ARCELORMITTAL SOUTH AFRICA LIMITED - ACL: Pro Forma Financial Effects And Withdrawal Of Cautionary Announcement.

Release Date: 20/06/2018 16:09
Code(s): ACL
 
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ACL: Pro Forma Financial Effects And Withdrawal Of Cautionary Announcement.

ArcelorMittal South Africa Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1989/002164/06)
Share Code: ACL
ISIN: ZAE000134961
(“ArcelorMittal South Africa”)

PRO FORMA FINANCIAL EFFECTS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

INTRODUCTION

Shareholders are referred to the announcement released on the Stock Exchange News Service of the JSE
Limited (“JSE”) on 28 May 2018, relating to the proposed sale of an indirect 50% interest in Macsteel
International Holdings BV to a subsidiary of Macsteel Holdings Luxembourg (“the Sale”). The pro forma
financial effects of the Sale have now been completed and the details are set out below.

FINANCIAL IMPLICATIONS AND PRO FORMA FINANCIAL EFFECTS

The table below sets out the pro forma financial effects of the Sale on, inter alia, ArcelorMittal South Africa’s
net asset value per share (NAVPS), net tangible asset value per share (NTAVPS), basic earnings per share
(EPS) and headline earnings per share (HEPS) based on the most recently published audited annual financial
statements of ArcelorMittal South Africa for the year ended 31 December 2017.

The pro forma financial effects have been prepared using accounting policies that comply with International
Financial Reporting Standards (“IFRS”) and that are consistent with those applied in the published audited
annual financial statements of ArcelorMittal South Africa for the year ended 31 December 2017. The financial
information has been prepared in accordance with the Listings Requirements of the JSE and in compliance
with the revised SAICA Guide on pro forma Financial Information.

The pro forma financial information is the responsibility of the ArcelorMittal South Africa board and was
prepared for illustrative purposes only and may not, because of its nature, fairly present ArcelorMittal South
Africa’s financial position, changes in equity and results of its operations or cash flows for the period then
ended. It does not purport to be indicative of what the financial results would have been, had the Sale been
implemented on a different date.

The pro forma financial effects have not been reported on by the independent reporting accountants.

                                                 Before1           Pro forma          % Change
                                                                   after the Sale
EPS (cents per share) 2                         (469)             (434)              7.5%
HEPS (cents per share) 2                        (230)             (205)              11.1%
NAVPS (cents per share) 3                        737               621                (15.7%)
NTAVPS (cents per share)3                        729               614                (15.8%)
  
                                                
Weighted average shares in issue (millions)      1,094               1,094
Shares in issue at year end (millions)           1,094               1,094


Notes:

1. The “Before” column is based on the audited annual financial statements of ArcelorMittal South Africa for
   the year ended 31 December 2017.

2. Pro forma earnings and headline earnings per share effects are based on the following principle
   assumptions:
         The Sale was effective 1 January 2017.
         The Sale consideration of $220 million is converted to ZAR at a rate of R13.45, being the closing
             rate on 14 June 2018.
         Proceeds from the Sale will be utilised to primarily strengthen the balance sheet of ArcelorMittal
             South Africa through debt reduction and funding expansion capital investment as such growth
             opportunities arise. Until such opportunities are identified, the proceeds, net of transaction cost,
             are assumed to be utilised to reduce current borrowings, which incurred interest at an average
             rate of 10.7% per annum;
         The terms of the Marketing Supply Agreement with Macsteel International Trading Holdings BV
             (registered in The Netherlands), being a condition precedent to the Sale Agreement, has not been
             finalised and is subject to its own conditions precedent. For purposes of the pro forma financial
             effects an assumption has been made of the implementation thereof with effect 1 January 2017
             using an average exchange rate for the year to 31 December 2017 of R13.32; and
             Transaction costs of R3 million.

3. Pro forma net asset and net tangible asset value per share effects are based on the following principle
   assumptions:
             The Sale was effective 31 December 2017;
             The Sale consideration of $220 million is converted to ZAR at a rate of R13.45, being the closing
             rate on 14 June 2018; and
             Transaction costs of R3 million.

4. There are no other post balance sheet events which need adjustment to the pro forma financial effects.

5. Details of the adjustments underlying the pro forma financial effects will be presented in the circular to be
   posted to shareholders.

WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

As further details of the Sale have now been released, shareholders no longer need to exercise caution when
dealing in their ArcelorMittal South Africa securities.

CIRCULAR

The Sale is a Category 1 transaction in terms of JSE Listings Requirements and therefore shareholder
approval is required. Accordingly, a circular containing full details of the Sale, including the notice of the
shareholders’ meeting will be sent to ArcelorMittal South Africa shareholders in due course.

20 June 2018
Vanderbijlpark Works

For further information please contact:
Mr Hennie Vermeulen
Group Manager: Corporate Communications
Tel: (016) 889 2352

Sponsor to ArcelorMittal South Africa
Absa Bank Limited (acting through its Corporate and Investment Banking division)




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