Acquisition of the farm Vanggatfontein 251, Mpumalanga
Wescoal Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 2005/006913/06)
Share code: WSL
(“Wescoal” or the “Company”)
ACQUISITION OF THE FARM VANGGATFONTEIN 251, MPUMALANGA
Shareholders of Wescoal (“Shareholders”) are advised that Wescoal, through its wholly-owned subsidiary, Keaton
Mining Proprietary Limited (“Keaton Mining”), has entered into two indivisible memoranda of agreement for the
purchase of immovable property (the “Agreements”) from Johan Louis Venter Testamentere Trust (“JLV
Testamentere Trust”) and Andries Schoeman Brakfontein Boerdery (Pty) Limited (“ASB Boerdery”) (collectively
the “Sellers”), in terms of which Keaton Mining will acquire the remaining extent of Portion 8 of the Farm
Vanggatfontein 251, Mpumalanga and the remaining extent of the Farm Vanggatfontein 251, Mpumalanga
respectively (collectively “Farm Vanggatfontein” or the “Properties”) (the “Acquisitions”).
The effective date of the Acquisitions is anticipated to be no later than 30 June 2019 (the “Effective Date”).
2. Overview of Farm Vanggatfontein
The Properties are approximately 14km from Delmas, Mpumalanga with the R555 highway as the South Western
boundary and some 10km from grain storage and handling facilities. They consist of a well-managed farm portion
(300 hectares), which includes grazing, drylands and 107 hectares of fixed centre pivot irrigation. The structures
include barns and storage for implements.
3. Details of the Acquisitions
3.1. Rationale for the Acquisitions
Wescoal currently owns the mineral rights of Farm Vanggatfontein and these Acquisitions will result in
Wescoal acquiring the surface rights of Farm Vanggatfontein. Wescoal does not intend to continue the
farming operations on the Farm Vanggatfontein but will utilise the Properties to expand its Vanggatfontein
colliery’ mining operations. The Acquisitions allow Wescoal access to additional mining faces for the
Vanggatfontein colliery, which enables the opportunity for improved consistency of coal qualities. This is
in line with Wescoal's stated intentions to extend and optimise its asset base and the Acquisitions form
part of the integrated development plan for the Vanggatfontein complex.
3.2. Purchase consideration
3.2.1. Keaton Mining will acquire the immovable property of the Farm Vanggatfontein from the Sellers
for a total purchase consideration of R63.25 million, including VAT, as follows:
22.214.171.124. R36.80 million payable to JLV Testamentere Trust; and
126.96.36.199. R26.45 million payable to ASB Boerdery,
(collectively the “Purchase Consideration”).
3.2.2. Keaton Mining shall furnish Odendaal & Kruger Attorneys, being the attorneys of the Sellers (the
“Attorneys”) with bank guarantees reasonably acceptable to the Attorneys for payment of the
Purchase Consideration by no later than 15 July 2019.
3.2.3. Transfer of the Farm Vanggatfontein shall be passed by the Attorneys to Keaton Mining as soon as
reasonably possible after the bank guarantees referred to in paragraph 3.2.2 have been delivered
and Keaton Mining and the Sellers have signed and provided all documents required by the
Attorneys for purposes of such registration.
3.2.4. Payment of the Purchase Consideration will be made from internal cash generated and existing
3.3. Conditions precedent
The Acquisitions are subject to Wescoal finalising the refinance of its existing credit facilities by 30 June
3.4. Value of the net assets and profits attributable to the net assets of the Acquisitions
The value of the net assets that are the subject of the Acquisitions is R63.25 million. The profits attributable
to the net assets that are the subject of the Acquisitions are not relevant as Wescoal will discontinue current
farming operations and will utilise the Properties to expand its mining activities.
4. Categorisation of the Acquisitions
The Acquisitions are classified as a Category 2 transaction in terms of JSE Listings Requirements. Accordingly, no
shareholder approval is required.
Shareholders are reminded that Wescoal is currently in a closed period until the release of its results for the
year ended 31 March 2019, which are expected to be released on or about 25 June 2019.
10 June 2019
Investment bank, corporate advisor and sponsor
Nedbank Corporate and Investment Banking
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