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Sale of Miranda’s Interest In Sesikhona Klipbrand Colliery (Pty) Limited (“Sesikhona”) and Cautionary Announcement
Miranda Mineral Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: MMH ISIN: ZAE000074019
(“Miranda” or “the Company”)
SALE OF MIRANDA’S INTEREST IN SESIKHONA KLIPBRAND COLLIERY (PTY) LIMITED
(“SESIKHONA”) AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that Miranda (“the Seller”) together with its wholly-owned subsidiary,
Miranda Coal Proprietary Limited (“Miranda Coal”) have entered into a sale agreement (“the
Agreement”) with Osho SA Coal (Pty) Limited (“Osho”) (“the Purchaser”) on 18 May 2017 for the sale
of its 73% shareholding (“the Sale Shares”) of the entire issued share capital of Sesikhona and the
claims of the Seller on loan account against Sesikhona (collectively “the Sale Equity”)(“the
Transaction”).
2. BACKGROUND AND RATIONALE FOR THE TRANSACTION
The Purchaser, the Seller, Sesikhona and Miranda(collectively “the Parties”) are currently involved in
litigation arising from the provisions of a term sheet entered into by the Parties dated 12 December
2011. The Parties have signed a consent letter (“Consent Letter”) in terms of which the Parties agreed
to stay the litigation proceedings until such time as the Agreement fails to take effect or litigation is
withdrawn and terminates if and when the Agreement takes effect.
The disposal of a non-core asset will generate cash and free up management to focus on completing
the restructuring and rebuilding process of Miranda.
3. TERMS AND CONDITIONS OF THE TRANSACTION
The Seller sells the Sale Equity to the Purchaser in two indivisible tranches.
3.1. The purchase consideration payable by the Purchaser to the Seller for the Sale Equity shall be an
amount of R5 million, to be allocated as follows:
3.1.1 the value of the Sale Claims as at the Effective Date, to the Sale Claims; and
3.1.2 the balance to the Sale Shares.
3.2 Within 7 days of the Signature Date (‘the first payment date’) the Seller shall deposit an amount
of R5 million into a Trust Account as follows:
3.2.1 Tranche 1: R2.5 million of this amount will be transferred into an account nominated by
the Seller against the transfer of 36 Sale shares in favour of the Purchaser, and transfer
of 50% of the Sale Claims;
3.2.2 Tranche 2: R2.5 million will be transferred from the Trust Account to a Section 78(2A)
Trust Account as contemplated by the Attorneys Act, 1979, in the name of the Seller, and
held until the Effective Date, upon which date it will be transferred against the transfer
of the remaining Sale Equity to the Purchaser.
3.3 All the share certificates and R 2.5 million of Tranche 2 will be held in trust until such time as
Ministerial Consent for the transfer of the mining right in terms of section 11 of the Mineral and
Petroleum Resources Development Act has been obtained.
3.4 On the Effective Date:
3.4.1 the Seller shall deliver the share certificates of the remaining Sale Shares and transfer the
remaining Sale Claims to the Purchaser by cession and delegation;
3.4.2 the Purchaser shall procure a replacement guarantee in respect of the environmental
guarantee at Sesikhona.
3.5 The Purchaser shall pay the Seller a Production Initiation Bonus of R 2.5 million three months
after the Purchaser commences the sale of coal under the Mining Right:
3.5.1 Payment shall be payable in six equal tranches over a period of six months commencing
on the day when cal mined under the mining right is sold.
3.5.2 The Seller shall be entitled to a discount of 10% on any portion of the Production
Initiation Bonus, if settled in full prior to last date prescribed for the payment thereof.
3.6 The transaction is subject to the following conditions precedent:
3.6.1 Signing of the Consent Letter on the Signature Date and delivery of proof of the passing
of the necessary resolutions authorising the entering into of the Consent Letter;
3.6.2 Within 7 days of the Signature Date, delivery of proof of the passing of the necessary
resolutions authorising the parties to enter into the Agreement;
3.6.3 Within 7 days of the Signature Date, delivery of the Sale Shares and transfer forms to the
attorneys;
3.6.4 Within 21 days of the Signature Date, the Minorities, being Supura Holdings (Pty) Ltd and
the Sesikhona Klipbrand Community Trust, the owners of the remaining 27% of the issued
share capital of Sesikhona, will have waived their pre-emptive rights in respect of the Sale
Equity in favour of the Purchaser, or have come to another arrangement with the
Purchaser in respect of their shareholding in the Company, to the Purchaser’s reasonable
satisfaction;
3.6.5 Within 21 days of the Signature Date, the Purchaser will have conducted a limited legal
due diligence and will have delivered a formal notice to the Seller confirming its intention
to complete the Transaction;
3.6.6 Obtaining Ministerial Consent in terms of Section 11 of the Mineral and Petroleum
Resources Development Act.
4. USE OF PROCEEDS
The Transaction proceeds will be used for general working capital and to finalise the financial results
of the Group, in order to apply for the lifting of the suspension of the Company’s shares on the JSE.
5. FINANCIAL INFORMATION IN RESPECT OF THE TRANSACTION
The reported net value of the coal segment assets, which includes Sesikhona , was R48.466 million as
at 28 February 2014, the last reporting period before the Company’s listing was suspended on 23
September 2014. The loss after tax attributable to the coal segment, which includes Sesikhona, was
R3.658 million for the six months ended 28 February 2014.
6. CATEGORISATION OF THE TRANSACTION
The Company is currently in discussions with the JSE regarding the categorisation of the Transaction,
given the suspension of its shares. Once the categorisation of the Transaction has been determined,
shareholders will be notified thereof.
7. CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution in dealing in the Company’s securities on the JSE until
such time as the categorisation of the Transaction is determined, and the financial information in
respect of the Transaction is released.
The cautionary announcement released on 17 April 2017 relates to another matter and remains
effective.
Sponsors:
Exchange Sponsors
25 May 2017
Johannesburg
Media and investor relations:
James Duncan
Russell and Associates
james@rair.co.za
+27 11 880 3924
+27 79 336 4010
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Date: 25/05/2017 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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