Expression of interest for Optimum Coal Holdings

RNS Number : 4158N

Glencore International PLC

01 September 2011

 



Baar, Switzerland                                                                                       1 September, 2011

GLENCORE ANNOUNCES EXPRESSION OF INTEREST FOR OPTIMUM COAL HOLDINGS LIMITED

Glencore International plc ("Glencore") today announces its expression of interest in acquiring  a controlling interest in Optimum Coal Holdings Limited ("Optimum", JSE:OPT), one of the largest producers of thermal coal in South Africa, through a consortium with its local Black Economic Empowerment partner, prominent South African businessman Cyril Ramaphosa.

Transaction highlights:

·      values the ordinary shares of Optimum at 34 ZAR (4.8 USD)

·      represents a 35.9% premium to the 30‑day volume weighted average Optimum share price on 16 August 2011, being the date before the date on which Optimum released its first cautionary announcement

·      maintains Optimum's Black Economic Empowerment status

·      gives Glencore access to Optimum's operations with:

o  two high quality mining assets: Optimum Collieries and Koornfontein Mines - both in the Mpumalanga coalfield

o  8 million tons of coal export entitlements from Richards Bay Coal Terminal through Optimum Coal Terminal's shareholding in RBCT[1]

·      complements Glencore's existing coal operations in South Africa with Shanduka Coal and gives Glencore access to Optimum's attractive growth projects such as the recently acquired TNC and Remhoogte projects.

Tor Peterson, director of the Coal/Coke commodity department, commented:

"Optimum's high quality, long life coal assets and significant presence at Richards Bay Coal Terminal would be an attractive addition to our existing South African coal business.  We expect strong Chinese and Indian imports and concerns surrounding nuclear generation capacity to result in sustained underlying demand for coal. This transaction would further demonstrate Glencore's ability to identify attractive opportunities, capitalise on its strong local relationships and execute complex transactions."

Further Information

For enquiries about Glencore, please contact:

Paul Smith (Investors)	Simon Buerk (Media)	Finsbury (Media)
t: [phone]	t: [phone]	Conor McClafferty
m: [phone]	m: [phone]	Dorothy Burwell
e: [e-mail]	e: [e-mail]	t: [phone]
	Charles Watenphul (Media)
	t: [phone]
	m: [phone]
	[e-mail]

About Glencore International plc

Glencore is one of the world's leading integrated producers and marketers of commodities, headquartered in Baar, Switzerland, and listed on the London and Hong Kong Stock Exchanges. Glencore has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of Metals and Minerals, Energy Products and Agricultural Products.

About Optimum

Optimum Coal is a black-owned and controlled South African mining group and is one of South Africa's largest coal mining companies with an extensive operational footprint located in the Witbank coalfield region of Mpumalanga.

Optimum Coal is a 'pure-coal play' operating in a coal based economy with exposure to the export market. The company has operations strategically located in the Witbank coalfield region of Mpumalanga benefitting from good access to rail infrastructure, rapid load-out and export facilities. The company also has high quality and extensive coal reserves and resources with a strong development pipeline.

Optimum Coal is the sixth largest producer of thermal coal in southern Africa and is a key supplier of coal to Eskom for energy generation. Optimum Coal is also South Africa's fourth largest coal exporter with a significant shareholding of the Richards Bay Coal Terminal.

Details of the Proposed Transaction

The transaction ("Proposed Transaction") will, if successfully implemented, result in a consortium ("Consortium"), comprising Piruto B.V., a wholly owned subsidiary of Glencore International AG, and Lexshell 849 Investments (Proprietary) Limited, a company wholly-owned by Mr Cyril Ramaphosa ("Lexshell"),  Glencore's local Black Economic Empowerment partner, acquiring, directly and indirectly, the entire issued ordinary share capital of Optimum other than the shares of certain shareholders who are restricted from selling. The Proposed Transaction will include a general offer to the shareholders of Optimum for cash ("Proposed Offer").

Glencore currently owns 14.1% of Optimum's issued share capital.   As part of the Proposed Transaction, the Consortium has entered into agreements and options to acquire interests in certain of the existing black economic empowerment shareholders of Optimum ("BEE Shareholders").   As such, Glencore and the Consortium, directly and indirectly have acquired, or have entered into conditional agreements and options to acquire, a total effective interest of 43.51% in the issued share capital of Optimum.

The Consortium will pursuant to the Proposed Offer seek to purchase the balance of the equity interests in Optimum, other than those shares held by certain shareholders who are restricted from selling and the BEE Shareholders.   The Proposed Offer, if made, would be for a cash consideration of R34 per Optimum share. The Proposed Offer cash consideration represents a premium of 2.7% to the closing price of Optimum shares on 31 August 2011, being the date before the date of this announcement; 26.4% to the closing price of Optimum shares on 16 August 2011, being the date before the date on which Optimum released its first cautionary announcement; 23.2% to the 30‑day volume weighted average price ("VWAP") of Optimum shares on 31 August 2011, being the date before the date of this announcement; and 35.9% to the 30‑day VWAP of Optimum shares on 16 August 2011, being the date before the date on which Optimum released its first cautionary announcement.

The Proposed Transaction will preserve Optimum's status in South Africa as a black-owned, black-controlled company

Further details of the Proposed Transaction, including the pre-conditions required to be fulfilled before the Consortium will make the Proposed Offer, are set out in the attached joint announcement which was released today by Optimum on the Securities Exchange News Service operated by the JSE Limited.

Merrill Lynch International, a subsidiary of Bank of America Corporation, is acting exclusively for Glencore in connection with the Proposed Transaction and for no one else and will not be responsible to anyone other than Glencore for providing the protections afforded to its clients or for providing advice in relation to the Proposed Transaction.

http://www.rns-pdf.londonstockexchange.com/rns/4158N_-2011-9-1.pdf

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[1] At Transnet Freight Rail and Richards Bay's design capacity of 91mtpa once the current expansion work is completed

 

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