TIDMBMN
RNS Number : 9692T
Bushveld Minerals Limited
20 November 2023
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
20 November 2023
Bushveld Minerals Limited
("Bushveld" or the "Company")
Definitive agreement for the acquisition by Southern Point
Resources of a 50% interest in Vanchem
Further to its announcement on 11 September 2023, Bushveld
Minerals Limited (AIM: BMN), the integrated primary vanadium
producer, is pleased to announce it has entered into a definitive
agreement for the acquisition by Southern Point Resources - Fund 1
SA L.P., represented by its general partner SPR GP1 Proprietary
Limited (" SPRF "), of 50% of the issued shares of Bushveld Vanchem
(Pty) Ltd (" BV "), which owns the Vanchem vanadium processing
plant (" Vanchem "), for an acquisition price of up to US$21.3
million (the " Transaction "). The purchase by SPR (or an SPR
affiliate) of Bushveld's 64% equity interest in a subsidiary that
owns the Mokopane Vanadium project for US$3.7 million (the
"Mokopane Acquisition"), which was announced on the same date,
remains on track.
Craig Coltman, CEO of Bushveld Minerals Limited, commented:
"We are pleased to be announcing a definitive agreement on
another piece of the overall US$69.5-US$77.5 million funding
package first announced in September. We look forward to working
closely with our new partners at Vanchem to unlock value in this
significant asset. We hope to announce further progress on the
overall funding package in the coming weeks and months."
Background
On 11 September 2023, the Company announced that it had entered
into a binding term sheet with SPR GP1 Proprietary Limited ("SPR")
regarding a proposed package of inter-conditional transactions
which, if successfully concluded, would provide a cumulative
investment by SPR (and its affiliates) into Bushveld and its group
companies of between US$69.5 - US$77.5 million. The SPR investment
was agreed to be structured as follows:
-- An interim working capital facility, totalling ZAR150 million
(US$8.1 million) (the "SPR Facility").
-- The Transaction which the Company announces today that BV has
entered into with SPRF , and the Mokopane Acquisition.
-- An equity investment by SPR of US$12.5 million into the
Company (the "SPR Investment Agreement").
-- A new marketing and sales arrangement under which SPR will be
appointed to carry out all marketing and sales of product for
Bushveld with effect from January 2025. In line with this
arrangement, SPR will provide a medium-term trade finance working
capital facility to the Company, totalling US$25-30 million.
-- A future commitment by SPR of an investment of US$7-10
million in Vanchem for the recommissioning of Kiln-1.
Key terms of the Transaction
-- Up to US$21.3 million will be paid to BV for preference
shares which will constitute 50% of the issued share capital of BV,
in two tranches:
- US$21.3 million, less an amount equal to the outstanding
balance payable in terms of the SPR Facility (US$8.1 million) which
amounts to US$13.2 million, will be paid on the fifth business day
after closing of the Transaction for 99.5% of the preference shares
("First Tranche"); and
- if the Mokopane Acquisition:
-- has become unconditional by the first anniversary of the
closing of the Transaction, then the second tranche for 0.5% of the
preference shares will be an amount equal to US$21.3 million less
the First Tranche, which amounts to US$8.1 million; or
-- has not become unconditional by the first anniversary of the
closing of the Transaction, then the second tranche will be an
amount equal to US$20 million less the First Tranche, which amounts
to US$6.8 million.
-- The Transaction is conditional, amongst other things, upon
the SPR Investment Agreement being signed, approval of the South
African Competition Commission and receipt of exchange control
approval by SPR, in each case before 30 April 2024.
-- Each of BV2, which currently wholly owns all of the issued
shares in BV, and Bushveld Minerals SA Pty Limited, which is party
to the SPR Facility, has provided SPRF with customary warranties
and indemnities, subject to limitations, and guaranteed BV's
obligations under the Transaction, which are also secured by the
same security securing the SPR Facility.
-- The preference shares held by SPRF:
- give SPRF the right to a cumulative preferential quarterly
cash dividend equivalent to 50% of BV's free cash flow, less any
payments due to SPR under the SPR Facility and all other amounts
payable in connection with the Transaction (the marketing fees
payable by BV to SPR are not taken into account when calculating
BV's free cash flow);
- convert into 50% of BV's ordinary shares on the first
anniversary of the Transaction closing, provided, inter alia, that
the intercompany loan between BV (as borrower) and Bushveld Vametco
Alloys (Pty) Ltd (as lender) has been fully repaid or discharged by
that time;
- are redeemable at the original subscription price, together
with applicable interest and other accrued dividends, should a
dividend remain unpaid or otherwise in certain circumstances there
is an event of default under the SPR Facility;
- give the holder the right to appoint half of the board of BV.
The chairman of the board of BV, who will have a casting vote, will
be the CEO of Bushveld for so long as BV2 (or another Bushveld
entity) remains a shareholder of BV (i) if SPR has subscribed for
Bushveld shares in the amount of US$12.5 million; and (ii) for so
long as SPR has the right to appoint a director on the board of
Bushveld. If the US$12.5 million subscription does not complete, or
if following that subscription, SPR's right to appoint a director
on the board of Bushveld falls away, then the right to appoint the
chairman of the BV board (who will have a casting vote) will rotate
between the shareholders every three years, with BV having the
right to make that appointment for the first three year period;
and
- are transferable.
-- Shareholders in BV will also have pre-emptive rights over
each other's shares in BV, including on a change of control of a
shareholder or on a breach by BV2 of the agreement.
-- In relation to the commitment to invest US$7-10 million in
Vanchem for the recommissioning of Kiln-1, SPRF has also agreed to
advance the funding to BV on terms and conditions to be determined
by the BV board. If such funding is in the form of equity, BV2 will
be entitled to provide an amount pro rata to its shareholding,
failing which BV2 will be diluted accordingly.
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Craig Coltman, Chief Executive
Officer
Chika Edeh, Head of Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
+44 (0) 20 7653
RBC Capital Markets Joint Broker 4000
Jamil Miah / Sahil Suleman
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal +44 (0) 207 920
/ James Whitaker 3150
ENDS
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a vertically integrated primary vanadium
producer, it is one of only three operating primary vanadium
producers. In 2022, the Company produced more than 3,800 mtV,
representing approximately three per cent of the global vanadium
market. With a diversified vanadium product portfolio serving the
needs of the steel, energy and chemical sectors.
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com
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END
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November 20, 2023 02:15 ET (07:15 GMT)
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