Vanadium producer Bushveld Minerals has agreed to acquire the remaining 26% stake in Bushveld Vametco Holdings (BVH), taking complete ownership of South Africa’s Vametco vanadium mine and production facility.
BVH is owned by a Black Economic Empowerment (BEE) consortium.
In return for the remaining minority stake, Bushveld will issue 232.8 million shares or 13% of the enlarged share capital to the consortium.
The 26% stake to be acquired is held by Business Venture Investments 973 (BVI 973) and Business Venture Investments 1833 (BVI 1833).
As consideration for the transaction, Bushveld will issue 152 million shares to BVI 973, constituting 8.49% of its enlarged share capital; and 80.7 million shares to BVI 1833, making up 4.51% of the share capital.
The company will also make a cash payment of R18m ($956,041) to BVI 1833 and cancel a $0.51m loan for one of the intermediate subsidiary companies in the BEE structure.
It will also transfer to BVI 973 an A-class share in Oakleaf Investments 115, which solely owns BVI 1833.
The transaction will result in Bushveld holding 100% of operational, management and financial control over the Vametco mine and vanadium plant. It will give the company full control over Vametco's cash flows.
The deal is projected to be immediately value accretive to Bushveld's shareholders and boost its earnings per share, going forward.
Bushveld CEO Craig Coltman said: “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.”
The deal will close after receiving approval from the South African Reserve Bank (SARB) or the completion of the company’s debt restructuring transaction, whichever occurs later.
