AIM-listed Bushveld Minerals, an integrated primary vanadium producer and energy storage solutions provider, has entered into a conditional agreement which will result in the company increasing its ownership to 100% of the Vametco vanadium mine and production facility (Vametco).
Highlights
- Bushveld has entered into a definitive agreement to acquire the 26% minority interest in Bushveld Vametco Holdings Proprietary (BVH) owned by a Black Economic Empowerment (BEE) consortium in return for, inter-alia, the issue of 232,836,255 shares in the company, representing 13% of the enlarged issued share capital.
- The Transaction:
- will result in Bushveld owning 100% of the Vametco mine and vanadium plant, and acquiring full operational, management and financial control of Vametco.
- gives the Group complete control over Vametco’s cash flows, which have previously been restricted due to minority interest.
- is immediately value accretive to Bushveld Shareholders and is expected to enhance earnings per share going forward.
- 70% of the Consideration Shares will be subject to a 6 month lock-in period.
Details of the Corporate Restructuring
The Company currently owns 74% of the issued share capital of BVH through intermediary subsidiary companies. The remaining 26% is owned by Business Venture Investments 973 Proprietary Limited (BVI 973) and Business Venture Investments No. 1833 Proprietary. Under the terms of the Transaction, BVI 973 and BVI 1833 will sell their shares in BVH in exchange for:
- The issue of the 152,069,166 of the Consideration Shares to BVI 973, representing 8.49% of the enlarged issued share capital (assuming no other issuance of shares), and 80,767,089 of the Consideration Shares to BVI 1833, representing 4.51% of the enlarged issued share capital (assuming no other issuance of shares), respectively. An aggregate total of 232,836,255 shares in the Company will be issued to the BEE consortium.
- Payment of ZAR18 million in cash to BVI 1833.
- Cession to BVI 973 of an A Class Share in Oakleaf Investments 115 (Pty) Ltd (which holds 100% of BVI 1833) which entitled it to 20% of all distribution therefrom.
- Cancellation of a loan to one of the intermediate subsidiary companies in the BEE structure of US$0.513 million.
BVI 973 is owned 25% by the Vametco Community Trust and 75% Marble Gold 208 (Pty) Limited, a wholly owned subsidiary of Jaxson 640 (Pty) Ltd (“Jaxson 640”). Jaxson 640 is owned 70% by Mr Billy Chipane, a South African entrepreneur and director of BVH, and 30% by the Peo Matlafatso Trust, a trust owned by the local Mothotlung communities.
BVI 1833 is 100% owned by Oakleaf Investments 115 (Pty) Ltd, which in turn is 100% owned by Jaxson 640.
Financial details
Bushveld Vametco Holdings reported sales of ZAR 1,972,478,766 (approx. US$105.4 million), profit before tax of ZAR 490,355,989 (~US$26.2 million) and net assets of ZAR 1,613,397,934 (~US$86.1 million) in the year ended 31 December 2022. Following completion of the Transaction, the Company will no longer account for non-controlling interests in BVH. In the year ended 31 December 2022, profits attributable to non-controlling interests in BVH were US$3.5 million.
Next Steps
The Company will work towards completing the outstanding conditions being SARB approval and the convertible loan note refinancing. Following which the Company will issue the Consideration Shares to the Vendors. Further announcements will be made as appropriate.
Craig Coltman, CEO of Bushveld Minerals, commented:
“This is an important transaction as it consolidates the ownership of this valuable vanadium producing asset under a single entity - Bushveld Minerals. As South Africa navigates its way beyond the original Black Economic Empowerment ownership requirements at asset level as set in law, we see it fit to now transfer this interest to a stake at the top level of the Company, providing see through value in a listed stock and access to Bushveld’s future growth plans across the Group. For Bushveld it allows us to consolidate the structure and take full control of the asset.”
