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MTX - Metorex Limited - Announcement regarding the disposal by Metorex of its
interest in Sable Zinc Kabwe Limited
Metorex Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1934/005478/06)
Share code: MTX
ISIN code: ZAE000022745
Issuer code: MEMTX
("Metorex" or "the Company")
ANNOUNCEMENT REGARDING THE DISPOSAL BY METOREX OF ITS INTEREST IN SABLE ZINC
KABWE LIMITED ("SABLE")
1 INTRODUCTION
Metorex shareholders ("Shareholders") are referred to the joint announcement of
a firm intention by Vale S.A., through a wholly-owned subsidiary ("Vale"), to
make an offer to acquire the entire issued and to be issued ordinary share
capital of Metorex ("Vale Offer") published on the Securities Exchange News
Service ("SENS") of the JSE Limited ("JSE") on 8 April 2011 and published in the
South African press on 11 April 2011 ("Firm Intention Announcement").
In the Firm Intention Announcement Shareholders were advised of the various
conditions precedent to the completion of the Vale Offer, one of which is the
disposal by Metorex of the issued and to be issued share capital of Sable,
including all its assets and liabilities, to a third party or parties free of
any assumption or retention by Metorex, or any subsidiary of Metorex, of any
historic, present or future liability (including any liability arising under any
indemnities or warranties, other than warranties in respect of title to the
issued share capital of Sable and such other warranties as may be agreed between
Vale and Metorex) ("Sable Condition Precedent").
Metorex is pleased to announce that it has entered into an agreement
("Agreement") with a subsidiary of Glencore International plc ("Glencore") to
dispose of the entire issued share capital of Sable and any shareholder loans
owing by Sable to Metorex (collectively, "Sable Sale Equity") to Glencore,
subject to the terms and conditions outlined below ("Sable Disposal").
2 PRINCIPAL TERMS AND CONDITIONS OF THE SABLE DISPOSAL
2.1 Purchase consideration
The purchase consideration for the Sable Sale Equity will be an amount of R190
000 000 ("Base Price"), which amount may be:
* reduced for potential liabilities (if any) in respect of Sable,
identified and determined pursuant to a verification mechanism
provided for in the Agreement; and
* increased or reduced by changes in the audited net asset value of
Sable between 31 March 2011 and a date determined by reference to the date
upon which all conditions precedent to the Sable Disposal are satisfied,
provided that the Base Price may not be reduced by more than R70 000 000.
It is intended that Metorex will advance a further shareholder loan to Sable
amounting to R35 000 000 prior to the completion of the Sable Disposal. This
loan will form part of the Sable Sale Equity and will have the effect of
increasing the Base Price to R225 000 000.
2.2 Conditions precedent
The Sable Disposal is subject to the fulfilment or waiver of the following
conditions precedent by not later than -
* 17h00 on 15 July 2011, the unconditional approval of the Sable Disposal by
the Zambian Competition and Consumer Protection Commission, in terms of the
Zambian Competition and Consumer Protection Act No. 24 of 2010;
* 17h00 on 15 July 2011, the unconditional approval of the Sable Disposal by
the Zambian Ministry of Mines in terms of the Mines and Minerals
Development Act No. 7 of 2008;
* 17h00 on 12 September 2011, the unconditional approval of the Sable
Disposal by the Financial Surveillance Department of the South African
Reserve Bank;
* 17h00 on 12 September 2011, to the extent required, the receipt of any
additional regulatory, administrative and similar approvals and consents;
and
* 17h00 on 12 September 2011, all the conditions precedent of the Vale Offer
have been fulfilled, other than:
* the condition relating to the Sable Disposal as set out in
paragraph 5.3 of the Firm Intention Announcement; and
* the condition relating to the occurrence of a material adverse
effect, fact or circumstance as more fully set out in paragraph
5.7 of the Firm Intention Announcement.
3 SABLE DISTRIBUTION
If the Sable Disposal is completed, Metorex will distribute the proceeds of the
Sable Disposal, net of any taxes arising from the Sable Disposal and the
distribution thereof, to Shareholders and to the holders of options to subscribe
for Metorex shares who accept the comparable offer to be made to them by Vale,
in respect of their options which are "in the money" by reference to the Vale
Offer ("Sable Distribution").
4 CATEGORISATION OF THE SABLE DISPOSAL
The Sable Disposal is not a categorised transaction in terms of the JSE Listings
Requirements but details thereof have been provided to keep Shareholders
informed of the status of fulfilment of the conditions precedent to the Vale
Offer.
5 VALE OFFER CIRCULAR
Now that the Agreement has been entered into, the circular relating to the Vale
Offer can be completed. The circular will contain further details in respect of
the Sable Disposal and the Sable Distribution and will be posted to Shareholders
shortly after receiving final approval of the circular by the JSE and Takeover
Regulation Panel.
Shareholders are reminded that the Sable Condition Precedent relating to the
Vale Offer remains outstanding and, until all aspects of the Sable Disposal have
been finalised and the fulfilment of the condition has been verified,
Shareholders should not view the Sable Condition Precedent as having been
fulfilled.
Johannesburg
8 June 2011
Lead financial adviser and investment bank to Metorex: Standard Bank
Joint financial adviser and transaction sponsor to Metorex: One Capital
Legal adviser to Metorex: Cliffe Dekker Hofmeyr
Legal adviser to Glencore: Werksmans Inc
Date: 08/06/2011 08:00:02 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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