Disposal of the Mining Services Division
Stefanutti Stocks Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/003767/06)
Share code: SSK ISIN: ZAE000123766
(“Stefanutti Stocks” or “the Group” or “the Company”)
DISPOSAL OF THE MINING SERVICES DIVISION
1. INTRODUCTION
Shareholders are advised that in terms of section 9 of the JSE Limited Listings Requirements
("Listings Requirements") the Company’s major subsidiary, Stefanutti Stocks Proprietary Limited,
registration number 2003/022221/07, (the “Seller”), and Akhona Mining Services Proprietary Limited,
registration number 2018/524955/07, (the “Purchaser”) have entered into a sale of business agreement
(the “Agreement”) dated 31 March 2021. In terms of the Agreement the Mining Services Division of the
Seller, comprising the Materials Handling and Tailings Management sub-divisions but excluding the
Contract Mining sub-division of the Seller, will be sold to the Purchaser on the terms and conditions set out
in the Agreement (the “Proposed Transaction” or the “Disposal”).
2. THE CONSIDERATION FOR THE PROPOSED TRANSACTION
In terms of the Agreement the Mining Services Division will be acquired by the Purchaser for R80 million
(Eighty Million Rand), provided that this amount may be adjusted (upwards or downwards) for changes to
working capital between the date of signing and the effective date of the Proposed Transaction in
accordance with the terms of the Agreement (the “Purchase Consideration”). The Purchaser will pay the
Seller the full Purchase Consideration in cash by way of electronic funds transfer of immediately available
funds on the Effective Date, subject to the terms and conditions of the Agreement (including in relation to
the working capital adjustment discussed above). Securities will not form part of the Purchase
Consideration.
3. BACKGROUND AND RATIONALE FOR THE PROPOSED TRANSACTION
As previously disclosed to shareholders, a strategic restructuring team has been appointed by the Group to
advise on and assist with the development and implementation of a detailed turnaround programme for the
Group, including the securing of requisite additional short-term funding from the Company's primary banker
and guarantee providers ("Lenders") (the "Restructuring Plan"). The Restructuring Plan also envisages
inter alia the sale of non-core assets as well as the sale of certain divisions/subsidiaries to achieve its
purpose and objectives.
The purpose of the Restructuring Plan is to put in place the optimal capital structure and access to liquidity
to position the Group for long-term growth in this dynamic environment, and the Proposed Transaction forms
part of the Restructuring Plan and is in furtherance of achieving its objectives.
4. DESCRIPTION OF BUSINESS
The Mining Services Division comprises of two sub-divisions being the (i) Materials Handling, and
(ii) Tailings Management sub-divisions of the Seller. The Materials Handling sub-division provides bulk
handling and processing services for all mining material requirements, including, coal processing, coal
disposal and recovery, coal plant and terrace activities, raw material and product handling, crushing and
screening, and stockpile dump management. The Tailings Management sub-division provides facility
design, construction and management solutions for tailings extraction and storage.
The Contract Mining sub-division, which does not form part of the Proposed Transaction, provides open-
pit mine services for bespoke client requirements, including design, planning and optimisation of mine
plans, contract mining, crushing and screening, drilling and blasting and rehabilitation closure.
5. SIGNIFICANT TERMS OF THE AGREEMENT AND CONDITIONS PRECEDENT
In terms of the Agreement the Seller gives certain warranties, undertakings and indemnities to the Purchaser
relating to Mining Services Division which are customary for transactions of this nature. The Proposed
Transaction is also subject to the fulfilment and/or waiver of conditions precedent customary for transactions
of this nature including:
• the resolutions required to approve the Proposed Transaction having been adopted by the requisite
majority of the Company's shareholders;
• the Group obtaining the requisite written consents of the Lenders for the implementation of the
Proposed Transaction;
• the board resolutions required to approve the transaction having been adopted by the board of directors
of the Group; and
• the conclusion and execution of a transitional services agreement between the Seller and Purchaser.
6. EFFECTIVE DATE
The effective date of the Agreement shall be either:
• if the date on which the conditions precedent (as set out above) to the Proposed Transaction have
been waived or fulfilled falls before the 29th day of a calendar month as the case may be, the 1st
calendar day of the immediately following calendar month; or
• if the date on which the conditions precedent to the Proposed Transaction have been waived or fulfilled
falls on or after the 29th day of a calendar month as the case may be, the 1st calendar day of the second
immediately following calendar month.
7. APPLICATION OF THE SALE PROCEEDS
The proceeds of the Proposed Transaction will be applied to the reduction of Stefanutti Stocks' current
funding facilities provided by the Lenders in accordance with the Restructuring Plan.
8. CATEGORISATION OF THE TRANSACTION
The Disposal has been categorised as a category 1 transaction in terms of the Listings Requirements and
accordingly the Disposal is required to be approved by an ordinary resolution of shareholders of the
Company.
9. DISTRIBUTION OF CIRCULAR
A circular containing the full details of the Proposed Transaction, incorporating a notice convening a
shareholders meeting, will be distributed to shareholders in due course. The salient dates and times of the
Proposed Transaction, including the date of the shareholders meeting, will also be announced on the Stock
Exchange News Service at the time of distributing the circular.
10. CAUTIONARY
In terms of paragraph 9.15 of the Listings Requirements the Company is required to issue a cautionary
announcement if all of the information required by paragraph 9.15 is not available for inclusion in this
announcement. The value of the net assets that are the subject of the Proposed Transaction and the profit
attributable to the net assets that are the subject of the Proposed Transaction are still in the process of
being prepared, as this information was not historically prepared on a separate basis for the Mining Services
Division. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s
securities until a further announcement is made regarding this information, which is expected to be included
in the circular to shareholders to approve the Proposed Transaction.
Johannesburg
1 April 2021
Sponsor: Bridge Capital Advisors Proprietary Limited
Legal Advisor: Webber Wentzel
Date: 01-04-2021 07:30:00
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