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ASSORE LIMITED - Assore and African Rainbow Minerals Limited Conclude Definitive Agreements

Release Date: 25/06/2015 09:00
Code(s): ASR     PDF:  
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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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