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WSL - Wescoal Holdings Limited - Sale of Blesboklaagte washing plant WESCOAL HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 2005/006913/06) JSE Share code: WSL ISIN: ZAE000069639 ("Wescoal" or "the company" or "the group") SALE OF BLESBOKLAAGTE WASHING PLANT 1 INTRODUCTION Shareholders are advised that a subsidiary of Wescoal, Wescoal Mining (Pty) Limited ("Wescoal Mining"), has entered into a Sale of Assets Agreement with Slater Coal Marketing (Pty) Limited ("Slater") ("the transaction"), subject to certain conditions precedent. The subject matter is the washing plant situated at Portion 26 of the Blesboklaagte farm in Witbank, Mpumalanga ("the Blesboklaagte plant"). 2 BACKGROUND INFORMATION Wescoal is a junior coal miner with a trading arm. The company recently entered into a comprehensive restructuring programme to restore operations to profitability and to strengthen its financial position. The coal washing operations at Blesboklaagte has been unprofitable during previous financial years and a decision was made to close the plant on 31 March 2011. 3 RATIONALE FOR THE DISPOSAL The sale of the Blesboklaagte plant is in line with Wescoal`s strategy to focus on profitable operations and to strengthen the group`s cash resources. 4 TERMS AND CONDITIONS OF THE DISPOSAL 4.1 On 12 August 2011 ("the signature date"), Wescoal entered into a Sale of Assets Agreement for the sale of the Blesboklaagte plant to Slater. 4.2 The purchase price payable for the Blesboklaagte plant is the aggregate of R 15 million plus Value Added Tax ("VAT"). 4.3 The effective date of the transaction is 25 August 2011 ("the effective date"). 4.4 The purchase price will be payable as follows: 4.4.1 R 6 million (plus VAT), in cash to Wescoal Mining on the signature date which has been received; and 4.4.2 the balance of R 9 million (plus VAT) shall be paid in three equal monthly payments of R 3 million (plus VAT) each. Each payment shall be made on the seventh day of each successive month, starting on 7 of September 2011. 4.5 In the event that the washing operations at the Blesboklaagte plant are halted within the first 12 months after the commencement of operations, or 14 months after signature date, whichever is the sooner, as a result of the existing environmental compliance issues, then Slater retains the right of ownership of the plant and Wescoal Mining will refund Slater R 7 million in compensation to recover the loss of profits and the costs of relocating the plant. The refund will be reduced on a pro-rata basis during the prescribed 12 or 14 month period. 5 CONDITIONS PRECEDENT The disposal is conditional upon Wescoal Mining restoring the Blesboklaagte plant to an operational condition. 6 UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL The unaudited pro forma financial effects set out below are provided for illustrative purposes only to provide information about how the disposal may have impacted on Wescoal`s results and financial position. Due to the nature of the unaudited pro forma financial effects, it may not give a fair presentation of the company`s results and financial position after the disposal. The unaudited pro forma financial effects are based on the audited annual financial information of Wescoal at 31 March 2011. The directors of Wescoal are responsible for the preparation of the unaudited pro forma financial effects. "Before the Pro forma % Change disposal" "After the audited disposal"
annual unaudited results for results for the year end the year 31 March end
2011 31 March 2011 Loss per share (cents) (2) (29.1) (6.90) 76.29% Headline (loss) per share (2) (26.2) (8.7) 66.63% (cents) Net asset value ("NAV") (4) 86.51 91.48 5.74% per share (cents) Net tangible asset value (4) 44.34 50.74 14.43% ("NTAV") per share (cents) Weighted average shares in 150 271 150 271 issue (`000) Shares in issue at year 157 931 157 931 end (`000) Notes: (1) The "Before the disposal" column has been extracted without adjustment, from the audited annual results of Wescoal for the year ended 31 March 2011. (2) The unaudited pro forma financial effects on the loss and headline loss per share were prepared on the basis that the disposal was completed on 1 April 2010. (3) The "After the disposal" basic loss per share and headline loss per share have been adjusted for the following: * the exclusion of the results of the Blesboklaagte plant for the year ended 31 March 2011; * the after tax profit on the sale of the Blesboklaagte plant amounting to R7.67 million; and * interest earned on the R6 million cash proceeds. (4) The unaudited pro forma financial effects on the NAV and NTAV were prepared on the basis that the disposal was completed on 31 March 2011. (5) The "After the disposal" NAV and NTAV per share have been adjusted for the following: * cash received of R6 million; * a current debtor of R9 million has been raised for the outstanding purchase consideration; and * goodwill of R2, 27 million has been impaired. 7 CATEGORISATION OF THE TRANSACTION The transaction is categorised, in terms of the JSE Limited`s Listings Requirements, as a Category 2 transaction and does not require approval by the shareholders of Wescoal. 8 FURTHER ANNOUNCEMENT Shareholders will be notified once the transaction becomes unconditional. 15 August 2011 Johannesburg Sponsor Exchange Sponsors Date: 15/08/2011 09:00:03 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, information disseminated through SENS.
