TIDMKMR
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ANNOUNCEMENT
Kenmare Resources plc
("Kenmare" or "the Company")
15 August 2023
Proposed Tender Offer to purchase up to 5.9% 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 5.9% of the Company's issued
ordinary shares ("Ordinary Shares").
The Tender Offer executes on the Company's stated intention to
occasionally supplement shareholder returns by buying back shares
when sufficient capital is available supported by the operational
performance and strong financial position of Kenmare and its
subsidiaries (the "Group") and wider commodity market
conditions.
Highlights
-- The Company proposes to return up to GBP23.6 million (approximately $30
million) to Eligible Shareholders by way of a Tender Offer at GBP4.22 per
Ordinary Share (being the closing price of an Ordinary Share as derived
from the London Stock Exchange Daily Official List on 14 August 2023).
-- The Tender Offer is for up to 5.9% of the Company's issued share capital.
Under the Tender Offer, each Shareholder is entitled to have up to 5.9%
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 remains open until 1.00 p.m. on 8 September
2023.
-- 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 1,000
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
The Board continually reviews the Company's capital allocation
to maximise long-term returns to Shareholders. The Board seeks to
return value to Shareholders through a combination of capital
appreciation, share buybacks and dividend payments.
Kenmare began paying dividends in 2019 and in each of the last
three years the Company has paid dividends representing 25% of
profit after tax. Since 2019, the Company has returned $103.6
million in total to shareholders by way of dividends and previously
completed a share buyback of GBP61.8 million (approximately $82.7
million) in December 2021.
In March 2023, Kenmare reported record revenues of $526.0
million and record EBITDA of $298.0 million for the year to 31
December 2022 as well as moving into a net cash position of $27.5
million at 31 December 2022. In its financial results for the
six-month period ended 30 June 2023, the Group reported profit
after tax of $67.8 million in H1 2023 (H1 2022: $62.5 million) and
cash and cash equivalents of $108.8 million as at 30 June 2023.
In April of this year the Company announced that, based on its
current and anticipated financial performance and strong balance
sheet position, it intended to evolve its dividend policy towards a
payout range of 20% to 40% of underlying profit after tax, and that
additional special dividends and share buybacks would be
considered, subject to market conditions, balance sheet position
and capital requirements. In July, the Company announced that it
was considering a share buyback of approximately $30 million,
subject to trading conditions, business performance and Board and
other necessary approvals.
The Tender Offer launched by the Company today executes on the
Company's stated intention to occasionally supplement shareholder
returns by buying back shares when sufficient capital is available
supported by the operational performance and strong financial
position of the Group and wider commodity market conditions. Whilst
the Board continues to explore further growth opportunities, it
currently considers that, following strong cash generation which is
expected to continue through 2023 and beyond, the Company has a
level of cash on its balance sheet that is surplus to its
short-term requirements.
Having regard to the Group's ongoing earnings, cash flow
generation and funding of the potential future capital expenditures
of the business, the Board (with the exception of Mr. Issa Al
Balushi, who, as the representative on the Board of the Company's
largest shareholder, the Oman Investment Authority (through its
investment vehicle African Acquisition S.à r.l.) 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
Tender Offer provides Shareholders with both choice (that is, the
discretion to participate) and ability to realise value without
incurring fees. 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 Friday, 8 September 2023 (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 National
Storage Mechanism (the "NSM") and will be available for inspection
on the NSM's website at www.morningstar.co.uk/uk/nsm. This Circular
has also been submitted to Euronext Dublin ("Euronext") and will be
available for inspection on Euronext's website at
https://direct.euronext.com/#/oamfiling.
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 including, without
limitation, the interim dividend declared by the Company on 15
August 2023 and payable on 13 October 2023.
Each Eligible Shareholder will be entitled to sell up to 5.9% 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 in 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 1,000 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 11 September 2023 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, 550,129
Ordinary Shares, representing approximately 0.58% 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 is acting as broker to the Company in connection with
the Tender Offer and the matters described in the Circular.
Expected timetable
2023
------------------------------------------------ -----------------------------
Tender Offer opens 15 August
------------------------------------------------ -----------------------------
Latest time and date for receipt of Forms 11.00 a.m. on 6 September
of Proxy for the EGM
------------------------------------------------ -----------------------------
Extraordinary General Meeting 11.00 a.m. on 8 September
------------------------------------------------ -----------------------------
Latest time and date for Admitted Institutions 12.00 noon on 8 September
to communicate tender instructions to Euroclear
Bank
------------------------------------------------ -----------------------------
Latest time and date for receipt of Tender 1.00 p.m. on 8 September
Forms from Eligible Shareholders and tender
instructions from Euroclear Bank
------------------------------------------------ -----------------------------
Closing Date for the Tender Offer 1.00 p.m. on 8 September
------------------------------------------------ -----------------------------
Record Date for the Tender Offer 6.00 p.m. on 8 September
------------------------------------------------ -----------------------------
Announcement of results of the Tender Offer 11 September
and expected date of debit of tendered Ordinary
Shares
------------------------------------------------ -----------------------------
Euroclear Bank accounts credited with Tender by no later than ten Business
Offer proceeds (Settlement Date) Days following the Closing
Date
------------------------------------------------ -----------------------------
Despatch of cheques for Tender Offer proceeds by no later than ten Business
for certificated Ordinary Shares Days following the Closing
Date
------------------------------------------------ -----------------------------
Despatch of balance share certificates for by no later than ten Business
unsold Ordinary Shares and share certificates Days following the Closing
for unsuccessful tenders (certificated holders Date
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 / Michael Starke
Investor Relations
ir@kenmareresouces.com
Tel: +353 1 671 0411
Mob: +353 87 943 0367
Murray (PR advisor)
Paul O'Kane
pokane@murraygroup.ie
Tel: +353 1 498 0300
Mob: +353 86 609 0221
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 Resources
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 7% 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.
All monetary amounts refer to United States dollars unless
otherwise indicated.
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.
(END) Dow Jones Newswires
August 15, 2023 02:00 ET (06:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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