AFARAK GROUP PLC IS PLANNING TO REPURCHASE ITS ...

07:00 London, 09:00 Helsinki, 30 January 2018 - Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR)

AFARAK GROUP PLC IS PLANNING TO REPURCHASE ITS OWN SHARES THROUGH A VOLUNTARY PUBLIC TAKEOVER BID

Not for release, publication or distribution (in whole or in part) in, into or from the United States or any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.

Afarak Group Plc ("Afarak" or "Company") received on 4 December 2017 a request from Kermas Resources Limited ("Kermas"), which holds 26.90% of the Company's shares and votes, to convene an Extraordinary General Meeting.

Kermas proposed that the General Meeting oblige the Company's Board of Directors to draw up and present a plan and schedule for an organised process for the Company's delisting from the Nasdaq Helsinki Ltd ("Helsinki Stock Exchange") as soon as practicable. According to the proposal, the Company shares would only maintain a listing in the London Stock Exchange.

Kermas' proposal will be considered along with other matters in the Company's Extraordinary General Meeting on 5 February 2018.

Afarak's Board of Directors has drawn up a preliminary plan in response to Kermas' proposal. The Company's Board of Directors finds that many financial and cost reasons support delisting from the Helsinki Stock Exchange. The current dual listing is an unnecessarily expensive and resource-consuming solution relative to the Company's size and market position. Even though the Company's share is currently traded mainly on the Helsinki Stock Exchange, the London Stock Exchange is the most natural place to list a global company operating in the mining and metals sector.

If the majority of the shareholders are in favour of Kermas' proposal, the Company will, according to the preliminary plan, fulfil the shareholders' wish as follows:

Before filing an application for delisting with the Helsinki Stock Exchange, the Company will provide shareholders who do not wish to continue as the Company's shareholders in the event of a delisting the opportunity to sell their ownership by acquiring its own shares in a voluntary public takeover bid made to all of the Company's shareholders ("Takeover Bid").

The Board of Directors of the Company finds that the Takeover Bid's pricing must be based on the share's market value while taking into account the equal treatment of shareholders, regardless of whether or not the shareholder sells its shares in connection with the Takeover Bid. On the other hand, the Board of Directors of the Company sees that especially the interests of minor shareholders must be protected. The Board of Directors of the Company has consulted some of its shareholders, some of which have stated that they will not sell their ownership and some of which have reserved the right to sell their ownership in full or in part.

This proposal is supported by Kermas Resourses Limited, Atkey Ltd, Joensuun Kauppa ja Kone Oy. After this release the Company will also consult some further shareholders. Of the Company's shareholders, Kermas Resources Limited and Atkey Limited have stated that they wish to continue as the Company's shareholders even in the case that the Company's Shares are listed only on the London Stock Exchange, and they have undertaken to refrain from offering their Shares for acquisition by the Company in connection with the potential Takeover Bid. Furthermore, Joensuun Kauppa ja Kone Oy has reserved the right to sell their ownership in full or in part, at a later stage at the proposed price.

On the basis of the aforementioned goals and consulting of shareholders, the Company's Board of Directors has considered that the Company offered to acquire its shares in the Takeover Bid for a price of EUR 1.015 per share.  

Afarak's Board of Directors continues preparing the proposal to be presented to the Extraordinary General Meeting for the Takeover Bid primarily on the basis of a voluntary public Takeover Bid for the acquisition of own shares, as referred to in the Finnish Securities Markets Act, made to all shareholders of the Company. The planned Takeover Bid would be launched during the first half of the year 2018.  The funds used for the acquisition of own shares would amount to a maximum of approximately EUR 50 million according to the current estimates of the Board of Directors. The technical investigations related to the execution of the potential Takeover Bid will be continued, and other options for how to carry out the plan are also assessed simultaneously, and it is currently not certain what procedure the Company's Board of Directors will propose to the Extraordinary General Meeting.

The Company's Board of Directors emphasises that it is question of a preliminary plan which involves many uncertainties and conditions. The main conditions are:

·        The Finnish Tax Administration issues advance ruling on the matter, under which the provisions of Section 29 of the Finnish Act on Assessment Procedure on disguised dividend do not apply to the acquisition of own shares, meaning that the taxation of a shareholder accepting the Takeover Bid was carried out in Finland normally in accordance with provisions on the taxation of capital gains;

·        The Company receives funding for the acquisition of the Shares on market terms which are approved by the Board of the Company;

·        The Financial Supervisory Authority approves the prospectus drawn up by the Company with respect to the Takeover Bid in accordance with the Securities Markets Act;

·        In order to manage the financing need associated with the Takeover Bid, the Company has received a sufficient number of undertakings from the shareholders not to offer their Shares in the Company for acquisition by the Company in the Takeover Bid and they remain in force until the date on which the Company discloses the final result of the Takeover Bid.

The Board of Directors estimates that the delisting of the Share from the Helsinki Stock Exchange would be possible after the Takeover Bid in a situation in which the shareholders have an opportunity to trade their Shares in the London Stock Exchange, in the end of 2018 at the earliest. This would require that there are efforts to strengthen the trading of the Company's share by exploring different options of getting new potential shareholders through the London Stock Exchange.

AFARAK GROUP PLC
The Board of Directors

For additional information, please contact:

Afarak Group Plc

Guy Konsbruck, CEO, [e-mail]
Jean Paul Fabri, [phone], [e-mail]

Financial reports and other investor information are available on the Company's website: www.afarak.com.

Afarak Group is a specialist alloy producer focused on delivering sustainable growth with a Speciality Alloys business in southern Europe and a FerroAlloys business in South Africa. The Company is listed on NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).

Distribution:
NASDAQ Helsinki
London Stock Exchange
Main media

www.afarak.com

PR_Delisting_EN

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Source: Afarak Group via Globenewswire