Gold One International (ASX, JSE: GDO) is steadily moving towards the completion of a transaction that has potential to transform the South African focused gold producer.
A consortium of Chinese investors has received approval to proceed with a transaction to become the major shareholder and long term strategic partner of Gold One.
The approval was granted by the National Development and Reform Commission (NDRC) of the People’s Republic of China and represents a major condition precedent to completion of the transaction.
On 16 May 2011, Gold One announced that it had entered into an agreement to implement the transaction that comprises a series of interdependent transactions, including a cash offer of A$0.55 per existing Gold One share and a minimum A$150 million (ZAR1.2 billion based on the current exchange rate) capital injection into Gold One to secure a 60% to 75% stake.
Approvals by the Ministry of Commerce (MOFCOM) and subsequently, the State Administration for Foreign Exchange (SAFE) are on track.
Neal Froneman, Gold One President and CEO, said “I am very pleased that we have reached another significant milestone in this transaction.
"We understand that the NDRC approval is probably the most significant of the Chinese approvals, and look forward to receiving the other approvals.”
As part of the transaction, the consortium, via BidCo, will make a cash offer to Gold One shareholders at A$0.55 (ZAR4.50) per share, which represented a 27.9% premium to the last closing price before the bid and was 25.1% above the 30-day VWAP.
The capital injection of A$150 million through BidCo will significantly bolster Gold One’s balance sheet.
The consortium may subscribe for up to an additional 188.7 million shares in Gold One at A$0.53, should the initial subscription by the consortium and acceptances of the A$0.55 per Gold One share cash offer not result in achieving an aggregate interest of 60%.
Directors of Gold One have recommended the transaction, with the consortium already securing 17.7% of the company from African Global Capital.
Gold One has developed a strategy to increase the company's scale and production capacity and has identified that the consortium as an investment partner can strengthen acquisition capabilities.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/20915/gold-one-international-steps-closer-to-finalising-cash-offer-from-chinese-consortium-20915.html
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