7th Nov 2006 07:57
AQUARIUS PLATINUM LIMITEDCOMPANY ANNOUNCEMENTASX, LSE & JSE7 November 2006Aquarius purchases 3.5% of South African subsidiary from SavConAquarius Platinum Limited (ASX, LSE & JSE: AQP) announces that agreement hasbeen reached with the Savannah Consortium ("SavCon") for the acquisition by AQPof a 3.5% equity interest in Aquarius Platinum (South Africa) (Pty) Limited("AQPSA") from SavCon ("the Transaction") for a cash consideration of R342.526million (US$46.7 million). The Transaction represents a partial implementationof the final phase of the Black Economic Empowerment transaction approved byshareholders in Special General Meeting on 11 October 2004 ("the BEETransaction") and will increase AQP's equity interest in AQPSA from 50.5% to54%. The Transaction consideration will be funded from AQP's internal cashresources and will enhance value for existing AQP shareholders.BEE TRANSACTIONAQP, AQPSA and SavCon concluded the BEE Transaction during October 2004,whereby SavCon purchased a 29.5% equity interest in AQPSA for a totalconsideration of R860 million, partly by acquiring an existing equity interestin AQPSA from AQP and partly by subscribing for new equity in AQPSA. The BEETransaction enabled AQPSA to fund the development of the Everest Mine, a valueaccretive project now in production and which will significantly increaseAQPSA's production and earnings. The BEE Transaction resulted in BEE equityparticipation in AQPSA in excess of the 26% required by the South AfricanMineral and Petroleum Resources Development Act ("MPRDA") and the associatedMining Charter. In terms of the final phase of the BEE Transaction, AQP was toultimately acquire SavCon's 29.5% equity interest in AQPSA and issue 24,599,542new AQP shares to SavCon in consideration (`the Final Phase"), subject to thefulfilment of certain conditions, including conversion of AQPSA's miningrights.In anticipation of conversion by AQPSA of its old-order mining and prospectingrights, AQP and SavCon agreed, subject to mining rights conversion, the partialimplementation of the Final Phase to create a `win-win' for both AQP andSavCon. The Transaction will enable SavCon to lock in a signifcant gain,without having any adverse impact on AQPSA's new-order mining rights, onapproximately 12% of its original investment in the AQP Group with the diposalproceeds utilised to repay a substantial portion of the third-party fundingraised by SavCon for the BEE Transaction, thereby improving the long-termsustainability of the BEE Transaction. The Transaction will reduce SavCon'sequity interest in AQPSA to 26% from the 29.5% acquired in terms of the BEETransaction, however AQPSA will remain fully compliant with the BEE equityparticipation requirements of the MPRDA. AQP in turn will not issue thepro-rata number of shares that the 3.5% of AQPSA represents in terms of theFinal Phase of the BEE Transaction, namely 2,918,590 shares (3.5% / 29.5% x24,599,542 shares), and will instead use some of its cash balance asconsideration for the purchase of 3.5% of AQPSA.3.5% PURCHASE CONSIDERATIONOn 24 October 2006, AQP announced that the South African Government'sDepartment of Minerals and Energy ("DME") had converted AQPSA's mining rightsat Kroondal, Marikana and Everest. The Transaction consideration, priced onthat day, was derived using the same calculation methodology as for SavCon'sinitial effective subscription for 24,599,542 AQP shares in 2004 (assumingimplementation of the Final Phase), namely the 90 day VWAP per AQP share on theLondon Stock Exchange, converted to South African Rand. This amounts to R117.36per AQP share (or approximately UK¢â€š¤8.21 per share at the exchange rate ofR14.30 per UK¢â€š¤ on 24 October 2006), resulting in total consideration payable toSavCon of R342.526 million (R117.36 per share x 2,918,590 shares). Transactioncosts and fees of approximately US$ 1.9 million will be paid by AQP.The Transaction share price represents an approximate discount of 15% to theclosing price per AQP share on 24 October 2006.As a result of the Transaction, the number of new AQP shares to which SavConwill be entitled upon the disposal of its residual equity interest of 26% inAQPSA to AQP will be reduced proportionately by 2,918,590 shares to 21,680,952.The conditions for ultimate disposal of SavCon's 26% in AQPSA and the take-upof its AQP shares in terms of the Final Phase remain unchanged to thoseapproved in Special General Meeting in 2004.It is anticipated that the Transaction will take six weeks to complete andremains subject to : * Consent of the Minister of Minerals and Energy in terms of the MPRDA; and * Approval of the Transaction, as a partial implementation of the Final Phase, by SavCon's funders; and * Approval of the South African Reserve Bank; and * Execution of the Transaction agreements by AQP, AQPSA and SavCon. REPAYMENT OF SHAREHOLDERS LOANSIn a separate transaction effective today, AQPSA repaid R100 million ofinterest-bearing shareholder loans owing to SavCon as part of total shareholderloan repayments of approximately R343 million to all of AQPSA's shareholders.SavCon in turn will repay R100 million of its indebtedness to its funders.AQP's loan repayment of R173.137 million will be utilised to partially fund theabove mentioned Transaction. AQPSA will benefit by a reduction in interestcharges of approximately R13 million per year as a result of repaying the R100million of interest-bearing shareholder loans owing to SavCon.For further information please visit www.aquariusplatinum.com or contact:In Australia:Willi Boehm, Aquarius Platinum Corporate Services Pty Ltd+61 (0)8 9367 5211In the United Kingdom:Nick Bias - BuckBias [email protected]+ 44 (0)7887 920 530In South Africa:Stuart Murray, Aquarius Platinum (South Africa) (Pty) Ltd+27 (0)11 455 2050REGISTERED OFFICEAquarius Platinum Limited ¢â€"Clarendon House ¢â€" 2 Church Street ¢â€"Hamilton HMCXBermudaEmail: [email protected]: +61 8 9367 5211ENDAQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L