JOHANNESBURG,
Dec. 12, 2018 /CNW/ -
Atlatsa Resources Corporation ("Atlatsa" or the
"Company") (TSX: ATL; JSE: ATL) announces that it
has entered into a suite of transaction agreements dated
December 11, 2018 ("Transaction
Agreements") with, inter alia, Rustenburg Platinum Mines
Limited ("RPM"), a significant shareholder of Atlatsa and a
wholly-owned subsidiary of Anglo American Platinum Limited
("AAP"), and Atlatsa Holdings Proprietary Limited
("ATH"), Atlatsa's majority shareholder, outlining the terms
and conditions of a Composite Transaction (as defined below) to be
implemented by way of a Canadian court-approved plan of arrangement
("Plan of Arrangement") under section 288 of the Business
Corporations Act (British
Columbia) (the "Arrangement").
1. BACKGROUND
TO THE COMPOSITE TRANSACTION
On July 21, 2017, the
Company announced ("Previous Announcement") that it had
entered into an agreement with AAP outlining key terms agreed in
relation to a two-phased restructuring plan (the "Restructuring
Plan"), comprising:
- Phase 1: a care and maintenance strategy for Bokoni Mine;
and
- Phase 2: a financial restructuring plan for Atlatsa and its
subsidiaries ("Atlatsa Group") pursuant to which, inter
alia:
-
- RPM will acquire and include into its adjacent Northern Limb
mining rights, the resources specified in Atlatsa Group's
Kwanda North and Central Block
prospecting rights, for a cash consideration of R300 million
(C$28 million) ("Prospecting
Rights Purchase Consideration") ("Prospecting
Rights Disposition");
- subject to implementation of the Prospecting Rights
Disposition, RPM will capitalise and/or write-off all debt owing by
Atlatsa Group, directly or indirectly, to RPM, including any
current and further debt that may be incurred during the care and
maintenance period of Bokoni Mine until December 31, 2019 ("RPM Debt Write-Off").
As at the date of this announcement, debt owing by Atlatsa Group to
RPM which will be subject to the RPM Debt Write-Off amounted to c.
R4.6 billion (C$0.4 billion); and
- Atlatsa and RPM will retain their 51% and 49% respective
shareholdings in the Bokoni Mine joint venture.
Shareholders of the Company (the "Shareholders") are
referred to the Previous Announcement for further background
information on, and the rationale for, the Restructuring Plan.
Subject to and following completion of the Arrangement, and in
view of the costs and onerous administration of maintaining a
listing on two international exchanges, the Company intends to
apply to the applicable securities authorities to have its common
shares (the "Common Shares") delisted from the Toronto Stock
Exchange (the "TSX") and the exchange operated by the JSE
Limited (the "JSE") and to cease to be a reporting issuer in
each of the provinces of Canada in
which it is currently a reporting issuer. Furthermore, Atlatsa will
become a private company with ATH continuing to hold a controlling
interest in the Company.
In view of the above considerations, the Company is seeking to
provide its Minority Shareholders (as defined below) with a
liquidity event and an opportunity to realise value for their
Common Shares. The Company therefore intends to implement a
Composite Transaction (as defined below), which incorporates a
share repurchase from certain of the Minority Shareholders, as
further detailed below.
2. MATERIAL TERMS OF THE
COMPOSITE TRANSACTION
2.1 Components of the
Composite Transaction
Atlatsa is seeking to implement
the following inter-conditional transactions (collectively, the
"Composite Transaction") by way of a Plan of
Arrangement:
- the Prospecting Rights Disposition;
- the Buy-Back: the privatisation of Atlatsa through a compulsory
repurchase, by the Company, for cancellation of all Common Shares
held by: (a) the Company's minority shareholders, being all of the
Shareholders, excluding ATH, RPM, the trustees for the time being
of the Anooraq Community Participation Trust ("Community
Trust") and the trustees for the time being of the Bokoni
Platinum Mine ESOP Trust (collectively, the "Minority
Shareholders"), for a cash consideration of R1.00 (C$0.09) ("Share Cash-Out Consideration")
per Common Share; and (b) RPM for an aggregate nominal cash
consideration of R1.00 (C$0.09)
(collectively, the "Buy-Back");
- the Tender Option: Atlatsa will make a tender offer to purchase
for cancellation any or all of the Common Shares held by the
Community Trust in exchange for the Share Cash-Out Consideration
for each Common Share so tendered ("Tender Option");
- the RPM Debt Write-Off; and
- the ATH Debt Write-Off: RPM will write-off all debt owing by
ATH (Atlatsa's majority Shareholder) to it in exchange for ATH
remaining as Atlatsa's controlling Shareholder immediately after
the Composite Transaction ("ATH Debt Write-Off"). As at the
date of this announcement, the amount of the debt subject to the
ATH Debt Write-Off amounted to c. R528
million (C$49 million).
2.2 Tender Option
The Tender Option is being made in respect of the Community
Trust only. The Minority Shareholders and RPM will have their
Common Shares acquired pursuant to the Buy-Back. The Company wishes
to maintain a constructive relationship with the community
surrounding the Bokoni Mine and has elected to provide the
Community Trust with the option to pursue a liquidity event through
a voluntary participation in the Tender Option. The Community Trust
will have the flexibility of tendering all, some or none of its
Common Shares as part of the Tender Option, which Common Shares so
tendered are to be acquired by the Company and immediately
cancelled. The Tender Option is not conditional upon any minimum
number of Common Shares being deposited by the Community Trust.
2.3 Share Cash-Out
Consideration payable in respect of the Buy-Back and the Tender
Option
The Buy-Back of the Common Shares of the Minority Shareholders
and the Tender Option are priced at R1.00 (C$0.09) per Common Share. The Share Cash-Out
Consideration represents the following premiums to the price of the
Common Shares on the TSX and JSE:
- approximately 63.6% and 56.3% to the closing price of the
Common Shares on the TSX and the JSE, respectively, on July 20, 2017, being the date immediately prior
to the date of the Previous Announcement; and
- approximately 108% and 100% to the closing price of the Common
Shares on the TSX and the JSE, respectively, on December 11, 2018, being the date
immediately prior to the date of this announcement.
3. REQUIRED SHAREHOLDER
APPROVALS
The resolution required to be passed by the Shareholders in
respect of the Arrangement ("Arrangement Resolution") must
be passed by not less than:
- three-quarters (¾) of the votes cast on the Arrangement
Resolution by or on behalf of the Shareholders present in person or
represented by proxy at the meeting of Shareholders; and
- a simple majority of the votes cast on the Arrangement
Resolution by or on behalf of the Minority Shareholders present in
person or represented by proxy at the meeting of Shareholders,
(collectively, the "Required Shareholder Approvals").
4. CONDITIONS TO EFFECTIVENESS
OF THE ARRANGEMENT
The effectiveness of the Arrangement will be conditional upon
the fulfilment, satisfaction or waiver (to the extent permitted by
the Plan of Arrangement) of, inter alia, the following
conditions:
- to the extent required, the exchange control authorities of the
South African Reserve Bank shall have granted approval for the
transactions contemplated in the Plan of Arrangement, either
unconditionally or subject to such conditions as Atlatsa confirms
to RPM in writing to be acceptable to Atlatsa;
- the Required Shareholder Approvals being obtained;
- the Supreme Court of British
Columbia shall have granted the final order, and in the
event of an appeal or application for leave to appeal, final
determination shall have been made by the applicable appellate
court;
- the satisfaction or waiver of each of the conditions precedent
in the Transaction Agreements (save for any condition requiring
that the Arrangement become unconditional), including in
particular, the approval and consent by the Department of Mineral
Resources of South Africa in terms
of sections 11 and 102 of the South African Mineral and Petroleum
Resources Development Act, No. 28 of 2002; and
- other conditions to effectiveness typical for a transaction of
this nature.
5. SPECIAL COMMITTEE FORMAL
VALUATION AND FAIRNESS OPINION
A committee comprising of independent non-executive directors of
the Company (the "Special Committee") was established to
consider the Arrangement and, if thought advisable, to recommend to
the board of directors of Atlatsa ("Board") the approval of
the Arrangement.
The Special Committee retained Duff & Phelps Canada Limited
("Financial Advisor") to prepare a formal valuation and
fairness opinion ("Formal Valuation and Fairness Opinion")
in connection with the Arrangement. Subject to the qualifications
and assumptions contained in the Formal Valuation and Fairness
Opinion, and based upon certain representations made to it by and
on behalf of the Company, the Financial Advisor concluded that:
- the Share Cash-Out Consideration payable to the Minority
Shareholders pursuant to the Buy-Back is fair from a financial
point of view to such Minority Shareholders; and
- the Prospecting Rights Purchase Consideration payable to
the Company in connection with the Prospecting Rights Disposition
is fair from a financial point of view to the Company.
The Board, after consulting with its advisors, and after careful
consideration of, among other things, the Formal Valuation and
Fairness Opinion and the recommendation of the Special
Committee, has: (a) (with directors of the Company who have
interests in connection with the Arrangement that may present them
with actual or potential conflicts of interest in connection with
the Arrangement ("Conflicted Directors") abstaining)
determined that the Arrangement is in the best interests of the
Company and is fair to the Shareholders; and (b) recommends (with
Conflicted Directors abstaining) that the Shareholders vote
IN FAVOUR OF the Arrangement Resolution. A copy of the
Formal Valuation and Fairness Opinion will be included in the
circular to be mailed to Shareholders in relation to the
Arrangement ("Circular").
6. SHAREHOLDER SUPPORT FOR THE
COMPOSITE TRANSACTION
Holders of approximately 89.6% of the Common Shares have entered
into voting support agreements with Atlatsa, pursuant to which they
have agreed to vote (or procure that their intermediary or broker
votes) all of their Common Shares in favour of the Arrangement
Resolution.
7. FURTHER INFORMATION
Further details regarding the Arrangement, the mailing of the
Circular and the related salient dates and times pertaining to the
Arrangement will be published in due course. Copies of the
Circular, the Plan of Arrangement, the Transaction Agreements and
certain related documents will be made available under the
Company's profile on SEDAR at www.sedar.com.
8. ADVISORS
The Special Committee retained Duff & Phelps Canada Limited
as its Financial Advisor. One Capital Advisory Proprietary Limited
is acting as Atlatsa's exclusive corporate advisor and One Capital
Sponsor Services Proprietary Limited is acting as JSE transaction
sponsor and JSE sponsor to Atlatsa. Stikeman Elliott LLP, Cliffe
Dekker Hofmeyr Inc. and Skadden, Arps, Slate, Meagher & Flom
LLP are acting as the Company's Canadian, South African and U.S.
legal counsel, respectively. Koikanyang Inc. is acting as ATH's
legal counsel.
9. QUERIES
Joel Kesler
Chief Commercial Officer
Office: +27 10 286 1166
Email: Joel@atlatsa.com
Cautionary Note regarding Forward Looking Information
This document contains "forward-looking statements" within the
meaning of the applicable Canadian securities laws, that are based
on Atlatsa's expectations, estimates and projections as of the
dates as of which those statements are made, including statements
relating to the Arrangement, the completion and effective date of
the Arrangement, the receipt of necessary approvals, including
applicable court, shareholder, governmental entity, TSX, JSE and
regulatory and other third-party approvals and consents, the
statements made based upon the Formal Valuation and Fairness
Opinion, the perceived benefits and completion of the Arrangement,
the proposed delisting from the TSX and the JSE and the business,
financial and operational performance of the
Company. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology and can be
identified by words such as "anticipate", "estimate", "project",
"expect", "intend", "believe", "plan", "forecasts", "predicts",
"schedule", "forecast", "predict", "will", "could", "may", or their
negatives or other comparable words.
Such forward-looking statements and forward-looking information
are based, in part, on factors and assumptions that may change,
thus causing actual results to differ from those expressed by the
forward-looking statements or forward-looking information. Such
factors and assumptions include the approval of the Plan of
Arrangement by the court, shareholder, governmental entities, TSX,
JSE and regulatory and other third-party approvals and consents,
and the implementation of the terms of the Plan of Arrangement, the
agreement relating to the Prospecting Rights Disposition and
the agreement relating to the RPM Debt Write-Off and the ATH
Debt Write-Off.
Such forward-looking statements and forward-looking
information involve known and unknown risks, uncertainties and
other factors that may cause Atlatsa's actual results, performance
or achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements or forward-looking
information. Such risks and factors include, but are not limited
to, the failure to satisfy the conditions to closing of the
Arrangement, including the receipt of the required
court, shareholder, governmental entities, TSX, JSE and
other regulatory and other third-party approvals and
consents, the occurrence of any event, change or
other circumstance that could give rise to the termination of,
or failure to complete, the Arrangement, or a material adverse
effect with respect to the Company, uncertainties related to
the implementation of the Arrangement; uncertainties related to
satisfying the conditions precedent of the Arrangement; changes in
and the effect of government policies with respect to mining and
natural resource exploration, development and exploitation;
continuing availability of capital and financing; general
economic, market or business conditions; failure of plant,
equipment or processes to maintain the Bokoni Mine on care and
maintenance; labour disputes, industrial unrest and strikes;
political instability; suspension of operations and damage to
mining property as a result of community unrest and safety
incidents; insurrection or war; delays in obtaining government
approvals; and the Company's ability to satisfy the terms and
conditions of the loans and borrowings, as described under "Going
Concern" in Note 2 to the 2018 Q3 Interim Financial
Statements, which are available under the Company's
profile on SEDAR at www.sedar.com and the risk factors
set forth under "Description of Business – Risk
Factors" in the 2017 AIF.
Atlatsa advises shareholders that these cautionary remarks
expressly qualify in their entirety all forward-looking statements
and forward-looking information attributable to Atlatsa or persons
acting on its behalf. Atlatsa assumes no obligation to update
any forward-looking statements or forward-looking
information to reflect actual results, changes in assumptions
or changes in other factors affecting such statements or
information, except as required by law. Shareholders should
carefully review the cautionary notes and risk factors contained in
this document and other documents that Atlatsa files from time to
time with, or furnishes to, the Canadian securities
regulators and which are also available under the Company's
profile on SEDAR at www.sedar.com.
SOURCE Atlatsa Resources Corporation