Exxaro Resources Limited · JSE:EXX
Exxaro Resources — Merger or Acquisition (November 2016)
15 slides from Exxaro Resources's merger presentation, Nov 24, 2016
Slide 1: Unwind of Exxaro's Existing BEE Transaction, Terms of Replacement BEE Transaction
UNWIND OF EXXARO’S EXISTING BEE TRANSACTION, TERMS OF REPLACEMENT BEE TRANSACTION Investor presentation 24 November 2016
Slide 2: Important notice
Important notice • All information in this presentation has been made public • For more information, readers are referred to the SENS announcement released by Exxaro on 22 November 2016 titled, “UNWIND OF EXXARO’S EXISTING BEE TRANSACTION, TERMS OF REPLACEMENT BEE TRANSACTION AND CAUTIONARY ANNOUNCE
Slide 3: Background and introduction
Background and introduction BACKGROUND • Exxaro was established in 2006 with Main Street 333 (“MS333”) as its controlling shareholder and BEE partner ~ Currently owns 50.19% • As part of the existing BEE transaction, MS333 is subject to certain restrictions (the “BEE Restrictions”): – MS333 is to ow
Slide 4: Salient terms of the Governing Agreements
Salient terms of the Governing Agreements Key element Description 1 • 30% transaction at Exxaro group (listed) level • MS333 (direct- and indirect) shareholders will be given the opportunity to reinvest • 7 year term ~ with certain interim liquidity mechanisms which would not threaten Exxaro’s empow
Slide 5: Overview of the Replacement BEE Transaction
1 Overview of the Replacement BEE Transaction Rationale for the Replacement BEE Transaction • Exxaro is one of the largest BEE controlled Offers the potential of strategic companies in the SA mining sector 1 opportunities in terms of investments and preferential contracts • Cognisant of the regulato
Slide 6: Overview of the Replacement BEE Transaction (Cont'd)
1 Overview of the Replacement BEE Transaction (Cont’d) Key transaction steps Replacement BEE Transaction shareholding (1) Exxaro participation 1• Exxaro subscribes for 37.7% of the equity in BEE SPV for cash Re-investing MS333 2• The Reinvesting MS333 shareholders subscribe for 62.3% shareholders of
Slide 7: Overview of the Replacement BEE Transaction (Cont'd)
1 Overview of the Replacement BEE Transaction (Cont’d) Funding capital structure Proportion of % of Replacement transaction Exxaro share price @ Implementation date Funding source funding BEE Transaction R80.00 R90.00 R100.00 R105.00 R110.00 (1) ZAR’m Exxaro Facilitation 22.6% Value of a 30% 100% 8
Slide 8: Coordinated MS333 Unwind
2 Coordinated MS333 Unwind • MS333 will not be retained as the empowerment vehicle through which MS333 shareholders will reinvest in the Replacement BEE Transaction • Intended to cater for the balance of the Exxaro shares owned by MS333 post the Specific Repurchase to be fully or partially: Descript
Slide 9: Specific Repurchase
3 Specific Repurchase Rationale for the Specific Repurchase Key terms of the Specific Repurchase Reduces Replacement BEE Transaction execution risk • Repurchase quantum of ZAR3 525m 1 • Exxaro loan to be immediately settled Reduced execution risk as MS333 is more 1 Quantum post Specific Repurchase ~
Slide 10: Cash flow impact on Exxaro
Cash flow impact on Exxaro (1) CURRENT SPOT 3 635 597 3 456 418 3 277 239 2 919 2 561 (119) (477) 487 (3 038) (3 525) Gross cash Cash in Net cash Cash in Net cash Cash in Net cash Cash in Net cash Cash in Net cash Cash in Net cash out from from out (before from new from new from new from new from ne
Slide 11: Earnings impact on Exxaro
Earnings impact on Exxaro Impact on Exxaro’s shares in issue (‘m) Exxaro shares to be owned by New BEECo (‘m) 410.0 (5) (24.5) (6) 385.5 (7) 89.5 (4) 123.0 (8) 358.1 (1) 89.5 (4) (37.6) (2) 320.5 (3) 14.0 (11) 33.5 (9) 19.5 (10) Before Specific Specific After Specific New issue After Effective After
Slide 12: Facilitation cost and effective dilution
Facilitation cost and effective dilution Impact on Exxaro’s shares in issue (‘m) Effective dilution Exxaro no. of shares (‘m) BEFORE No. of shares before 358.1 Exxaro market cap 37 602m / No. of shares repurchased (37.6) (1) No. of shares 358.1m No. of shares issued 89.5 (2) Share price before ZAR10
Slide 13: Proposed plan
Proposed plan PHASE 1 PHASE 2 Detailed announcement Detailed announcement (Specific (Replacement BEE Exxaro general Repurchase) Transaction) shareholder meeting (Specific 1. Firm intention re Repurchase) Implementation 1. Detailing the agreed terms Specific Repurchase of the Replacement BEE 2. Furth
Slide 14: Way forward
Way forward Month Nov 2016 Dec 2016 Jan 2017 2016 - 2017 Week 7 14 21 28 5 12 19 26 2 9 16 23 Firm Intention Announcement re Specific Repurchase and further details on 22 Nov Replacement BEE Transaction JSE circular approval process ~ First JSE submission has already been made 7 Nov 28 Nov Posting o
Slide 15: Disclaimer
UNWIND OF EXXARO’S EXISTING BEE TRANSACTION, TERMS OF REPLACEMENT BEE TRANSACTION Disclaimer The operational and financial information on which any outlook or forecast statements are based has not been reviewed nor reported on by the external auditors. These forward- looking statements are based on
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