NAV and NTAV
3.7) The Northam distribution was effective 30 June 2010;
3.8) Arecurring elimination of the consolidated net assets of Northam as at
30 June 2010 and the elimination of the accumulated consolidated entries of
Northam up to 30 June 2010 (together amounting to R5.1 billion).
3.9) The Afripalm repurchase for R700 000 resulting in a reduction of cash
and the related long-term liability.
3.10) Estimated costs relating to the Northam distribution of R21.4 million,
which is once-off in nature.
4) The "Adjusted AFTER the Northam distribution and the Afripalm repurchase"
column is based on the unaudited pro forma results AFTER the Northam
distribution and the Afripalm repurchase column and after applying the
following principal assumptions:
- EPS and HEPS
4.1) For purposes of the computation of EPS and HEPS the fair value gain on
the Northam distribution and the fair value loss on the disposal/distribution
of the Gold Fields shares are reversed (a net surplus of R2.6 billion) and
the related tax expense (R22.4 million). This adjustment is done for
comparative purposes because these gains/losses do not relate to the on-going
business of Mvela Resources.
- NAV and NTAV
4.2) No impact.
5) The Attributable Northam results per "Mvela Resources share AFTER the
scheme or arrangement" column is based on the unaudited pro forma results
Adjusted AFTER the Northam distribution and the Afripalm repurchase column
and after applying the following principal assumptions:
- EPS and HEPS
5.1) The scheme was effective on 1 July 2009,
5.2) inclusion of the Northam audited financial results for the year ended 30
June 2010 (amounting to a net profit of R641.0 million after tax) in order to
reflect the pro forma consolidated Northam results for the year ended 30 June
2010.
5.3) Estimated costs for Northam relating to the scheme of R7.7 million and
the estimated interest foregone of R242 000 based on the interest actually
earned by Northam during the year ended 30 June 2010 and the related tax
estimated tax saving of R68 000. These are once-off in nature.
5.4) The unaudited pro forma results per Northam share after the scheme
equates to:
- EPS per Northam share - 84.2 cents
- HEPS per Northam share - 82.3 cents
The scheme consideration is 0.09598 Northam shares for every Mvela Resources
ordinary share held.
Accordingly attributable Northam EPS and HEPS per Mvela Resources ordinary
share is a factor of the Northam EPS and HEPS after the scheme, multiplied by
the scheme consideration.
- NAV and NTAV
5.5) The scheme as effective on 30 June 2010.
5.6) That the liabilities and recoverable assets of Mvela Resources were
settled on 30 June 2010 (amounting to a net reduction in cash of R387.7
million).
5.7) That Northam issued 20 912 228 new ordinary shares in exchange for the
Mvela Resources ordinary shares under the scheme. The cost for Northam
equates to R982.8 million based on a price per Northam share of R47.00. The
fair value of the net Mvela Resources assets acquired by Northam under the
scheme is accounted for in the pro forma consolidated balance sheet of
Northam, resulting in an increase in the value of the mineral resources of
R349.3 million, being the fair value for the Dwaalkop and Kokerboom joint
venture assets, the inclusion of the Trans Hex shares at R50.5
million;assumed liabilities of R67.1 million and an increase in cash of R650
million. After the elimination of the Mvela Resources equity and pre
acquisition profits, this resulted in an increase in Northam`s shareholders
equity of R982.8 million.
5.8) That the accounted for estimated costs applicable to Northam for the
scheme were R7.7 million.
5.9) That the unaudited pro forma effect per Northam ordinary share after the
scheme equates to:
- NAV per Northam ordinary share - 2 570.6 cents
- NTAV per Northam ordinary share - 979.2cents
The scheme consideration is 0.09598 Northam shares for every Mvela Resources
ordinary share held.
Accordingly, the attributable Northam NAV and NTAV per Mvela Resources
ordinary share is a factor of the Northam NAV and NTAV after the scheme
multiplied by the scheme consideration.
Unaudited pro forma financial effects of the schemeon Northam
The table below sets out the unaudited pro forma financial effects of the
schemeon Northam`s basic EPS, HEPS, fully diluted EPS, NAV per share and NTAV
per share.
The unaudited pro forma financial effects have been prepared to illustrate
the impact of the scheme on the reported financial information of Northam for
the year ended 30 June 2010 had the schemeoccurred on 1 July 2009 for
statement of comprehensive income purposes, and on 30 June 2010, for
statement of financial position purposes.
The unaudited 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 Northam for the year ended 30 June 2010.
The unaudited pro forma financial effects are the responsibility of Northam`s
directors and have been prepared for illustrative purposes only and because
of their nature may not fairly present the financial position, results of
operations or cash flows of Northam after the scheme.
Notes Before the After the % change
scheme scheme
Basic EPS (cents) 1, 2 177.9 84.2 (52.7)
HEPS (cents) 1, 2 177.8 82.3 (53.7)
Fully diluted EPS (cents) 1, 3 177.7 82.3 (53.7)
NAV per share (cents) 4 2 449.3 2 570.6 5.0
NTAV per share (cents) 4 862.5 979.2 13.5
Weighted average number of 360 292 381 204 5.8
shares in issue (000`s)
Fully diluted weighted 360 464 381 377 5.8
average number of shares in
issue (000`s)
Notes:
The adjustment to the basic earnings per share, headline earnings per share
and fully diluted earnings per share figures represents the effects of the
inclusion of Mvela Resources after the Northam Distribution and Afripalm
repurchaseand after the interest foregone net of tax on the transaction costs
paid by Northam on the assumption that the disbursements had taken place on
30 June 2010 for statement of financial position purposes and 1 July 2009 for
statement of comprehensive income purposes.
The basic earnings per share and headline earnings per share are based on
the weighted average number of shares in issue during the period and assume
that the 20 912 228 consideration shares were issued on 1 July 2009.
The fully diluted earnings per share are based on the weighted average number
of shares in issue during the period plus the weighted average number of
Northam Share Option scheme options outstanding during the period and assumes
that the 20 912 228 consideration shares were issued on 1 July 2009.
The dilution of basic EPS of 53 % after the scheme does not reflect the
essence of the scheme. This is due to the fact that the pro formas have been
prepared on a historical basis, and therefore include finance costs and other
operating costs incurred by Mvela Resources, whereas on future earnings basis
the dilution will be far less, as interest will be accrued on the additional
cash acquired with the scheme in relation to the 20 912 228 consideration
shares issued to effect the scheme.
The net asset value and tangible net asset value are based on the actual
number of shares in issue at 30 June 2010, and assumes that the 20 912 228
consideration shares were issued at that date.
Conditions precedent
Northam distribution condition precedent
The Northam distribution is subject to the fulfilment of the scheme
conditions precedent (as outlined below) other than the implementation of the
Northam distribution.
Afripalm cancellation transactions condition precedent
The Afripalm cancellation transactions are subject to the fulfilment of the
scheme conditions precedent (as outlined below) other than the implementation
of the Northam distribution.
Scheme conditions precedent
The scheme is subject to the fulfilment (or waiver to the extent any
condition is capable of waiver) of the following conditions precedent by no
later than the dates stated below, or such other date as Mvela Resources and
Northam may agree:
the special resolution number approving the Northam distribution is passed by
Mvela Resources in general meeting by no later than 31 March 2011, the
resolution is lodged for registration with the relevant authority (if
registration is required) by no later than 31 March 2011, and (if
registration is required) the resolution is thereafter registered by the
relevant authority by no later than 31 May 2011;
the scheme is approved by no later than 31 March 2011 by a majority
representing not less than three-fourths of the votes exercisable by Mvela
Resources ordinary shareholders present and voting, either in person or by
proxy, at the scheme meeting;
the scheme is sanctioned by the South Gauteng High Court, Johannesburg ("the
Court") by no later than 31 May 2011; and
the order of Court sanctioning the scheme is registered with the relevant
authority by no later than 31 May 2011;
the receipt by no later than 31 May 2011 of all regulatory approvals, to the
extent required by law, from all applicable regulators in South Africa,
including without limitation, the JSE, the Securities Regulation Panel
("SRP") and the competition authorities established under the (South African)
Competition Act, 89 of 1998 ("competition authorities");
Northam ordinary shareholders in general meeting approving (by the required
majority) by no later than 31 March 2011 the proposal of the scheme and the
issue of Northam ordinary shares to directors of Northam;
the Northam distribution having been implemented; and
Mvela Resources confirming in writing on the date application to sanction the
scheme is filed with the Court, ("confirmation date") that:
it has 217 881 101 ordinary shares in issue;
it has not sold or disposed of any of its remaining assets in the period
between 7 February 2011 and the confirmation date("restricted period") other
than as contemplated in the proposed transactions;
it has net cash of not less than R650 million;
no distribution will have been made to its Mvela Resources
ordinaryshareholders in their capacity as such; and
in the restricted period the business of Mvela Resources will have been
substantially conducted in the normal, ordinary and regular course other than
implementation of the proposed transactions and the steps necessary to
implement the proposed transactions.
Northam confirming in writing on the Confirmation Date that:
it has in issue the aggregate of 361 258 500 ordinary shares other than
ordinary shares issued in the ordinary course of business during the
restricted period to the employees or directors of Northam pursuant to its
share incentive schemes;
it has not in the restriction period made any distribution to Northam
ordinary shareholders (other than for dividend distributions in the ordinary
course of business);
Northam has not in the restriction period disposed (in one or more
transactions) of the whole of the greater part of the assets or undertaking
of the Northam Group.
Opinions and recommendations of the Mvela Resources board
The SRP has granted the Mvela Resources board a dispensation from the
requirement to obtain an independent opinion advising on the fairness of the
Northam distribution to Mvela Resources members.
The Mvela Resources board has appointed One Capital Advisory (Proprietary)
Limited ("One Capital") to provide it with an independent fairness opinion
regarding the terms of the scheme.
One Capital has advised the Mvela Resources board that it is of the opinion
that the terms and conditions of the Mvela Resources scheme are fair to Mvela
Resources ordinary shareholders and this written opinion will be included in
the circular referred to in paragraph 9 below to be posted to Mvela Resources
shareholders ("the Mvela Resources circular") in due course.
Having considered the independent advice of One Capital and other relevant
factors, the Mvela Resources board is of the opinion that the terms and
conditions of the proposed transactions are fair to Mvela Resources ordinary
shareholders. Accordingly, the Mvela Resources board recommends that the
Mvela Resources ordinary shareholders vote in favour of the Mvela Resources
scheme at the scheme meeting, and that the Mvela Resources ordinary
shareholders, entitled to vote, vote in favour of the resolutions proposed at
the general meeting.
Those of the directors of Mvela Resources who hold Mvela Resources ordinary
shares and who are eligible to vote at the scheme meeting and the general
meeting, intend to vote all their Mvela Resources ordinary shares in favour
of the scheme and the resolutions proposed at the general meeting.
Opinions and recommendations of the Northam board of directors ("the Northam
board")
Certain directors of Northam, being, AK Gupta, BR van Rooyen, MJ Willcox,
MSMM Xayiya and PL Zim, currently own shares in Mvela Resources, either
directly or indirectly, and are therefore deemed to be related parties in
terms of the Listings Requirements for the purposes of the scheme.
Furthermore, Northam is currently a subsidiary of Mvela Resources and is
therefore effectively controlled by Mvela Resources.
Accordingly, the scheme is classified as a related party transaction in
accordance with the Listings Requirements. Consequently, Northam ordinary
shareholder approval, excluding those related parties as mentioned above,
will be required to propose the scheme and a circular setting out details as
required by the Listings Requirements and incorporating a notice convening a
general meeting to approve the proposal of the scheme will be posted to
Northam shareholders in due course ("the Northam circular").
Paragraph 10.4 (f) of the Listings Requirements requires that the Northam
board obtain an opinion from an independent expert acceptable to the JSE
regarding the fairness of the scheme to Northam shareholders. Accordingly,
the Northam board has appointed One Capital to provide such opinion.
One Capital has advised the Northam board that it is of the opinion that the
terms and conditions of the scheme are fair to Northam ordinary shareholders
and this written opinion is included in the Northam circular.
Having considered the independent advice of One Capital and other relevant
factors, the Northam board is of the opinion that the terms and conditions of
the scheme are fair to Northam ordinary shareholders. Accordingly, the
Northam board recommends that Northam shareholders vote in favour of the
proposal of the scheme at the general meeting, details of which will be set
out in the Northam circular.
Those directors of Northam who hold Northam ordinary shares and who are
eligible to vote at the general meeting, intend to vote in favour of Northam
proposing the scheme.
Timetables
The expected salient dates and times of theNortham distribution are set out
below:
2011
Last day for receipt of proxies for the general Friday,11 March
meeting (pink), by 10:00 (see note 1 below)on
General meeting of Mvela Resources held at Monday,14 March
10:15on
Results of the general meeting released on SENS Monday,14 March
on
Results of general meeting published in the press Tuesday, 15 March
on
Expected Northam distribution finalisation date Monday, 18 April
by no later than 11:00
Expected last day to trade in Mvela Resources Thursday, 28 April
ordinary shares on the JSE Exchange in order to
participate in the Northam distribution
Expected suspension of trading of Mvela Resources Friday, 29 April
ordinary shares, "ex" the entitlement to the
Northam distribution shares from commencement of
business on
Trade in the Northam distribution shares Friday, 29 April
commences
Expected Northam distribution participation Friday, 6 May
record date, at close of business on
Expected Northam distribution implementation date Monday, 9 May
Expected date on which participating Monday, 9 May
dematerialised ordinary shareholders will have
their accounts at their participant or broker
updated with the Northam distribution shares on
Expected date on which share certificates in Monday, 9 May
respect of the Northam distribution shares will
be posted, by registered post, at the risk of the
participating certificated ordinary shareholders
concerned, to participating certificated ordinary
shareholders on (see note 2 below) on or about
Dates pertinent to the scheme and the delisting of Mvela Resources ordinary
shares:
2011
Notice of scheme meeting released on SENS on Tuesday,15 February
Notice of scheme meeting published in the Friday, 18 February
Government Gazette on
Notice of scheme meeting published in the Sunday Sunday, 20 February
Times and Rapport on
Notice of scheme meeting published in the Monday,21 February
Business Day and Die Beeld on
Last day to trade in Mvela Resources ordinary Thursday, 3 March
shares on the JSE Exchange in order to be
recorded in the Mvela Resources register on the
scheme voting record date in order to be eligible
to vote at the scheme meeting on (see note 3
below)
Scheme voting record date on which Mvela Thursday, 10 March
Resources ordinary shareholders must be recorded
in the Mvela Resources register in order to vote
at the scheme meeting, at close of business on
Last day for receipt of proxies for the scheme Friday, 11 March
meeting (green), by 10:30 on (see note 3 below)
Scheme meeting to be held at 10:30, or ten Monday, 14 March
minutes after the adjournment, postponement or
conclusion of the general meeting which precedes
the scheme meeting, whichever is the later, on
Results of the scheme meeting released on SENS on Monday, 14 March
Results of the scheme meeting published in the Tuesday, 15 March
press on
Scheme chairperson`s report lies open for Tuesday, 15 March
inspection from and including
Court hearing to sanction the scheme at 10:00 or Tuesday, 29 March
so soon thereafter as counsel may be heard on
Results of the Court hearing released on SENS on Tuesday, 29 March
Results of the Court hearing published in the Wednesday, 30 March
press on
If the scheme is sanctioned
Order of Court sanctioning the scheme lodged for Wednesday, 30 March
registration with the Registrar on
Anticipated date for Mvela Resources to receive Friday, 15 April
approval from Competition Authorities (see note 5
below) on
Expected scheme finalisation date Monday, 18 April
Finalisation date announcement to be released on Monday, 18 April
SENS on
Finalisation date announcement to be published in Tuesday, 19 April
the press on
Expected last day to trade in Mvela Resources Thursday, 28April
ordinary shares on the JSE Exchange in order to
be recorded in the Mvela Resources register on
the scheme consideration record date on (see note
7 below)
Expected suspension of listing of Mvela Resources Friday, 29 April
ordinary shares on the JSE Exchange at
commencement of trading on
Trade in the scheme consideration shares Friday, 29 April
commences
Expected scheme consideration record date, at Friday, 6 May
close of business on
Expected operative date of the scheme Monday, 9 May
Expected date on which scheme participants will Monday, 9 May
have their accounts at their participant or
broker updated with the scheme consideration
Expected date on which share certificates in
respect of the scheme consideration, and the Monday, 9 May
Northam distribution shares will be posted, by
registered post, at the risk of the scheme
participants, to scheme participants(see notes 6
and 8 below)
Expected termination of listing of Mvela Monday, 9 May
Resources ordinary shares on the JSE Exchange at
the commencement of trading on
Notes to the timetable:
All times given are local times in South Africa.
As transactions in shares on the JSE Exchange are settled in the electronic
settlement system used by Strate, settlement of trades takes place five
business days after the relevant trade has taken place. Therefore persons who
acquire Mvela Resources ordinary shares on the JSE Exchange after Thursday, 3
March 2011 will not be eligible to vote at the scheme meeting, but will,
provided the scheme becomes unconditional and they become the registered
holders of the Mvela Resources ordinary shares prior to the scheme
consideration record date (and remain the registered holders on that date),
participate in the scheme consideration.
If a form of proxy for the scheme meeting is not received by the time and
date shown above, it may be handed to the chairperson of the scheme meeting
not later than 10 minutes before the scheme meeting or adjourned scheme
meeting is due to commence.
To the extent that approval from the competition authorities is not obtained
on or before the return date and should the scheme be sanctioned, an
announcement will be made on SENS and in the press advising Mvela Resources
members of the expected scheme last day to trade, the scheme consideration
record date, the scheme finalisation date and the scheme operative date.
If certificated scheme participants surrender their documents of title
(together with the duly completed form of surrender and transfer) after the
scheme consideration record date, the share certificate in respect of the
scheme consideration and Northam distribution shares will be posted to them
by the transfer secretaries within five business days of receipt of the
documents of title and duly completed form of surrender and transfer.
All dates and times may be changed by mutual agreement between Mvela
Resources and Northam and/or may be subject to certain regulatory approvals.
Any change will be published in the South African press and released on SENS.
Mvela Resources ordinary shares may not be dematerialised or rematerialised
after Thursday, 28 April 2011.
The expected salient dates and times of the general meeting of Northam
ordinary shareholders are set out below:
2011
Northam circular posted to Northam shareholders on or Friday, 18 February
about
Last day to lodge Forms of Proxies in respect of the Thursday, 10 March
General Meeting by 10h00 on
General meeting of Northam shareholders to be held at Monday, 14 March
10h00 on
Results of general meeting released on SENS on Monday, 14March
Results of general meeting published in the press on Tuesday, 15 March
Posting of circulars
Circulars to shareholders in respect of the Northam distribution, the
Afripalm repurchase and the scheme will be posted on or about Friday, 18
February 2011and will also be available on Mvela Resources and Northam`s
website at: www.mvelares.co.zaand www.northam.co.za
8 February 2011
Johannesburg
Financial adviser and sponsor to Mvela Resources
J.P. Morgan
Financial adviser to Northam
Deutsche Bank
Sponsor to Northam
One Capital
Independent adviser to Mvela Resources and Northam
One Capital
Legal adviser to Mvela Resources
Bowman Gilfillan
Legal adviser to Northam
Werkmans
Independent reporting accountants to Mvela Resources
PricewaterhouseCoopers Inc.
Independent reporting accountants to Northam
Ernst & Young Inc.
Date: 08/02/2011 09:38:31 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,
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