Black-owned diversified firm Mvelaphanda Group on Monday announced that the suspensive agreement by which Incwala Resources would acquire a 22,9% in mining group Mvelaphanda Resources had fallen through.
On December 22, Incwala and the Mvelaphanda Group announced that they had entered into an agreement by which the Mvelaphanda Group would dispose of its 22,9% stake in Mvela subject to certain suspensive conditions that had to be fulfilled by last Friday.
The conditions included obtaining the consent of the Mvela board for the transfer of the management agreement to Incwala.
“The proposed acquisition did not proceed as agreement could not be reached with the board of Mvela to authorise the transfer of the management agreement on acceptable terms to Incwala,” Incwala said.
“This is on account of assurances required by Mvela Resources that it have a pre-emptive right that would have forced Incwala to offer all new business opportunities in the resource sector to Mvela Resources at cost, until April 2009,” the company added.
“Whilst the Mvela Resources transaction makes strategic sense for Incwala, it would not be prudent for us to conclude a deal which has the ability to compromise Incwala’s ability to deliver shareholder value as well as drive our independent strategy. Incwala remains committed to its stated vision of becoming a diversified flagship for broad-based black empowerment.
With solid empowerment credentials and strong cash-flow, we remain excited about our prospects,” said Dawn Marole, the chairperson of Incwala.
Mvela Resources’ key assets are a 22,3% stake in Northam Platinum and a fully diluted 20,7% stake in Trans Hex. By 2009, it will earn a 15% stake in Gold Fields’ South African operations.
Incwala Resources’ only asset is an 18% interest in Lonmin’s South African mines.
At 11:40am, Mvela Group were trading at R9,50 per share, up 5,6% or 50 cents from Friday’s close, while Mvela Resources was 50 cents or 1,6% higher at R31,50 per share. – I-Net Bridge