Ram: I'm not sure what to make of the complete picture but it does look favorable for Rangy. Have you been able to extract enough signal from the noise? Bob
NEW JCI STRUCTURE CREATES GROUP WITH BROAD APPEAL, UNIQUE OPPORTUNITIES
Johannesburg, 6 December - The proposed consolidation of the JCI and
Randgold groups will create an international gold company with the
substance, balance and prospects to deliver superior shareholder returns, the companies involved in the merger said today.
Announcing the structure of the merged group and the terms of the deal, chief executive designate Brett Kebble said it remained the intention to have an international listing and domicile for the new company. With the necessary regulatory approvals still being awaited, however, it had been decided to proceed with the restructuring of the assets in order to start realising the significant benefits expected from consolidation.
Western Areas will acquire the entire issued share capitals of Randgold & Exploration, Randfontein Estates, Barnex and Freddev as well as all the remaining gold assets held by JCI Gold. It will then change its name to JCI Limited. In a separate transaction designed to eliminate the existing pyramid shareholding structure above Western Areas, Consolidated African Mines (CAM) is proposing to acquire the entire issued share capital of JCI Gold. Both Western Areas and CAM have received undertakings from sufficient shareholders to ensure completion of the deals.
The Western Areas transactions comprise a cash distribution of 575 cents per Western Areas share and schemes of arrangement between the other companies and their members. In terms of the schemes, members of these companies will be offered Western Areas shares in the ratios of 60.0 Randfontein, 8.0 Barnex, 15.5 Freddev and 62.5 Randgold & Exploration per 100 Western Areas shares held. Simultaneously with the implementation of the Randfontein schemes, Randfontein will distribute its 7 860 566 Western Areas shares to its members as a dividend in specie. The Randfontein ratio is inclusive of this distribution.
The London Panel on Takeovers and Mergers has ruled that upon the
implementation of the Randgold scheme, Western Areas will be required to make an equivalent offer to the minority shareholders in Randgold Resources.
To ensure that the new company holds all the gold assets, Western Areas will acquire JCI Gold's South African mineral rights, its investment in Tan Range and JCI Projects (excluding its non-gold assets) for R90 million in cash.
Following the restructuring, the new JCI will have as its principal
operating assets a 100% interest in Randfontein and a 50% stake in the
Western Areas mine. It will have substantial interests in two major
development projects, South Deep at Western Areas and, through its holding in Randgold Resources, Morila in Mali, as well as in a number of exploration projects in West Africa and other parts of the world. It will have an extensive portfolio of South African mineral and participation rights, and investments in a number of South African mining companies, including a 11.3% interest in Durban Roodepoort Deep.
With attributable gold reserves of 36 million ounces, attributable resources inclusive of reserves of 67 million ounces and an annual production of more than 1.3 million ounces, the new JCI will rank as the world's ninth largest gold producer with the sixth largest reserves.
"This first phase of the restructuring is, in fact, taking us a long way towards our grand design. It consolidates the gold assets in a single company where their strategic management will be in the hands of an experienced, entrepreneurial team. It creates a substantial gold business with a balanced portfolio of operating assets, development projects and exploration prospects. It gives the group a simple, investor-friendly structure. It will increase the free float of shares, which should enhance trading liquidity," Kebble said.
Kebble said the new JCI's focus would be set firmly on using these strengths to deliver superior shareholder returns.
"We'll build on our existing position as a leading pan-African gold company by continuing with our successful exploration and new business strategy. We'll use our capabilities to develop new, low-cost gold projects and we'll look at acquisition opportunities in those areas where we think we can add value. And we'll keep improving the efficiency and productivity of our existing operations," he said.
"In addition, we'll be exploring ways of expanding and enhancing our core business through the generation of downstream profit opportunities, for example by investing in activities which add value to gold through product manufacture and brand marketing."
The advantages to the shareholders of the companies involved, Kebble said, were self-evident. They would in effect be trading their participation in the current operations and assets of these companies - each of which had inherent limitations - for a stake in a business with a much greater critical mass and much wider horizons. |
