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(Sharecast News) - Vanadium producer Bushveld Minerals announced its conditional acquisition of the remaining 26% minority interest in Bushveld Vametco Holdings (BVH) on Monday, gaining full ownership of the Vametco vanadium mine and production facility in South Africa.
The AIM-traded firm said the transaction involved the issue of 232,836,255 shares in Bushveld Minerals, equivalent to 13% of its expanded share capital, to the Black Economic Empowerment (BEE) consortium currently holding the minority interest.
It said the acquisition granted it full operational, management, and financial control of Vametco, enabling it to manage Vametco's cash flows without the restrictions imposed by the previous minority interest.
Notably, the transaction was expected to be immediately value accretive to Bushveld shareholders and enhance earnings per share going forward.
Of the consideration shares issued, 70% would be subject to a six-month lock-in period.
The company said completion of the transaction remained contingent on South African Reserve Bank (SARB) approval, expected within six weeks.
It said the transaction would be finalised after SARB approval or on an announcement confirming the completion of its debt restructuring transaction, whichever happens later.
Following completion, BVH would seek approval from the Minister of Mineral Resources and Energy to update the BVH mining right to reflect the new ownership structure.
The transaction structure involved BVI 973 and BVI 1833, collectively known as the vendors and the BEE consortium, selling their BVH shares to Bushveld Minerals.
BVI 973 would receive 152,069,166 consideration shares, representing 8.49% of the enlarged issued share capital, while BVI 1833 would receive 80,767,089 shares, representing 4.51% of the share capital.
In addition, Bushveld Minerals would pay ZAR 18m (£0.79m) in cash to BVI 1833, transfer an A-class share in Oakleaf Investments 115 to BVI 973, and cancel a loan of $0.51m to one of the intermediate subsidiary companies in the BEE structure.
BVI 973 is co-owned by the Vametco Community Trust at 25% and Marble Gold 208 - a wholly-owned subsidiary of Jaxson 640.
Jaxson 640 is majority-owned at 70% by Billy Chipane, a South African entrepreneur and BVH director, and 30% by the Peo Matlafatso Trust, owned by local Mothotlung communities.
BVI 1833 is wholly owned by Oakleaf Investments 115, which is wholly owned by Jaxson 640.
To secure the shareholders' commitment to the lock-in period, Bushveld Minerals granted BVI 973 and BVI 1833 the right to subscribe for additional shares at their cost to maintain or reinstate their collective shareholding in the company at or to 13% of the aggregate issued shares if it fell below that threshold due to a third-party subscription within six months of completion.
"This is an important transaction as it consolidates the ownership of this valuable vanadium producing asset under a single entity - Bushveld Minerals," said chief executive officer Craig Coltman.
"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."
At 1235 GMT, shares in Bushveld Minerals were down 0.39% at 1.3945p.
Reporting by Josh White for Sharecast.com.
