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Update on disposal of non-core assets
Jubilee Platinum PLC
Registration number (4459850)
JSE share code: JBL
AIM share code: JLP
ISIN: GB0031852162
2 August 2013
Jubilee Platinum
("Jubilee" or the "Company")
SHAREHOLDER UPDATE ON THE DISPOSAL OF NON-CORE FERRO ALLOY SMELTERS
AND POWERPLANT ASSETS BY JUBILEE
Shareholders are referred to the announcements dated 28 May, 3 June
and 19 June 2013 in relation to the Sale of Shares agreement
(“Agreement”) with Global Renewal Energy Limited (“GRE”). The terms
of the agreement are such that GRE has agreed to acquire the issued
share capital of Jubilee Smelting and Refining (Pty) Ltd in
Middelburg (“JSR”), a wholly owned subsidiary of Jubilee and 70% of
the issued share capital of Power Alt (Pty) Ltd (“PowerAlt”) (the
“Assets”) for an aggregate cash consideration of US$14 million
(“Transaction”).
It was agreed that the Transaction may be executed over two tranches,
namely a disposal (“Tranche 1”) which includes the sale of 65% of the
issued share capital of JSR and 40% of the issued share capital of
PowerAlt (“the Disposal”) and an option whereby Jubilee retains an
exclusive put option for the remaining share capital held by the
Company (“the Option”). The Option was secured by Jubilee to evaluate
Jubilee’s continued exposure to the revenue generated by these non-
core assets versus the value of the put-option.
Consideration for the Disposal comprised a non-refundable deposit
payment of US$0.2 million plus an amount of US$8.9 million which was
due to be paid on or before 31 July 2013 under the extension granted
by Jubilee (the "Second Payment"). The granted extension for the
Second Payment was also subject to further payments by GRE to JSR
which included the funding of the expansion of the JSR smelter off
gas systems.
To date Jubilee has received the non-refundable deposit payment of
US$0.2 million as well as US$0.56 million (ZAR5.6 million) non-
refundable funding from GRE – in settlement of specified creditors
of JSR and PowerAlt and to fund increased production of the smelting
complex (as announced on 19 June 2013).
However, while GRE has made payments under the extension granted it
is in default of the stipulated payment terms for the Second Payment
as to date Jubilee has not received the US$8.9 million for the
Disposal from GRE which was due on 31 July 2013. Jubilee is in
discussions with both its advisors and GRE with a view to concluding
the appropriate action. GRE has reiterated its commitment to the
transaction which forms part of Jubilee’s review.
Toll Smelting Update
The Company also announces that it has successfully secured a further
toll smelting contract on the back of the continued upgrade of the
Middelburg smelter complex. The new contract is expected to commence
production on 05 August 2013.
This additional tolling contract will further contribute to the
revenue base of JSR, which is supported by the continued growth in
the revenue PowerAlt is generating from the sale of private power to
the South African public electricity supply company.
Unaudited revenue (excludes intercompany sales) generated by JSR and
PowerAlt for the six months ended 30 June 2013 increased by 48% to
ZAR34.6 million (GBP2.3 million) from ZAR23.6 million (GBP1.8
million) reported for the six months ended 31 December 2012.
Leon Coetzer, CEO of Jubilee Platinum, said:
“We are disappointed that GRE has not honoured the terms of the
Transaction. This sale of non-core assets by Jubilee is not
fundamentally linked to the Jubilee business strategy and instead is
a transaction that offered Jubilee the opportunity to liquidate its
shareholding in businesses that do not form part of Jubilee’s
platinum Mine-to-Metals strategy.
“We will review the appropriate action to take regarding the
Transaction after further discussions with GRE and our advisors
taking into account the continued growth in the businesses.
“In the interim we will continue to drive the growth in revenue from
these businesses on the back of the increased capacity.”
Contacts
Jubilee Platinum plc
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0)11 465 1913
Andrew Sarosi
Tel +44 (0) 1752 221937
JSE Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Angela Teeling-Smith/Sharon Owens
Tel +27 (0) 11 809 7500
NOMAD
finnCap Ltd
Matthew Robinson/Ben Thompson – corporate finance
Joanna Weaving – corporate broking
Tel +44 (0) 20 7220 0500
Bishopsgate Communications Ltd
Nick Rome/Anna Michniewicz
Tel +44 (0) 20 7562 3350
2 August 2013
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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