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Assore and African Rainbow Minerals Limited Conclude Definitive Agreements
ASSORE LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1950/037394/06
Share code: ASR
ISIN: ZAE000146932
(“Assore”)
ASSORE AND AFRICAN RAINBOW MINERALS LIMITED CONCLUDE
DEFINITIVE AGREEMENTS FOR ASSORE’S ACQUISITION OF A 50%
INDIRECT INTEREST IN THE DWARSRIVIER CHROME MINE
1. INTRODUCTION
Shareholders of Assore (“Shareholders”) are referred to the
announcement released on the Stock Exchange News Service of
the JSE Limited (“JSE”) on 27 February 2015, in terms of
which Shareholders were advised that Assore and African
Rainbow Minerals Limited (“ARM”)(the “Parties”) had reached
an in-principle agreement on Assore’s acquisition of ARM’s
50% indirect interest in the Dwarsrivier Chrome Mine
(“Dwarsrivier”) (the “Transaction”) for a consideration of
ZAR450,000,000 (the “Purchase Consideration”).
Assore is pleased to advise that it has now concluded
definitive agreements in respect of the Transaction.
Dwarsrivier is presently owned and operated by Assmang
Proprietary Limited (“Assmang”), the equal joint venture
between the Parties, and mines chrome ore near Lydenburg in
the Mpumalanga province. The ore produced is sold both on
the export market and locally. Assmang will sell Dwarsrivier
to K2011105280 Proprietary Limited, a special purpose
company (“Dwarsrivier SPV”) in which Assore will, pursuant
to the completion of the Transaction, own the entire issued
share capital.
The completion of the Transaction is subject to a number of
conditions precedent (as set out in paragraph 4 below),
including the approval by the Minister of Mineral Resources.
The Transaction is deemed to be a Category 2 transaction in
terms of the Listings Requirements of the JSE.
2. RATIONALE FOR THE TRANSACTION
Assore is of the view that the long-term fundamentals for
the chrome ore market support an investment into the
commodity. Having participated in the ownership of
Dwarsrivier, through Assmang, Assore believes that the
Transaction offers it an opportunity to make such an
investment into a world-class operation, and to expand its
own chrome capacity.
3. SALIENT FEATURES OF THE TRANSACTION
a. Effective date
The Parties have agreed a retrospective effective date
of 1 July 2014.
b. Purchase consideration
Assore will pay the Purchase Consideration of
ZAR450,000,000 in cash.
To secure this payment obligation, Assore will deposit
the Purchase Consideration into an interest-bearing
escrow account ultimately payable to ARM.
Assore has also agreed to refund any investments made
in Dwarsrivier between 1 July 2014 and the completion
of the transaction, which are supported by Assore, up
to a maximum amount of ZAR800 million. In addition, any
cash profits earned by Dwarsrivier between these two
dates will be transferred to Dwarsrivier SPV as part of
the Transaction.
c. Management of Dwarsrivier
On 22 April 2015, the Competition Tribunal of South
Africa approved the implementation of the Transaction
in accordance with the Competition Act, 1998. Assmang
will continue to manage Dwarsrivier until the
Transaction is completed and have mandated a committee
comprising experienced employees of Assore and ARM in
this regard.
4. CONDITIONS PRECEDENT
The implementation of the Transaction is subject to the
fulfilment of the following conditions:
a) Dwarsrivier SPV must be registered as a vendor in terms
of the Value Added Tax Act;
b) Ministerial consent shall have been obtained for the
transfer of the Dwarsrivier mining right from Assmang to
Dwarsrivier SPV in terms of section 11 of the Minerals
and Petroleum Resources Development Act, 2002 (“Section
11 Approval”); and
c) the approval of the boards of directors of Assmang,
Assore, ARM and Dwarsrivier SPV for specific steps in
relation to the Transaction that will allow the Parties
to implement the Transaction after receipt of Section 11
Approval.
5. FINANCIAL INFORMATION
As at 30 June 2014, the value of the net assets attributable
to Dwarsrivier was ZAR511.5 million and the attributable net
profit after tax of Dwarsrivier for the year ended 30 June
2014 was ZAR68.0 million.
The financial information as set out above has not been
reviewed or reported on by Assore’s auditors.
6. CATEGORISATION
The Transaction is deemed a Category 2 transaction for
Assore in terms of the Listings Requirements of the JSE and,
as such, approval by Shareholders is not required.
Following the implementation of the Transaction, Dwarsrivier
will become a subsidiary of Assore. Accordingly, its
Memorandum of Incorporation will comply (and if not will be
amended to comply) with paragraph 10.21 of Schedule 10 of
the Listings Requirements of the JSE to the extent required.
Assore Limited
Assore House
15 Fricker Road
Illovo Boulevard
Johannesburg
25 June 2015
Contact details:
Alistair McAdam
Tel: 011 770 6800
Financial adviser to Assore
The Standard Bank of South Africa Limited
Legal adviser to Assore
Norton Rose Fulbright South Africa Inc.
Tax adviser to Assore
Webber Wentzel
Sponsor to Assore
The Standard Bank of South Africa Limited
Date: 25/06/2015 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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