(which is to be renamed South African Coal Mining Holdings Limited)
Registration number 1994/009012/06
Share code: YBA (current)
Share code : SAH (future)
ISIN code: ZAE000060281
(“Yomhlaba” or “the company” or “the group”)
At an extraordinary general meeting of the Yomhlaba shareholders held on 30 June 2007, shareholders passed without modification the special and ordinary resolutions required to approve and implement the restructuring of the group. The circular setting out the details of the restructuring and revised listing particulars of the company was sent to shareholders on 8 June 2007. An independent expert’s fair and reasonable opinion was given by Moores Rowland Corporate Finance (Pty) Ltd on the restructuring and competent person’s reports were prepared by SRK (South Africa) (Pty) Ltd.
All outstanding JSE conditions relating to the lifting of suspension of trade in the company’s shares have been fulfilled, which opened the way for the shares to commence trading on the Main Board of the JSE from Tuesday 31 July 2007. All conditions have now been fulfilled relating to the restructuring, although the ten for one share consolidation and the name change will only come into effect on 20 August 2007.
Following the share consolidation of ten old shares for one new share, and the change of name on 20 August, the JSE short code shall be “SAH”.
The name of the company will change to South African Coal Mining Holdings Limited (“SACMH“) on 20 August.
The name change reflects the new business activities of the group of coal mining following the acquisition of two coal mines, Ilanga and Umlabu, both of which are based in Mpumalanga. Yomhlaba now owns productive and profitable coal mines and related assets that will enable the company to return to being a productive business and form a platform on which the group can leverage future growth.
The restructuring of Yomhlaba mainly comprised:
Umlabu coal mine is situated in the magisterial district of Ermelo and Middelburg, Mpumalanga. Mining operations began in 2003. It is an opencast and underground mine with an expected life of 18 years. Total production will reach about 1.8 million tonnes per annum. A property adjacent to the coal mine has also been acquired in order to build a railway siding close to the mine to transport coal to the Richards Bay Coal Terminal.
Ilanga coal mine is on the Witbank Coal Field, situated in Middelburg, Mpumalanga. Mining operations have been taking place since 1996. It is an opencast mine with an expected life of about two years from 1 October 2006. Total production is about 0.3 million tonnes per annum.
Due to the proximity of Ilanga and Umlabu to existing power stations being re-commissioned by Eskom, management has entered into negotiations with Eskom for coal supply agreements. Management is also in the process of negotiation with various other parties for sales contracts in both the domestic and export markets.
In May 2007, an export allocation of 500,000 tonnes per annum in the Phase V expansion of the Richards Bay Coal Terminal (RBCT) was made to Yomhlaba. This gives Yomhlaba a seat on the board of RBCT. The export allocation allows Yomhlaba to become a fully fledged producer and exporter of South African coal. The RBCT Phase V extension is expected to be commissioned by mid 2009. Until that time, Yomhlaba will export through its RBCT Quattro allocation which currently totals 200,000 tonnes per annum.
Royal Bafokeng Capital (RBC) has been issued shares in Yomhlaba as part of the restructuring, giving them a controlling interest of 65%. RBC is indirectly owned 50.1% by Royal Bafokeng Holdings which in turn is wholly owned by the 300,000 plus members of the Royal Bafokeng Nation. Yomhlaba is therefore a black-owned, broad-based empowerment entity.
In order to facilitate the acquisitions, Yomhlaba negotiated with its largest shareholders and creditors a balance sheet restructuring resulting in a net asset position and no significant long term debt. The coal mine acquisitions have been partly funded by non-recourse debt.
Thabo Mokgatlha has been appointed Chairman. He is the CEO of the Royal Bafokeng Administration.
Karl Gribnitz has been appointed acting Chief Executive Officer. He has been a non-executive director of the company for the past four years and has been instrumental in the restructuring and refocusing of the group. He has a strong strategic focus on delivering wealth to shareholders.
Pieter Swanepoel has been appointed an Executive Director responsible for the operations of the new company. He has a 32-year history in the coal mining industry, 21 years with BHP Billiton and 11 years with Xstrata, most recently as divisional general manager of two collieries.
Melanie Steyn has been appointed Group Marketing Executive and is responsible for reporting to the board on the logistic management, marketing and sales of the group. She has extensive mining and resource experience from an investment banking perspective, which includes trading and marketing of coal.
The implementation of the transactions will result in the company entering an exciting new growth path, given that:
Yomhlaba will become an investment holding platform in the coal industry that owns and controls its operating mines. The board plans to leverage off these crucial factors and the reputation and skills of the main stakeholders, in order to position the group as an empowered, coal-focused, growth-oriented mining entity with an aggressive acquisition strategy. The ability to access capital and skills, while being a BEE investment company, will make Yomhlaba a partner of choice.
Karl Gribnitz, acting CEO, said:
“This is a great day for Yomhlaba and minority shareholders after many months spent negotiating the transactions resulting in this major restructuring. We are particularly proud to be partnering with Royal Bafokeng who will be the controlling shareholder in the new company providing the group with impeccable BEE credentials.
The acquisition of two profitable coal mines, access to domestic and export markets together with our strong balance sheet and motivated management team presents us with a new exciting future. The platform is ideally positioned to take advantage of consolidation opportunities in this segment of the South African coal sector.“
Andrew Jackson, Executive Director Investments, Royal Bafokeng Holdings said:
“Through Royal Bafokeng Capital, Royal Bafokeng Holdings is pleased to have established a foothold in South African domestic and export coal production through its controlling interest in Yomhlaba. This vehicle delivers a platform positioned to take advantage of the consolidation opportunities available in this segment of the coal market.
It is gratifying that our shareholding bestows upon Yomhlaba genuine, broad-based black economic empowerment status, and that this has been immediately recognised - and rewarded - with a 500 000 tonne export allocation for Yomhlaba in the Phase V expansion of the Richards Bay Coal Terminal.”
6 August 2007
Karl Gribnitz, acting CEO:
Tel 011 748 2800
Melanie Steyn, Group Marketing Executive:
Tel 011 748 2831, Cell 083 377 3671
Andrew Jackson, Executive Director Investments :
Tel 011 219 6013
Mpueleng Pooe, Executive Director Public Affairs :
Tel 011 219 6000, Cell 082 894 3801
Tel 011 447 3030
Fred Cornet:
Cell 083 307 8286
Nandile Ngubentombi:
Cell 082 825 8004
Yomhlaba, formerly Zenith Concessions Limited, was incorporated in November 1994 as a mining holding company and was listed on the JSE in the Venture Capital Market in May 1995. After a tumultuous history, the Company acquired new assets, was recapitalised and reconstituted and was re-instated on the JSE lists with effect from 14 October 2002.
The Company suspended operations in the first quarter of 2003 due to adverse market and exchange rate conditions and issued a profit warning on 31 March 2003. The Company published audited annual financial statements for both the June 2003 and June 2004 financial years which indicated that the Company was unable to continue operating as a going concern.
After restructuring, the Company changed its name to Yomhlaba and the listing moved to the AltX on 29 November 2004. The new main business of its subsidiaries was the beneficiation of coal. The subsidiaries of Yomhlaba had a contract with Ingwe to beneficiate coal on its behalf. The contract was abruptly cancelled on 28 February 2006. As a result, the Yomhlaba directors requested the suspension of the Company`s share until the business of the Yomhlaba Group was restored.
Against the background of Yomhlaba’s troubled history and having evaluated the future prospects of the Yomhlaba Group, the board decided it would be in the best interests of Yomhlaba shareholders to acquire new assets. The board consequently initiated negotiations and entered into agreements in order to restore the fortunes of the Company through the implementation of the transactions agreed to by the shareholders on 30 June 2007.
Umlabu owns a coal mine situated in the magisterial district of Ermelo and Middelburg, Mpumalanga. Mining operations commenced in February 2003 under the management of Umlabu. It is an opencast and close pit mine with an expected life of mine of 18 years. A coal processing plant, weighbridge and workshops are also located on the property. Umlabu holds a new order mining right over portions of the Sterkfontein, Vlakfontein, Mooifontein and Voorslag farms covering a total area of 1 717.36 hectares.
Ilanga owns a coal mine in the Witbank Coal Field, situated in Middelburg, Mpumalanga, some 200km east of Johannesburg. Mining operations and coal preparation have been taking place since 1996 under the management of Ilanga. It is an opencast mine with an expected life of mine of approximately two years as from the effective date of 1 October 2006. Ilanga holds an old order mining right over a portion of the Kleinfonten farm and a new order prospecting right has been accepted by the Department of Minerals and Energy (“DME“) over a portion of the Leeuwfontein farm.
The implementation of the transactions will result in the Company entering an exciting new growth path, given that:
The board plans to leverage-off these crucial factors and the reputation and skills of the main stakeholders, in order to position the Yomhlaba Group as an empowered, coal-focused, growth-orientated mining company with an aggressive acquisition strategy.
