Pan-Af - BEE ownership restructuring

Pan African announces that it has successfully concluded restructuring agreements, replacing the current BEE equity shareholdings in the Company (held via interests in PAR Gold (Pty) Ltd. with BEE shareholdings in Emerald Panther Investments 91 (Pty) Ltd., a subsidiary of the Company (the ˘Transaction÷). SA Holdco will house all Pan AfricanĂs South African mining operations, following implementation of the Transaction. Where the previous BEE ownership structure terminates during December 2018, the new BEE structure will only terminate on 31 December 2021, which is a three-year extension of the original BEE transaction.

Following implementation of the Transaction, Pan AfricanĂs BEE ownership is calculated at 26%, comprising 21% in SA Holdco and 5% from its on-mine employee ownership schemes.

BEE shareholdings prior to the Transaction
PAR Gold, which owns 19.53% of Pan AfricanĂs issued share capital, is currently Pan AfricanĂs primary BEE investor and its shareholders are summarised as follows:
*The Mabindu Development Trust - 49.5%
*K2015200726 (Pty) Ltd. - 0.6%
*Pan African Resources Funding Company (Pty) Ltd. - 49.9%
PAR Gold is currently majority owned by BEE shareholders (50.1%) with the balance held by PARĂs wholly owned subsidiary Fund Co.

Steps to implement the Transaction
Establishment of a new BEE entity:

The Group has established a new BEE entity, Concrete Rose (Pty) Ltd. Concrete Rose has not conducted any business since incorporation and has been established for the purpose of housing the interests to be acquired in SA Holdco, as further detailed below. The provisions of the memorandum of incorporation of Concrete Rose do not frustrate or relieve the Company in any way from compliance with its obligations in terms of the JSE Ltd. Listings Requirements.

The following parties will subscribe for shares in Concrete Rose for a nominal value, as follows:
*Mabindu - 24.75%
*Pan African Resources Management Trust - 10.5%
*Pan African Resources Education Trust - 4.95%
*Alpha Investment Group (Pty) Ltd. - 9.9%

The remaining shares in Concrete Rose are held by Fund Co (49.9%).

The details pertaining to and the net assets and profits attributable to SA Holdco, Evander, Barberton Mines and Elikhulu are contained in the 2017 integrated annual report and the audited consolidated annual financial statements of Pan African for the financial year ended 30 June 2017 available at In the year ended 30 June 2017, the entities that are the subject of the transaction produced profit after tax of approximately ˙18.6 million and as at 30 June 2017 these entities had gross assets of approximately ˙263.8 million.

PAR Gold shareholding post the Transaction
PAR Gold will repurchase Mabindu's 49.5% shareholding for a nominal consideration, due to the NVF currently exceeding the market value of the equity interest. Thereafter PAR Gold will issue new shares to K2015 to the extent of 50.1% for a nominal consideration. In future these new shares will enjoy full voting rights but no economic rights. Following the issue to K2015, Fund Co and K2015 will hold 49.9% and 50.1% of the issued share capital of PAR Gold, respectively.

The 50.1% interest held in PAR Gold by K2015 does not qualify for BEE ownership within the group. The 19.53% of Pan AfricanĂs issued equity held by PAR Gold is treated as treasury shares and will still be eliminated on consolidation for purposes of calculating earnings per share as was previously the case.

Conditions precedent
The conditions precedent to the Transaction are customary to transactions of this nature, including any regulatory approvals. The Transaction is likely to be implemented during January 2018.

The value pursuant to the Transaction represents a 21% interest in the mining operations of the Group. Accordingly, the Transaction is considered to be a category 2 transaction, as contemplated in the JSE Listings Requirements.

2017-12-15 11:01:54