TIDMKMR
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ANNOUNCEMENT
Kenmare Resources plc
("Kenmare" or "the Company" or "the Group")
16 November 2021
Proposed Tender Offer to purchase up to 13.5% of the Company's
issued ordinary shares
Publication of Circular and Notice of EGM
Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading
global producers of titanium minerals and zircon, which operates
the Moma Titanium Minerals Mine (the "Mine" or "Moma") in northern
Mozambique, today announces the launch of a proposed tender offer
(the "Tender Offer") to purchase up to 13.5% of the Company's
issued ordinary shares ("Ordinary Shares").
The Tender Offer executes on the Company's stated intention to
increase shareholder returns after the successful completion of its
major capital projects and is supported by strong operational
performance of Kenmare and its subsidiaries (the "Group") and
commodity market strength in 2021.
Highlights
-- The Company proposes to return up to GBP61.8 million (approximately
US$82.7 million) to Eligible Shareholders by way of a Tender Offer at
GBP4.17 per Ordinary Share (being the average of the closing prices per
Ordinary Share as derived from the London Stock Exchange Daily Official
List for the 10 Business Days up to and including 12 November 2021, the
latest practicable date before publication of the Tender Offer circular
to Shareholders).
-- The Tender Offer is for up to 13.5% of the Company's issued share
capital. Under the Tender Offer, each Shareholder is entitled to have up
to 13.5% of its shareholding purchased by the Company at the Tender
Price.
-- The Tender Offer is to be funded from the Company's existing and
available cash resources and borrowings under the Group's borrowing
facilities and remains open until 1.00 p.m. on 9 December 2021.
-- Eligible Shareholders will be able to decide whether to tender none, some
or all of their Ordinary Shares within the overall limits of the Tender
Offer.
-- The Tender Offer will provide Eligible Shareholders with an opportunity
to sell part or all of their Ordinary Shares and to receive their
respective share of the cash which the Company is seeking to return.
-- Directors who are beneficially interested in Ordinary Shares have
indicated that they will not tender Ordinary Shares pursuant to the
Tender Offer.
-- The Tender Offer will provide Eligible Shareholders holding 500 Ordinary
Shares or fewer in certificated form an opportunity to sell their entire
shareholding in the Company without the dealing costs or commissions that
might otherwise make such sale uneconomic (subject to there being
capacity to purchase those Ordinary Shares in accordance with the terms
of the Tender Offer; if there is insufficient capacity to purchase all of
such Ordinary Shares, as many tenders as possible from such Eligible
Shareholders will be accepted in full).
Background to and reasons for the Tender Offer
In October 2018, the Company announced a dividend policy to
return a minimum of 20% of profit after tax to shareholders. In
2021, the Company is generating stronger free cash flow, providing
an opportunity to deliver increased shareholder returns. The
Company announced in March 2021 that it was targeting an increased
dividend pay-out for 2021 of 25% of profit after tax.
The Tender Offer executes on the Company's stated intention to
increase shareholder returns after the successful completion of its
major capital projects and is supported by strong operational
performance of the Group and commodity market strength in 2021. In
its financial results for the six-month period ended 30 June 2021,
the Group reported profit after tax of US$48.0 million in H1 2021
(H1 2020: US$12.7 million).
Having regard to the Group's ongoing earnings and cash flow
generation, the Board (with the exception of Mr. Sameer Oundhakar,
who, as the representative on the Board of the Company's largest
shareholder, absented himself from deliberations relating to the
proposed Tender Offer) unanimously determined that a return of
capital is in the best interests of the Company and its
Shareholders as a whole. The Board believes that a return of
capital in the amount proposed represents an effective use of
shareholder funds and that the continued strength of the Group's
balance sheet, and its cashflow generation after the return of
those funds, will be sufficient to pursue the Group's strategic
objectives.
EGM
The Tender Offer is subject to shareholder approval. A circular
(the "Circular") containing a notice of an extraordinary general
meeting to be held at the Company's offices at 4th Floor, Styne
House, Hatch Street Upper, Dublin, D02 DY27, Ireland at 11:00 a.m.
on Thursday, 9 December 2021 (the "EGM") and details of the
resolution (the "Resolution") to be proposed at the EGM will be
posted today on the Investors section of the Company's website and
will be mailed to Eligible Shareholders. This Circular has been
submitted to the UK Financial Conduct Authority via the Nation
Storage Mechanism (the "NSM") and will be available for inspection
on the NSM's website at www.morningstar.co.uk/uk/nsm.
The Company plans to conduct the EGM in accordance with the
Irish Government's COVID-19 related public health measures and
public health advice. Shareholders should expect the EGM to take
place under constrained circumstances and are strongly recommended
to vote by proxy. The Company will ensure that all legal
requirements of the meeting, in accordance with its Articles of
Association, are satisfied with the minimum necessary quorum of
three Shareholders and physical distancing measures will be in
place. The Company reserves the right to refuse entry to the
meeting where reasonably necessary to comply with the COVID-19
related public health measures and advice. The Company will
continue to closely monitor the developing situation around
COVID-19 as well as any further advice from the Irish Government.
If it becomes necessary to amend the arrangements for the EGM, as
much notice as possible will be given to Shareholders via RIS
announcement.
To facilitate shareholder communication, the EGM will be
broadcast by conference call. The conference call will commence at
11.00 a.m. on Thursday, 9 December 2021. Shareholders will be able
to access the call using the numbers below:
Ireland (Local): +353 1 53 695 84
United Kingdom (Local): +44 (0)20 3936 2999
United States of America (Local): +1 646 664 1960
The access code is: 865447. Please dial-in 5-10 minutes prior to
the start time using the applicable phone number above.
Shareholders should be aware that attendance on the conference
call will not constitute attendance at the meeting and so
Shareholders who attend the call and who wish to vote should submit
their proxies in advance, so as to reach the Registrar by 11.00
a.m. on Tuesday, 7 December 2021.
Irrevocable undertaking
African Acquisition S.à r.l. ("AAS"), an investment vehicle of
the Oman Investment Authority ("OIA", formerly the State General
Reserve Fund of the Sultanate of Oman), which holds approximately
29.10% of the issued ordinary share capital of the Company has
entered into an irrevocable undertaking in connection with the
Tender Offer. Under the irrevocable undertaking, AAS has committed
to offer to sell in the Tender Offer 3,546,811 Ordinary Shares,
being the minimum number of Ordinary Shares as will, following
completion of the Tender Offer, result in the aggregate number of
Ordinary Shares held by AAS representing 29.9% (less than 30%) of
the then total issued Ordinary Shares, thereby ensuring that no
requirement to make a mandatory offer under Rule 37 of the Irish
Takeover Rules will arise for AAS or OIA.
AAS has reserved the right to tender in the Tender Offer more
Ordinary Shares than it has undertaken to tender under this
irrevocable undertaking.
The Company has also received an irrevocable undertaking from
AAS to vote in favour of the Resolution to be proposed at the EGM
in respect of the 31,928,480 Ordinary Shares owned by it,
representing in aggregate 29.1% of the issued Ordinary Shares as at
the Latest Practicable Date.
The Tender Offer
The Tender Offer is to be effected by Peel Hunt LLP ("Peel
Hunt") (acting as principal and not as agent, nominee or trustee)
purchasing Ordinary Shares from Eligible Shareholders at the Tender
Price by means of on-market purchases. Peel Hunt, in turn, has the
right to require the Company to purchase from it, and can be
required by the Company to sell to it, such Ordinary Shares at the
Tender Price under a Repurchase Agreement by way of an on-market
transaction. All of these transactions will be carried out on the
London Stock Exchange's Main Market. All of the Shares purchased by
the Company pursuant to the Repurchase Agreement will be cancelled
and will not rank for any future dividends.
Each Eligible Shareholder will be entitled to sell up to 13.5%
of the Ordinary Shares registered in its name on the Record Date
under the Tender Offer, rounded down to the nearest whole number of
Ordinary Shares (that being an Eligible Shareholder's "Basic
Entitlement"). Any resulting fractional entitlements of Eligible
Shareholders will be aggregated and used to satisfy tenders in
excess of Eligible Shareholders' Basic Entitlements. Ordinary
Shares validly tendered by Eligible Shareholders up to their
respective Basic Entitlement will be accepted and repurchased in
full. Tendering Shareholders may also be able to participate in the
Tender Offer in excess of their Basic Entitlement to the extent
that other Eligible Shareholders tender less than their respective
Basic Entitlement, resulting Ordinary Shares in excess of the
tendering Shareholders' Basic Entitlement becoming available for
sale (known as "Excess Tender Offer Shares"). Any Excess Tender
Offer Shares will be purchased from tendering Shareholders pro rata
to the amount in excess of each eligible shareholder's Basic
Entitlement so tendered (save that tenders from Eligible
Shareholders who hold no more than 500 Ordinary Shares in
certificated form will be accepted in full subject to there being
capacity to purchase those Ordinary Shares in accordance with the
terms of the Tender Offer; if there is insufficient capacity to
purchase all of such Ordinary Shares, as many tenders as possible
from such Eligible Shareholders will be accepted in full).
The formal terms and conditions of the Tender Offer are set out
in the Circular and the Tender Form. The results of the Tender
Offer will be
announced on 10 December 2021 and published on the Company's website (www.kenmareresources.com).
Directors' intentions
The Board considers the Tender Offer and the Resolution to be in
the best interests of Shareholders as a whole. Accordingly, the
Board recommends that Shareholders vote in favour of the Resolution
to be proposed at the EGM, as the Directors intend to do for their
respective individual beneficial holdings of, in aggregate, 827,539
Ordinary Shares, representing approximately 0.75% of the issued
Ordinary Share capital as at the Latest Practicable Date.
The Directors are making no recommendation in relation to
participation in the Tender Offer itself. Whether or not
Shareholders, Euroclear Participants or CDI Holders decide to
tender their interests in Ordinary Shares will depend, amongst
other things, on their own individual circumstances, including
their own tax position. Shareholders, Euroclear Participants and
CDI Holders are recommended to consult their duly authorised
independent advisers in making their own decisions. Each of the
Directors who holds Ordinary Shares has confirmed to the Board that
he or she will not participate in the Tender Offer.
Peel Hunt and Davy are acting as joint brokers to the Company in
connection with the Tender Offer and the matters described in the
Circular. Davy is acting as financial adviser to the Company.
Expected timetable 2021
Tender Offer opens 16 November
Latest time and date for receipt of Forms of Proxy 11.00 a.m. on 7 December
for the EGM
Extraordinary General Meeting 11.00 a.m. on 9 December
Latest time and date for Admitted Institutions to 12.00 noon on 9 December
communicate tender instructions to Euroclear Bank
Latest time and date for receipt of Tender Forms from 1.00 p.m. on 9 December
Eligible Shareholders and tender instructions from
Euroclear Bank
Closing Date for the Tender Offer 1.00 p.m. on 9 December
Record Date for the Tender Offer 6.00 p.m. on 9 December
Announcement of results of the Tender Offer and expected 10 December
date of debit of tendered Ordinary Shares
Euroclear Bank accounts credited with Tender Offer by no later than 10 Business Days following the Closing
proceeds (Settlement Date) Date
Despatch of cheques for Tender Offer proceeds for by no later than 10 Business Days following the Closing
certificated Ordinary Shares Date
Despatch of balance share certificates for unsold by no later than 10 Business Days following the Closing
Ordinary Shares and share certificates for unsuccessful Date
tenders (certificated holders only)
Information in connection with the Tender Offer is available on
the Company's website (www.kenmareresources.com).
Capitalised terms used in this announcement (this
"Announcement"), which have not been defined have the meanings
given to them in the Circular, unless the context provides
otherwise.
This Announcement does not constitute, or form part of, an offer
or any solicitation of an offer, to purchase or repurchase
securities in any jurisdiction or constitute a recommendation or
advice in respect of any securities or other financial instruments
or any other matter.
For further information, please contact:
Kenmare Resources plc
Jeremy Dibb
Corporate Development & Investor Relations
ir@kenmareresources.com
Tel: +353 1 671 0411
Mob: + 353 87 943 0367
Murray (PR advisor)
Joe Heron
Tel: +353 1 498 0300
Mob: +353 87 690 9735
Important Notice:
This Announcement contains inside information.
Forward-looking Statements
Certain statements contained in this Announcement are or may
constitute "forward-looking statements". By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend upon future circumstances that may
or may not occur, many of which are beyond the control of the
Company and all of which are based on its current beliefs and
expectations about future events. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
the Group, or industry results, to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such forward- looking statements
are based on numerous assumptions regarding the present and future
business strategies of the Group and the environment in which the
Group will operate in the future. These forward-looking statements
speak only as at the date of this Announcement. Forward-looking
statements are typically identified by the use of forward-looking
terminology such as "believes", "expects", "may", "will", "would",
"should", "intends", "estimates", "plans", "assumes" or
"anticipates" or the negative of such words or other variations on
them or comparable terminology, or by discussions of strategy which
involve risks and uncertainties.
About Kenmare
Kenmare Resources plc is one of the world's largest producers of
mineral sands products. Listed on the London Stock Exchange and the
Euronext Dublin, Kenmare operates the Moma Titanium Minerals Mine
in Mozambique. Moma's production accounts for approximately 5% of
global titanium feedstocks and the Company supplies to customers
operating in more than 15 countries., Kenmare produces raw
materials that are ultimately consumed in everyday "quality-of
life" items such as paints, plastics and ceramic tiles.
Peel Hunt LLP, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority in the conduct of
investment business, is acting exclusively for the Company and
no-one else in connection with the Tender Offer and the matters
described in this Announcement. Peel Hunt LLP will not regard any
other person as its customer or be responsible to any other person
for providing the protections to customers of Peel Hunt LLP nor for
providing advice in relation to the transactions and arrangements
described in this Announcement.
Davy, which is regulated in Ireland by the Central Bank, is
acting exclusively for the Company and no-one else in connection
with the Tender Offer and the matters described in this
Announcement. Davy will not regard any other person as its customer
or be responsible to any other person for providing the protections
to customers of Davy nor for providing advice in relation to the
transactions and arrangements described in this Announcement.
(END) Dow Jones Newswires
November 16, 2021 02:00 ET (07:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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