TIDMBMN
RNS Number : 4771S
Bushveld Minerals Limited
02 October 2017
Bushveld Minerals Ltd
("Bushveld" or the "Company")
Publication of Circular to Approve the Demerger of Greenhills
Resources Limited and
Proposed Subdivision of each Ordinary Share
Bushveld Minerals Limited (AIM: BMN), a diversified mineral
development company with a portfolio of vanadium, tin, coal,
titanium and iron ore assets in Southern Africa, confirms that it
intends to effect a demerger of its wholly owned subsidiary,
Greenhills Resources, and its subsidiaries (the "Demerger").
If approved by shareholders, the Demerger will result in
Bushveld shareholders continuing to hold the same number of
ordinary shares in the Company as held by them on the Demerger
Record Date, and also holding an equal number of AfriTin ordinary
shares ("AfriTin Shares") to be issued by Afritin Mining Limited
("AfriTin"), which will become the holding company of the
Greenhills Group.
The Demerger is conditional on shareholder approval and the
admission of the AfriTin Shares to trading on AIM, a market
operated by the London Stock Exchange, and it is currently
anticipated that admission will occur and dealings in AfriTin
Shares will commence during November 2017.
As stated above, shareholder approval is required for the
Demerger and accordingly a circular is being posted to all
shareholders (the "Circular") today to convene a General Meeting to
be held at 18-20 Le Pollet, St Peter Port, Guernsey GY1 1WH on 20
October 2017 at 10 a.m.
The letter from the Chairman is extracted from the Circular and
set out below as part of this announcement. Shareholders should
read the whole of the Circular and not only rely on the information
provided in this announcement. The Circular gives shareholders
further information about the background to and reasons for the
proposed Demerger, including why the Board believes the proposal is
in the best interest of the Company and its shareholders. A copy of
the circular is available on the Company's website
www.bushveldminerals.com.
All terms used in this announcement are the same as set out in
the Circular, unless otherwise specified.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:
"The proposed de-merger is an important step in the execution of
our stated strategy for the Company's tin platform, Greenhills
Resources Limited. Having built a critical mass of in-situ tin
resources in South Africa and Namibia, with a near term production
profile initially focused on the flagship Namibian Uis Tin Project,
the time is opportune for Bushveld to launch a new stand-alone AIM
listed dedicated tin platform, which will be called AfriTin Mining
Limited. AfriTin, led by Anthony Viljoen, who has played a central
role in the origination and development of the Company's tin
portfolio, will be supported by a sound and experienced management
team and a high calibre board of directors. AfriTin gives our
shareholders direct interest in an AIM listed platform that is well
poised to grow into a significant producer of tin initially and
systemic growth as a consolidator of African tin assets over the
longer term. Bushveld will retain a significant shareholding in and
continue to support AfriTin as it embarks on this new journey as an
African tin champion."
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulations (EU) No. 596/2014.
Enquiries:
Bushveld Minerals Limited
Fortune Mojapelo +27 (0) 11 268 6555
info@bushveldminerals.com
SP Angel Corporate Finance (Nominated Adviser and Joint
broker)
Ewan Leggatt / Richard Morrison +44 (0) 20 3470 0470
Beaufort Securities (Joint broker)
Jon Bellis +44 (0) 20 7382 8300
Blytheweigh (Public Relations)
Tim Blythe / Camila Horsfall +44 (0) 20 7138 3204
Gabriella von llle +27 (0) 711 121 907
EXTRACTED FROM THE CIRCULAR
Letter FROM THE CHAIRMAN TO SHAREHOLDERS
Dear Shareholder
Proposed sub-division of each Ordinary Share and approval of the
demerger of Greenhills Resources Limited
1. INTRODUCTION
The Board announced today that the Company intends to effect a
demerger of its wholly owned subsidiary, Greenhills Resources, and
its subsidiaries. Further details of the Demerger are set out in
paragraph 6 of this Part 1.
If approved by Shareholders, the Demerger will result in
Shareholders continuing to hold the same number of Ordinary Shares
in the Company as held by them on the Demerger Record Date, and
also holding an equal number of AfriTin Shares to be issued by
AfriTin, which will become the holding company of the Greenhills
Group.
Shareholders attention is however drawn to the proposed
transactions resulting in the issue of further AfriTin Shares
described in paragraph 4 of this Part I and should note that as a
result of these proposed transactions the proportion of the share
capital of AfriTin which will be held by them immediately following
Admission will be less than the proportion of the share capital of
Bushveld Minerals which will be held by them on the Demerger Record
Date. The exact percentage of the total issued share capital in
AfriTin held by Bushveld Shareholders will only be determined once
the Placing has been completed.
The Demerger will be conditional upon Admission.
Shareholder approval is required for the Demerger and
accordingly a General Meeting is being convened at 18-20 Le Pollet,
St Peter Port, Guernsey GY1 1WH at 10:00 a.m. on 20 October 2017.
The Notice of General Meeting is set out at the end of this
Circular.
Shareholders should read the whole of this Circular and not just
rely on the summarised information set out in this letter. The
purpose of this Circular is to give you further information about
the background, to and reasons for, the proposed Demerger,
including why the Board believes the Demerger to be in the best
interests of the Company and of Shareholders as a whole.
2. BACKGROUND TO AND REASONS FOR THE DEMERGER
Bushveld Minerals is a diversified AIM listed mineral
development company with a portfolio of vanadium, tin, coal,
titanium and iron ore assets in Southern Africa and Madagascar. One
of its stated objectives has been to progress the tin assets to a
level where they could be placed into a stand-alone tin company by
accumulating a critical mass of in-situ deposits with a near-term
production profile.
The principal tin assets of the Bushveld Group are the Mokopane
Tin Project and the Zaaiplaat Tin Tailings Project, located in
South Africa, and its recently acquired interest in the Uis Tin
Project in Namibia.
The Directors believe that the tin assets now represent an
attractive stand-alone platform with a strong and dedicated
management team in place to deliver long-term shareholder value.
The Directors also believe that these assets represent a
significant value opportunity that is not being fully exploited
within Bushveld Minerals.
By separating them from the rest of the Bushveld Group, the
Directors believe they will be able to fully realise that value.
The de-merged entity will also be able to raise further funds to
ensure the tin assets are brought into production as quickly as
possible and will, conditional on Admission to AIM, acquire the
remaining 50.5% of Dawnmin which indirectly owns 85% of the Uis Tin
Project.
The proposed Demerger also ensures the Company's primary
vanadium platform, together with its coal and power platform,
receive increased and dedicated management time and the financial
resources to continue to grow and achieve their strategic
objectives.
Further details of the Demerger process are set out in
paragraphs 4 and 6 of this Part 1.
3. ONGOING STRATEGIES POST DEMERGER
Bushveld
Following the Demerger, Bushveld will continue to operate a
commodity-focused platform with a view to building independent
businesses in the natural resources sector. In respect of the
Bushveld Mineral's vanadium assets, the Company's vision is to
build the largest, lowest-cost vertically integrated vanadium
company that:
* has the largest high-grade primary vanadium resource base and
the largest primary vanadium production in the world;
* can target the lowest cost position on the vanadium production
cost curve, leveraging high insitu V2O5 grades, open-cast mining,
as well as access to low-cost brownfield processing infrastructure;
and
* can develop downstream operations beyond production of end-use
vanadium products to include development and deployment of vanadium
applications in industries such as the energy storage market, where
the Company intends to manufacture vanadium electrolyte and to
build large-scale vanadium based vanadium redox flow batteries.
In respect of the coal assets, the Company is seeking to secure
a power purchase agreement for a 60MW thermal coal power project as
well as tying up partnerships with financial and EPC partners ahead
of a potential spin-off of Lemur Resources Limited ("Lemur").
Following Admission, Anthony Viljoen will be the Chief Executive
Officer of AfriTin and will cease to be an executive director of
Bushveld Minerals. In view of Anthony's extensive experience in
Madagascar and in relation to Lemur in particular, he will continue
as a non-executive director of Bushveld Minerals and as Chairman of
Lemur. The Board has appointed Prince Nyati as the project head of
Lemur and he will take up the day-to-day responsibility of
developing the Lemur project.
AfriTin
The strategy of AfriTin, following Admission, is to become a
primary producer of tin concentrate and metal and through in-house
development of the tin projects (described below) as well as
consolidation, with an initial focus on Africa.
4. AFRITIN MINING LIMITED
Background
AfriTin was formed in 2017 to acquire the tin assets of Bushveld
Minerals held by the Greenhills Group, namely the Mokopane Tin
Project and Zaaiplaat Tin Tailings Project, located in South
Africa, and the recently acquired interest in the Uis Tin Project
in Namibia.
Summary of the Tin Projects
The Mokopane Tin Project is a brownfields tin project containing
18,447 tonnes of tin with an average grade of 0.12% tin (Sn) on two
adjacent deposits. It is situated on the Northern Limb of the
Bushveld Complex and consists of one prospecting right (2205 PR),
covering six farms with an area of approximately 13,422 ha. Within
the licence area, numerous targets for open-castable disseminated
tin resources have been identified, and Greenhills has explored and
drilled two of the targets, Groenfontein and Zaaiplaats, upon which
a scoping study was based and the results released in September
2014.
The scoping study incorporated a simple process design based on
closed circuit multi-stage gravity separation, followed by
small-scale flotation and electrostatic separation, and smelting to
produce a high-purity metal. The base case scenario is of a 691,000
tpa ROM operation producing 700 tpa of 99.5% tin metal from 1,380
tpa of 51.4% Sn concentrate. The required capital expenditure is
low at US$16.7 million and the economics of this project are
positive showing a pre-tax NPV of US$18.0 million and post-tax NPV
of US$10.0 million, as well as a pre-tax IRR of 49.8% and posttax
IRR of 34.6%.
The Uis Tin Project
The Uis Tin Project is one of the largest undeveloped opencast
hard rock tin deposits in the world and has a history of
significant tin mining with an estimated 70.3Mt non-JORC resource
at 0.14% Sn for a total potential resource of over 90,000 tonnes of
contained tin.
The Uis Tin Project is located in the Erongo Region of Namibia
and comprises three mining licenses, ML 134, ML 129 (B1 and C1) and
ML 133. Historic work confirmed a significant tin resource on all
three licenses, the most significant of which is the ML 134
resource estimated at 70.3Mt at 0.14% Sn for a total potential
resource of over 90,000 tonnes of contained tin.
Due diligence has confirmed large well developed pegmatite ore
body with 0.3% Sn commonly found in greisenised zones, estimated to
host approximately 20,000 tonnes of tin. Greenhills intends to
confirm a JORC compliant resource and advance feasibility studies,
while simultaneously refurbishing an old existing plant for a 10tph
pilot scale production of tin concentrate. Following due diligence
work recently completed, Greenhills has identified high grade zones
that it recommends form the basis for early production with pilot
scale production, at the existing plant which is currently being
refurbished by Erongo.
Summary of the Demerger
AfriTin and Bushveld Minerals entered into the Demerger
Agreement on 2 October 2017. In order to effect the Demerger, it is
proposed that Bushveld Minerals will dispose of 85% of the issued
share capital of Greenhills Resources to AfriTin for a
consideration equal to the Deemed Value, conditional only on the
passing of the Resolution and Admission. The consideration will be
satisfied through the issue to each Shareholder of one AfriTin
Share for each Ordinary Share held by them on the Demerger Record
Date.
In order to compensate the Company for the capitalisation of
outstanding intercompany loans made to the Greenhills Group,
Bushveld Minerals will retain 15% of the Greenhills Shares, which
on Admission will be exchanged for such number of AfriTin Shares as
is equal to 15% of the aggregate of such AfriTin Shares and the
Demerger Shares. Further details of the Demerger Agreement are set
out in Part 2.
Other issues of AfriTin Shares on Admission
Conditional on Admission, it is expected that AfriTin will also
issue AfriTin Shares as set out in the following paragraphs.
Proposed acquisition of a further interest in the Uis Tin
Project
As at the date of this Circular, Greenhills Resources owns its
interest in the Uis Tin Project through a 49.5% interest in
Dawnmin, with the remaining 50.5% (the "Naminco Interest") being
held by Naminco, or one of its wholly owned subsidiaries. It is
expected that AfriTin will acquire the Naminco Interest (and will
direct the shares comprising the Naminco Interest be transferred to
Greenhills Resources) the consideration for which will be satisfied
by the issue to Naminco of new AfriTin Shares at the Placing Price,
provided that such number of new AfriTin Shares do not represent
more than 29.9% of the Enlarged Issued Share Capital. The Dawnmin
Acquisition will be conditional upon Admission.
The number of new AfriTin Shares to be issued pursuant to the
Dawnmin Acquisition will depend upon the final agreement of the
consideration for the Naminco Interest and the Placing Price. If
Naminco's resulting interest in Afrtin is 20% or more of the
Enlarged Share Capital (which it is expected to be), Naminco will
enter into a relationship agreement with AfriTin and AfriTin's
nominated adviser whereby it agrees that all transactions and
relationships between it and AfriTin will be conducted on terms
which allow AfriTin and the Greenhills Group to carry on their
business dependently, and all such transactions and relationships
will be at arm's length and on a normal commercial basis.
Loan Notes
It is expected that the Loan Notes will be converted
automatically upon Admission into AfriTin Shares at the Conversion
Price. The Company holds GBP720,000 of the Loan Notes, which monies
are being utilised by AfriTin to fund the costs of Admission and
the associated transactions. The remaining GBP280,000 of the Loan
Notes are held by certain private investors, which monies will be
used by AfriTin for working capital purposes. The number of new
AfriTin Shares to be issued pursuant to the conversion of the Loan
Notes will depend upon the Placing Price.
Acquisition of the Bushveld Retained Interest
Conditional upon Admission, AfriTin will acquire the Bushveld
Retained Interest in consideration of the issue to the Company of
such number of new AfriTin Shares as is equal to 15% of the
aggregate of such AfriTin Shares and the Demerger Shares.
If the Company's interest in AfriTin is 20% or more of the
Enlarged Share Capital (which it is expected to be as a result of
the issue of new AfriTin Shares either received in exchange of the
Bushveld Retained Interest and arising on conversion of the Loan
Notes, each as described above), the Company will enter into a
relationship agreement with AfriTin and the AfriTin's nominated
adviser whereby it agrees that all transactions and relationships
between it and AfriTin will be conducted on terms which allow
AfriTin and the Greenhills Group to carry on their business
independently, and all such transactions and relationships will be
at arm's length and on a normal commercial basis.
The Placing
A placing of new AfriTin Shares at the Placing Price. The number
of new AfriTin Shares to be issued pursuant to the Placing will be
dependent upon the amount raised and the Placing Price.
Issue of new AfriTin Shares to directors, employees and
consultants
It is proposed that on Admission new AfriTin Shares will be
issued to directors, employees and consultants of AfriTin at the
Placing Price where such employees and consultants elect to receive
such shares in part satisfaction of their respective salaries
and/or fees.
Accordingly, Bushveld Shareholders should be aware that, as a
result of the proposed Placing and any other proposed transactions
referred to above pursuant to which AfriTin Shares are to be issued
prior to or upon Admission, the proportion of the share capital of
AfriTin which will be held by them immediately following Admission
will be less than the proportion of the share capital of Bushveld
Minerals which will be held by them on the Demerger Record Date.
The exact percentage of the total issued share capital in AfriTin
held by Bushveld Shareholders will only be determined once the
Placing has been completed.
Directors
At Admission, the board of directors of AfriTin will comprise
one executive director (being Mr Viljoen, described below) and
three non-executive directors.
The Chief Executive Officer of AfriTin will be Anthony Viljoen,
a brief biography of whom is set out below:
Anthony Viljoen, aged 40 - Chief Executive Officer
Anthony is a mining entrepreneur and founding shareholder of VM
Investment company, a principal investment company within the
African mining sector. Anthony has been involved in the development
of numerous exploration and mining projects across Africa over a
wide range of commodities and geographies. He was instrumental in
the development and listing of Lemur Resources, a Coal project in
Madagascar, on the Australian Stock Exchange and raising AUS$25
million on IPO and sat as the Chief Executive Officer of that
company. Anthony is also a founding and current executive director
of Bushveld Minerals and has completed a number of acquisitions in
the tin and vanadium markets in Africa for Bushveld Minerals. He
has a deep knowledge of the African mining and is familiar with
London markets. Anthony holds a Post-Graduate degree in finance and
began his career in investment banking in London.
Details of the other board members will be included in the
Admission Document to be published shortly prior to Admission.
Pursuant to the Demerger Agreement, Bushveld Minerals will, for
a period of two years following Admission and provided that during
that period it beneficially owns or is interested in 20% or more of
the total issued share capital of AfriTin, be entitled to appoint
one non-executive director to the board of AfriTin or to appoint a
non-director representative to attend and speak at meetings of the
AfriTin board.
Articles
The Directors consider that, in all material respects, the
AfriTin Articles provide Shareholders with the same rights, and
contain the same obligations, in respect of AfriTin as the Bushveld
Articles provide or contain in respect of the Company. A summary of
the AfriTin Articles is set out in Part 2 of this document. To
request a copy of the AfriTin Articles, Shareholders may contact
the Company Secretary, Oak Secretaries Limited at
skerrigan@oaktrustgroup.com.
Further details of AfriTin are set out in Part 2.
5. THE GREENHILLS GROUP
Greenhills has (or will on Admission have, assuming completion
of the Dawnmin Acquisition) the following wholly owned direct
subsidiaries:
* Dawnmin;
* Mokopane Tin Company (Pty) Limited, a company registered in
South Africa with company number 2010/018622/07; and
* Pamish Investments No.71 (Pty) Ltd, a company incorporated in
South Africa with company number 2011/005217/07;
Dawnmin has an 85% interest in Guinea Fowl Investments Twenty
Seven (Pty) Limited a company incorporated in Namibia with company
number 2014/0098, through which it holds the Uis Tin Project.
Mokopane Tin Company (Pty) Limited has the following
interests,:
* a 74% interest in Renetype (Pty) Limited, a company
incorporated in South Africa with company number 2009/011128/07),
through which it holds the Mokopane Tin Project; and
* a 50% interest in Jaxson 641 (Pty) Limited, a company
incorporated in South Africa with company number
2016/492636/07.
Pamish Investments No.71 (Pty) Ltd has a 74% interest in
Zaaiplaats Mining (Pty) Ltd, a company incorporated in South Africa
with company number 1908/002990/06. Zaaiplaats Mining (Pty) Ltd
holds the Zaaiplaat Tin Tailings Project.
A structure diagram showing Greenhills Resources and its
subsidiaries immediately following Admission is set out in the
Circular.
As at 28 February 2017, the Greenhills group had net assets of
GBP18,895,632 and reported sales of GBP nil and an operating loss
of GBP239,255 in the year ending 28 February 2017.
Full details of the assets and liabilities, financial position,
profits and losses and prospects of AfriTin and the rights
attaching to the AfriTin Shares will be set out in an Admission
Document.
6. DETAILS OF THE DEMERGER
The Demerger will comprise the following steps: Bushveld
Minerals and AfriTin have entered into the Demerger Agreement,
pursuant to which Bushveld Minerals has agreed to transfer 85% of
the entire issued share capital of Greenhills Resources to AfriTin
at the Deemed Value, conditional, inter alia, upon the Resolution
being passed and Admission;
Subject to the passing of the Resolution at the General Meeting
and conditional inter alia upon Admission, the share capital of
Bushveld Minerals will be amended so that each Ordinary Share will
be sub-divided into one Ordinary Share and one Redeemable
Share;
The Redeemable Shares will provide the holders of such shares
with the following rights and obligations:
* the holders of the Redeemable Shares, as a class, shall have
the right to receive any distribution (whether directly or
indirectly) of the Company's interest in Greenhills Resources (save
for the Bushveld Retained Interest), to the exclusion of any other
class of shares, but shall otherwise not be entitled to receive any
dividends or distributions;
* the Redeemable Shares will not provide the holder of such
shares with a right to receive notice of, attend or vote at general
meetings of the Company, save to the extent that the Companies Law
or the Bushveld Articles requires the holders of the Redeemable
Shares to approve a variation of the rights attaching to the
Redeemable Shares;
* the Company will be entitled to redeem all (but not some) of
the Redeemable Shares at any time for an aggregate redemption price
equal to the Deemed Value, which shall be satisfied
by the Company effecting the transfer of 85% of the Greenhills
Shares to AfriTin and procuring the issue by AfriTin of the
Demerger Shares to the holders of the Redeemable Shares in
accordance with the Demerger Agreement.
Prior to Admission, the Directors will determine the amount of
the Company's share capital which is to be allocated to the
Redeemable Shares upon the sub-division described above. The
Directors may determine the appropriate allocation in their entire
discretion, provided that the amount of share capital so allocated
to the Redeemable Shares is at least equal to the Deemed Value.
Upon Admission, the following will occur:
* the sub-division of the Company's share capital into Ordinary
Shares and Redeemable Shares (as described iabove) will become
effective;
* 85% of the issued share capital of Greenhills Resources will
be transferred by the Company to AfriTin at the Deemed Value;
* AfriTin will issue the Demerger Shares to the Bushveld
Shareholders; and
* the Company will redeem the Redeemable Shares, at an aggregate
redemption price equal to the Deemed Value, which will be deemed to
have been satisfied by the Company effecting the transfer of 85% of
the Greenhills Shares to AfriTin and procuring the issue by AfriTin
of the Demerger Shares to the holders of the Redeemable Shares in
accordance with the Demerger Agreement.
Immediately following the Demerger and Admission, each
Shareholder will hold, for each Ordinary Share held by them on the
Demerger Record Date, one Ordinary Share and one AfriTin Share. The
redemption of the Redeemable Shares will result in a reduction of
the share capital of Bushveld Minerals of an amount at least equal
to the Deemed Value, and a related indirect distribution of 85% of
Greenhills Resources to the Bushveld Shareholders.
The Demerger will also constitute a reduction of capital by
Bushveld Minerals and an indirect distribution to Bushveld
Shareholders of 85% of their indirect interest in Greenhills
Resources.
7. SETTLEMENT
Redeemable Shares
The Redeemable Shares issued in connection with the Demerger
will be issued in certificated form but the Company will not issue
any share certificates in respect of such shares. No contract notes
relating to the issue or the subsequent redemption of the
Redeemable Shares will be issued.
Demerger Shares
The Demerger Shares will be issued to Shareholders in the
following manner:
* Shareholders who hold their Ordinary Shares in uncertificated
form (that is, in CREST) will receive their AfriTin Shares in
uncertificated form and the issue of such shares will be credited
to their respective CREST accounts.
* Shareholders who hold their Ordinary Shares in certificated
form (that is, not in CREST) will receive their AfriTin Shares in
certificated form. Share certificates in respect of such shares
will be despatched to the last registered address appearing on the
register of members of the Company. All such certificates will be
sent by normal post and at the respective Shareholder's risk.
8. GENERAL MEETING
The Demerger is being conducted in accordance with the
requirements of the Companies Law. In order to comply with these
requirements, the Company is convening a General Meeting for 10:00
a.m. on 20 October 2017 to consider and, if thought fit, pass the
Resolution to grant the Company the authority to undertake the
Demerger and to sub-divide the Company's share capital.
The Resolution, if passed, will have the following effect:
* to approve the disposal of 85% of the Greenhills Shares to
AfriTin pursuant to the Demerger Agreement, conditional upon
Admission;
* to approve the disposal of the Bushveld Retained Interest to
AfriTin in exchange for the issue to the Company of such number of
new AfriTin Shares as is equal to 15% of the aggregate of such
AfriTin Shares and the Demerger Shares, conditional upon
Admission;
* to approve the sub-division of each Ordinary Share into one
Ordinary Share and one Redeemable Share;
* to define the rights and obligations attaching to the
Redeemable Shares; and
* to authorise the Directors to determine the amount of the
Company's share capital to be allocated to the Redeemable Shares,
provided that the amount of share capital so allocated is at least
equal to the Deemed Value.
The Resolution must be passed either (i) on a show of hands by
at least 75 per cent. of those Shareholders present in person or by
proxy and voting or (ii) on a poll by those Shareholders (present
in person or by proxy and voting) holding 75 per cent. or more of
the Ordinary Shares voted, in each case, at the General Meeting.
The Demerger will not proceed unless the Resolution is duly
passed.
Pursuant to Regulation 41 of the CREST Regulations, the Company
specifies that only those members registered on the Company's
register of members at the Record Date (or, if the General Meeting
is adjourned, at 10:00 a.m. on the day two days prior to the
adjourned meeting) shall be entitled to attend and vote at the
General Meeting.
9. CONDITIONS
The proposed Demerger is conditional upon the satisfaction or
waiver of the following (the "Conditions"):
* the approval of Shareholders at the General Meeting, by the
passing of the Resolution;
* the Directors being satisfied on reasonable grounds that the
Company will, immediately after the proposed Demerger, satisfy the
solvency test under the Companies Law;
* Admission becoming effective;
* the grant of any consents, authorisations or similar
clearances which are required by any government, regulatory body or
authority for completion of the Demerger, or which are in the
reasonable opinion of the Company and AfriTin necessary or
desirable for completion of the Demerger;
* no person having commenced, or threatened to commence, any
proceedings or investigation for the purposes of prohibiting or
otherwise challenging or interfering with the Demerger, and no
person having enacted or proposed any legislation which would
prohibit, materially restrict or materially delay the
implementation of the Demerger or the operations of the businesses
of the Company or AfriTin; and
* the consent of holders of Warrants, where such consent is
required pursuant to the instrument creating the Warrants held by
them (but not otherwise).
Section 303 the Companies Law provides that the board of
directors of a company may authorise a distribution to be made by a
company if it is satisfied on reasonable grounds that such company
will immediately after the distribution satisfy the solvency test
and any other requirement in its memorandum and articles.
It is expected that, subject to the approval of Shareholders at
the General Meeting and the Directors being satisfied on reasonable
grounds that the Company will satisfy the solvency test, the
proposed Demerger will occur no later than 30 November 2017.
If the Resolution is not approved by Shareholders, or if
Admission does not occur by 2 April 2018, the Demerger Agreement
will terminate and the Demerger will not occur.
There can be no guarantee that Admission will occur or that the
other conditions set out above will be satisfied, in which case,
the Demerger will not take place, and no Demerger Shares shall be
issued.
10. TAXATION
A summary of the taxation consequences of the Demerger for UK
and Guernsey resident Shareholders is set out in paragraph 7 of
Part 2 of this Circular. It should be noted that this refers to the
current system of taxation. Shareholders are advised to consult
their own professional advisers regarding their own tax
position.
11. EXISTING WARRANTS
As at the date of this document there are in issue 30,064,320
outstanding warrants to subscribe for Ordinary Shares. Pursuant to
the anti-dilution provisions in the deeds under which most of the
Warrants are constituted, the auditors of the Company are required,
on inter alia, a reduction of capital of the Company, to issue a
certificate setting out adjustments required to the number of
Ordinary Shares which may be subscribed for and/or the subscription
price, such that the holders of such Warrants are not prejudiced
and/or diluted by the reduction.
Pursuant to the anti-dilution provisions contained in the deeds
under which a small number of the Warrants are constituted, the
Demerger will oblige the Company to treat the holder of such
Warrants, upon their exercise, as if it had exercised its Warrants
immediately prior to the Demerger, such that it was a holder of the
Ordinary Shares resulting from the exercise on the Demerger Record
Date.
Accordingly the holder of such Warrants will be entitled on
exercise to be issued with new AfriTin Shares following the
Demerger.
Pursuant to the anti-dilution provisions contained in the deeds
under which approximately 1 million of the Warrants are
constituted, the Demerger will oblige the Company to procure that
AfriTin issues to the holders of such Warrants, substitute warrants
in AfriTin entitling them to subscribe for such number of AfriTin
Shares as they would have been entitled to be issued in Ordinary
Shares in the event that as at the Demerger Record Date they had
exercised their Warrants in full immediately before the Demerger
Record Date.
Holders of Warrants will be contacted separately.
12. ACTION TO BE TAKEN
Shareholders will find enclosed with this Circular a Form of
Proxy for use at the General Meeting. Whether or not Shareholders
intend to be present at the meeting, Shareholders are requested to
complete and return the Form of Proxy in accordance with the
instructions printed thereon in the envelope provided so that it
arrives at Capita Asset Services, PXS, 34 Beckenham Road,
Beckenham, Kent BR3 4TU as soon as possible and in any event so as
to be received by post or by hand (during normal business hours
only) not later than 10:00 a.m. on 18 October 2017.
Completion and return of the Form of Proxy will not prevent
Shareholders from attending and voting at the meeting should they
so wish.
CREST members who wish to appoint a proxy or proxies through the
CREST electronic appointment service may do so for the General
Meeting by using the procedures described in the CREST Manual.
CREST Personal Members or other CREST sponsored members, and those
CREST members who have appointed (a) voting service provider(s),
should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf. In
order to be valid the appropriate CREST Proxy Instruction must be
transmitted so as to be received by the Company's agent by no later
than 10.00 a.m. on 18 October 2017.
13. FURTHER INFORMATION
Your attention is drawn to the additional information set out in
Part 2 of this Circular.
14. RECOMMENDATION
The Directors consider that the proposal to be considered at the
General Meeting is in the best interests of Shareholders as a whole
and unanimously recommend that you vote in favour of the Resolution
as they intend to do in respect of their own beneficial holdings of
13,366,667 Ordinary Shares, representing 1.66 per cent. of the
existing issued ordinary share capital of the Company. If you are
in any doubt as to any aspect of the proposals referred to in this
document or as to the action you should take in respect of them,
you should seek your own advice from your stockbroker, bank
manager, solicitor, accountant or other professional adviser duly
authorised under the FSMA if you are in the United Kingdom, or
another appropriately authorised independent adviser if you are in
a territory outside the United Kingdom.
Yours sincerely
Ian Watson
Non-Executive Chairman
This information is provided by RNS
The company news service from the London Stock Exchange
END
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