Avmin sells its call option rights to Stimela
16 January 2002
“This represented a total consideration of R746 239 200 for Avmin. The first instalment was paid on 5 November 2001 and the remainder is due on 6 May 2002.”
On 1 November 2001, Avmin announced the disposal of its entire shareholding in Iscor Limited (“Iscor”) to Stimela and the creation of a joint venture between Avmin and Stimela (“the share sale transaction”). Stimela agreed to pay Avmin an amount of R24.00 per Iscor share for its entire shareholding of 31 093 300 shares. This represented a total consideration of R746 239 200 for Avmin. The first instalment was paid on 5 November 2001 and the remainder is due on 6 May 2002.
As part of the consideration for the share sale transaction, Avmin was granted a call option (“the Option”) by Stimela to acquire between 10 per cent and 25 per cent of all the Kumba shares beneficially held by Stimela at the time of exercising the Option. In terms of the call option, the cost of the Kumba shares to Avmin was set at R20.25 per Kumba share, plus related transaction costs and interest. The Option was exercisable at anytime after the listing of Kumba until 5 November 2002.
Avmin and Stimela have concluded an agreement in terms of which Avmin will sell its rights to the Option to Stimela for a total cash consideration of R75 million (“the Option sale transaction”). Avmin will apply the proceeds from the Option sale transaction towards reducing current gearing levels.
The joint venture, formed between Avmin and Stimela to pursue iron ore opportunities, remains intact. Avmin’s deputy chairman and CEO, Rick Menell has been invited to join the board of directors of Stimela.
Financial effects for Avmin
The effects of the Option sale transaction on net profit per share and net assets per share is not considered to be material.
Kumba pre-listing statement
Copies of Kumba’s pre-listing statement , issued on 29 October 2001, will be available to Avmin shareholders at Avmin’s head office, 56 Main Street, Johannesburg, 2001.
General Manager, Investor Relations