Agreement to acquire an interest in Shanduka Gold
PAN AFRICAN RESOURCES PLC
(Incorporated and registered in England and Wales under Companies Act 1985 with registered number 3937466 on 25 February 2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
(“Pan African†or the “Companyâ€)
PAN AFRICAN AGREES TO ACQUIRE AN INTEREST IN SHANDUKA GOLD
1. INTRODUCTION
Pan African shareholders (“Shareholdersâ€) were previously advised through a SENS announcement, dated 9 June 2015, that following the merger between Shanduka Group Proprietary Limited and the Pembani Group Proprietary Limited (“Mergerâ€), the direct shareholding in Shanduka Gold Proprietary Limited (“Shanduka Goldâ€) is held by the following entities:
- The Mabindu Business Development Trust (“Mabinduâ€) (49.5%);
- Jadeite Limited (33.6%), an investment vehicle of the China Investment Corporation; and
- The Standard Bank of South Africa Limited (16.9%) (“Sale Sharesâ€).
Pan African has today entered into a sale of shares agreement (“Agreementâ€) in terms of which it has agreed to acquire the Sale Shares (“Acquisitionâ€). The value of the Sale Shares may be determined with reference to the Sale Share’s pro rata interest, net of liabilities, in the Pan African shares held by Shanduka Gold. This value is further augmented pursuant to a notional vendor financing arrangement attached to the Shanduka Gold shares held by Mabindu.
The Acquisition purchase consideration will be settled in cash but remains, pursuant to the Agreement, confidential and will be disclosed and reported after the closing date. The Acquisition purchase consideration was agreed at a discount to the prevailing Pan African share price and considers valuation adjustments ordinary to a transaction of this nature.
Funding for the Acquisition and related expenses shall be sourced from existing cash resources and facilities. The Acquisition will not affect the Company’s operations or its ability to continue paying dividends.
2. BACKGROUND TO AND RATIONALE FOR THE ACQUISITION
Shanduka Gold is Pan African’s primary black economic empowerment shareholder with its sole asset being a 23.8% interest in the issued share capital of Pan African. Following the Merger, Pan African engaged with the Shanduka Gold shareholders to establish a structure through which the existing relationship between the Company and Shanduka Gold may be preserved.
The Acquisition represents a unique opportunity for Pan African to enhance Shareholder value by indirectly investing in its own shares via Shanduka Gold whilst pro-actively reducing the potential risk of future Shareholder value dilution that could arise if the existing Shanduka Gold structure were to be dissolved.
3. OTHER SALIENT TERMS AND SUSPENSIVE CONDITIONS
The Agreement remains subject to termination at the Company’s election until the fulfilment or waiver, as the case may be, of the suspensive conditions to the Agreement on or before 15 April 2016.
Although Pan African is actively pursuing the successful implementation of the Acquisition, the Company emphasises that fulfilment of the Acquisition’s suspensive conditions is highly dependent upon the successful negotiation and agreement of various matters with the Shanduka Gold shareholders.
4. CATEGORISATION OF THE ACQUISITION
Pursuant to the JSE Limited Listings Requirements, the Acquisition purchase consideration represents less than 5% of the Company’s current market capitalisation and the Acquisition is therefore not classified as a categorised transaction.
23 February 2016
Corporate advisor and JSE sponsor to Pan African
One Capital
Legal advisor to Pan African
Webber Wentzel
CONTACT INFORMATION
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Facsimile: + 27 (0)11 880 1240
Registered Office
Suite 31
Second Floor
107 Cheapside
EC2V 6DN
United Kingdom
Facsimile: + 44 (0)207 796 8645
| Cobus Loots | Deon Louw |
| Pan African Resources PLC | Pan African Resources PLC |
| Chief Executive Officer | Financial Director |
| Office: + 27 (0)11 243 2900 | Office: + 27 (0)11 243 2900 |
| Phil Dexter | John Prior / Paul Gillam / James Black |
| St James's Corporate Services Limited | Numis Securities Limited |
| Company Secretary | Nominated Adviser & Joint Broker |
| Office: + 44 (0)207 796 8644 | Office: +44 (0)207 260 1000 |
| Sholto Simpson | Matthew Armitt / Ross Allister |
| One Capital | Peel Hunt LLP |
| Corporate Advisor and JSE Sponsor | Joint Broker |
| Office: + 27 (0)11 550 5009 | Office: +44 (0)020 7418 8900 |
| Julian Gwillim | Daniel Thöle |
| Aprio Strategic Communications | Bell Pottinger PR |
| Public & Investor Relations SA | Public & Investor Relations UK |
| Office: +27 (0)11 880 0037 | Office: + 44 (0)203 772 2500 |
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