Proposed Acquisition

23rd Jun 2006 07:01

Weatherly International PLC23 June 2006 23 June 2006 Weatherly International plc ("Weatherly") Proposed Acquisition of Ongopolo Mining and Processing Limited Placing of 37,874,500 new ordinary shares at 17 pence per share Admission to trading on AIM Notice of Extraordinary General Meeting On 25 April 2006, your Board announced that Weatherly had signed a heads ofagreement to acquire a controlling interest in Ongopolo Mining and Processing ("Ongopolo") a Namibian public company which owns and operates three copper minesand a smelter ("the Proposed Transaction"). Weatherly is pleased to announce today that it has entered into definitive legalagreements which, subject inter alia to shareholder approval, will enable it tocomplete the Proposed Transaction. Ongopolo shareholders will be holding theirAnnual General Meeting on 7 July 2006 at which approval for the ProposedTransaction will be sought. The Proposed Transaction involves a subscription for new shares in Ongopolo andthe restructuring of Ongopolo's existing indebtedness. The elements of theProposed Transaction are as follows: • a US$20m (£11.2m) subscription for new shares in Ongopolo, establishing a 50% interest in the enlarged share capital of Ongopolo; • a restructuring of indebtedness of Ongopolo to the Secured Creditors amounting to N$317.2m (£29.3m) by way of a debt for equity swap, the debt being acquired at a substantial discount to its face value. As part of these arrangements, the Secured Creditors of Ongopolo have agreed to exchange their new Ongopolo shares for new Weatherly ordinary shares issued at a price of 20p per Weatherly share; • a payment of approximately US$10m (£5.6m) to Secured Creditors of Ongopolo in order to purchase outstanding Ongopolo debt (at below par value), including the acquisition of a property package containing the surface rights for the Tschudi project and to acquire an additional 6.4% of the enlarged share capital of Ongopolo; and • a court sanctioned offer of compromise to settle the claims of the ordinary creditors of Ongopolo for a payment of approximately N$120m (£11.1m) spread over 5 years. The above arrangements will result in Weatherly paying a total of approximatelyUS$30m (£16.8m) in cash and issuing 47,050,253 new ordinary shares to theSecured Creditors of Ongopolo in consideration for 97% of the enlarged sharecapital of Ongopolo with the balance being held by employees and existingshareholders of Ongopolo. In addition, Ongopolo will carry indebtedness owingto Weatherly of N$71.19m (£6.6m). The Directors consider the Proposed Transaction is fair and reasonable and inthe best interests of the Company and its shareholders as a whole. Your Board also announced today that it proposes to raise approximately £6.4million (before expenses) for the Company by means of a placing of 37,874,500million new ordinary shares at 17p per share by Libertas Capital on behalf ofthe Company. These funds, together with the £9.1m (before expenses) raised inApril and the existing cash resources of the group will provide funding for theProposed Transaction. The Proposed Acquisition is conditional, inter alia, upon the approval ofcertain of the Resolutions by the existing ordinary shareholders at the EGM tobe held at 12.00 pm on 14 July 2006. Following the completion of the Proposed Transaction, Weatherly will have315,829,346 ordinary shares in issue. The Company is also convening an Extraordinary General Meeting of the holders ofits Deferred Shares to approve the repurchase of the shares for a nominalamount. This Extraordinary General Meeting is to be convened for 1.00 pm on 14July 2006. The Company's shares will remain suspended until Wednesday 28 June 2006 when,following the completion of the consolidation and split, the restoration willtake effect from 7am. The Company's shares will then revert to a 0.5p nominalvalue and will trade with ISIN: GB00B15PVN63. Application has been made todayfor the 230,904,593 ordinary shares of 0.5p each to be admitted to trading. Pursuant to Rule 20 of the AIM Rules, copies of the Admission Document will bemade available for inspection from the date of this document until the datewhich is one month after Admission, at the offices of Morrison & Foerster MNP,7th Floor, Citipoint, One Ropemaker Street, London EC2Y 9AW. For further information please contact: Weatherly International plcJohn Norris 020 7917 2989 Libertas CapitalJonathan Flory/Stephen Pickup 020 7569 9650 First CityIan Foster 020 7436 7486 This information is provided by RNS The company news service from the London Stock Exchange

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