August 1, 2014
Translink Corporate Finance announces a USD52 million share transaction between duel listed Lonmin Plc (JSE: LON, LSE: LMI) and the Bapo ba Mogale community as well as a USD9.52 million cash payment to the community. Translink South Africa acted as the exclusive financial adviser for the Bapo ba Mogale Tribal Community.
In terms of the agreement:
(a) the Bapo ba Mogale (“Bapo”) community will waive their current statutory right to receive royalties from Lonmin’s operating companies Eastern Platinum Limited and Western Platinum Limited (together “Lonplats”) in exchange for:
(i) a lump sum cash royalty payment, payable by Lonplats, that will be used by the Bapo to subscribe for shares in Lonmin; and
(ii) a deferred royalty payment of USD1.9 million per annum payable by Lonplats in each of the five years following completion of the transaction, that will be used by the Bapo to pay the administrative costs of running, controlling and directing the affairs of the Bapo;
(b) Eastern Platinum Limited will acquire 100% of the shares in Bapo ba Mogale Mining Company (Proprietary) Limited (“BMC”) from the Bapo. BMC holds the Bapo’s 7.5% participation interest in the unincorporated joint venture in respect of the Pandora mine operated by Eastern Platinum Limited. This interest in the Pandora JV is BMC’s sole asset; and
(c) the Bapo will utilise the lump sum cash royalty payment and the consideration payable for 100% of the shares in BMC to subscribe for new ordinary shares in Lonmin Plc to the value of USD52 million, representing approximately 2.38% of the outstanding shares of Lonmin Plc.
The Bapo Ba Mogale Tribal Community is part of the Tswana tribal community and is based in the Northwest province of South Africa where Lonmin’s operations are located.
Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is the world’s third largest primary producer of platinum group metals with a market capitalisation of GPB1,3 billion. These metals are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery. Lonmin’s producing assets are situated in the Bushveld Complex in South Africa, where nearly 80% of known global PGM resources are found. Lonmin employs approximately 28,000 full time employees and utilise around 10,000 contractors.
The transaction would boost black economic empowerment levels in Lonmin by 2.4% and a further 0.9% through the creation of a developmental trust for the Bapo community, giving a total 3.3%.
Contact our Team Members advising in this transaction:
Translink South Africa is based in beautiful Cape Town. Our partners have executed deals in more than 9 African countries and we cover the entire sub Saharan Africa. Transactions in Africa can be challenging, and our deep local knowledge of cultural nuances and local business dynamics assists our clients to achieve a common understanding with targets and buyers. We help our clients navigate the often intricate corporate social responsibility aspects of transactions, such as Black Economic Empowerment, which are is an important consideration in Africa. South Africa is Africa’s economic powerhouse and for many of our multinational clients serve as a platform for further expansion in Africa with its massive untapped youth market and growing middle class. We have particular expertise in the Mining, Industrial, ITC, Logistics, Chemical, Pharmaceutical and Agricultural sectors.
John Blake
Managing Partner
john.blake@translinkcf.com
