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Intention to seek shareholder approval to further monetise its remaining stake in Tronox
EXXARO RESOURCES LIMITED
Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
JSE share code: EXX
ISIN: ZAE000084992
ADR code: EXXAY
(“Exxaro” or “the Company”)
Exxaro announces its intention to seek shareholder approval to further monetise its remaining
stake in Tronox Limited (“Tronox”) in order to focus on core activities
1. Introduction
On 8 March 2017, Exxaro announced its intention to monetise its Tronox stake in order to focus on its
core activities and to fund capital commitments as well as distributions to shareholders.
Subsequently, Exxaro announced that it had disposed of 22 425 000 Tronox shares in the first US
registered public offering completed on 10 October 2017 (“First Disposal”), representing
approximately 19% of Tronox’s total outstanding voting shares in issue.
The offering consisted entirely of Tronox Class A ordinary shares listed on the New York Stock
Exchange, valued at approximately US$474 million (ZAR6 525 million) based on net proceeds after
underwriters’ fees.
The First Disposal represented a Category 2 transaction in terms of the Listings Requirements as it
constituted approximately 15% of Exxaro's market capitalisation at that time.
On 13 February 2018, Exxaro declared a special dividend amounting to 1 255 cents per share
following the First Disposal of its shareholding in Tronox. The dividend amounting to ZAR4 502 million
was paid to shareholders, including treasury shares, on 5 March 2018.
Exxaro wishes to dispose of up to all of the remaining Tronox shares owned by the Company
(“Subsequent Disposal”), at such times and in such manner that it deems prudent, taking into account
prevailing market conditions and standard market related terms and discounts (provided that such
sales shall not be to related persons as defined in paragraph 10.1(b) of the Listings Requirements).
Due to the aggregation rules set out in the JSE Listings Requirements the Subsequent Disposal may
trigger a Category 1 transaction, which requires shareholders’ approval.
A Category 1 transaction refers to a transaction where the consideration exceeds 30% or more of
Exxaro’s market capitalisation or if the total consideration is not subject to any maximum. The JSE
requires transactions (other than transactions in terms of paragraph 9.1(d)) completed during the 12
months prior to the date of the latest transaction to be aggregated with the latest transaction for the
purpose of determining the categorisation to apply to the latest transaction.
Exxaro currently holds 28 729 280 shares in Tronox, representing a beneficial ownership of
approximately 24%, with an approximate value of US$476 million (ZAR 5 727 million) assuming a
Tronox Share price of US$16.57 per share. This represents a 5% discount to the Tronox Share price
as at 6 April 2018 and net of assumed transaction costs translated at an exchange rate of ZAR12.03
as at 6 April 2018, being the Last Practicable Date of the circular to shareholders.
The remaining Tronox shares which are held by Exxaro are Class B ordinary shares. Under the terms
of the Tronox Constitution, a Class B ordinary share automatically, without any further action by any
person, converts to a Class A ordinary share on a one-to-one basis when a Class B ordinary share is
transferred to a person that is not an affiliate of Exxaro.
2. Rationale for the Subsequent Disposal
Exxaro’s investment in Tronox is non-core and its Board has determined that it will explore available
alternatives to monetise its stake in Tronox in a thoughtful, efficient and staged process over time.
Exxaro and Tronox have a strong, longstanding relationship that the companies intend to maintain
through this period of transition, and Tronox has informed Exxaro that it intends to cooperate and
assist in the Subsequent Disposal.
3. Intended use of proceeds
The funds from the proposed Subsequent Disposal will be used to focus on core activities, fund
capital commitments, repay debt and make distributions to shareholders.
4. Overview of Tronox
Tronox Limited is a vertically integrated mining and inorganic chemical business. The company mines
and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments
that add brightness and durability to paints, plastics, paper, and other everyday products. Tronox
operates mines and mineral processing plants in South Africa and Australia, and pigment
manufacturing plants in the United States, the Netherlands, and Australia. Tronox is listed on the New
York Stock Exchange under the ticker symbol TROX.
5. Net assets and profits attributable to the subject of Tronox
The carrying value of the remaining Tronox investment as at 31 December 2017 was ZAR3 396
million. Exxaro's share of losses attributable to the remaining Tronox investment for the year ended
31 December 2017 were approximately ZAR1 027 million.
6. Conditions precedent
The Subsequent Disposal will be subject to shareholder approval if the total consideration, when
aggregated with the proceeds from the First Disposal, exceeds 30% of Exxaro’s market capitilisation,
in accordance with 9.11 and 9.14 of the Listings Requirements.
7. JSE categorisation
The potential Subsequent Disposal may be classified as a Category 1 transaction, in terms of the
aggregation rules the Listings Requirements (paragraphs 9.11 and 9.14 of the Listings
Requirements). Accordingly, Exxaro wishes to retain flexibility by seeking shareholder approval in
order to best execute on Exxaro’s stated strategy depending on market conditions, as deemed
appropriate by the Directors.
8. Posting of Circular and Notice of Shareholder General Meeting
Shareholders are advised that a circular is being distributed today which includes inter alia the Notice
of General meeting containing the shareholder resolutions to authorise directors to effect the
Subsequent Disposal.
Notice is hereby given to shareholders that the General Meeting of Shareholders will be held at
10h00 on Thursday, 24 May 2018 at the Exxaro Corporate Centre, Roger Dyason Road, Pretoria
West to transact business as stated in the notice of the General Meeting.
Shareholders are further advised that the Circular will be available from the date of posting, on the
Company’s website: www.exxaro.com
The salient dates and times relating to the General Meeting are set out below:
Circular posted to Exxaro Shareholders on ............................................................Wednesday, 25 April 2018
Last day to trade in order to be eligible to participate in and vote at the
General Meeting ......................................................................................Tuesday, 15 May 2018
Record date to determine Exxaro Shareholders eligible to participate in
and vote at the General Meeting ......................................................................Friday, 18 May 2018
Last day for proxy votes to be submitted..............................................................Tuesday, 22 May 2018
General Meeting of Exxaro Shareholders at 10h00 on ...................................................Thursday, 24 May 2018
Results of General Meeting released on SENS ..........................................................Thursday, 24 May 2018
Results of General Meeting published in the South African press ......................................Friday, 25 May 2018
Enquiries:
Mzila Mthenjane, Executive head: Stakeholder Affairs
Tel: + 27 12 307 7393
Mobile: +27 83 417 6375
Email: Mzila.mthenjane@exxaro.com
Pretoria
25 April 2018
Transaction Sponsor to Exxaro:
J.P. Morgan Equities South Africa Proprietary Limited
Independent Reporting Accountants for Exxaro:
PricewaterhouseCoopers Incorporated (South Africa)
Legal Adviser on SA Law:
Norton Rose Fulbright South Africa Incorporated
Legal Adviser on US Law:
Orrick, Herrington & Sutcliffe LLP
Sponsor to Exxaro:
Absa Corporate and Investment Bank, a division of Absa Bank Limited
FORWARD-LOOKING STATEMENTS
This announcement contains “forward-looking statements,” which are statements that are not historical
facts and that are based upon management’s current beliefs and expectations. These statements are
subject to uncertainty and changes in circumstances and contain words such as “believe,” “intended,”
“expect,” and “anticipate,” and include statements about expectations for future results and actions, such
as statements concerning the potential sale of Exxaro’s Tronox shares and the potential proceeds and
application of proceeds resulting from such sales, the expected start, manner or completion of the
Subsequent Disposal, the expected benefits of the any sale of Tronox shares, any projections of
earnings, revenues, synergies, accretion, margins or other financial items, any statements of intention,
expectation or belief, and any statements of assumptions underlying any of the foregoing. Any statement
in this Announcement that expresses or implies Exxaro’s intentions, beliefs, expectations or predictions
(and the assumptions underlying them) is a forward-looking statement. Forward-looking statements
involve inherent risks, uncertainties and assumptions that may be beyond Exxaro’s control. If such risks
or uncertainties materialise or such assumptions prove incorrect, actual results or actions could differ
materially from those expressed or implied by such forward-looking statements and assumptions. The
forward-looking statements contained in this announcement are made as at the date hereof, and Exxaro
expressly disclaims any obligation to update or correct any forward-looking statements made herein due
to the occurrence of events after the issuance of this announcement.
IMPORTANT ADDITIONAL INFORMATION
This announcement is for informational purposes only and does not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which
such an offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
Date: 25/04/2018 03:10:00 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.
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