[miningmx.com] — VILLAGE Main Reef is weighing up its options on
what to do with the R413m-odd expected windfall from the sale of First Uranium’s
assets, saying it has more alternatives than paying a special dividend.
The JSE-listed gold producer holds notes with a face value of R392m in First
Uranium (FUM), an amount it is likely to be paid within the next few weeks following
the sale of FUM’s Ezulwini and Mine Waste Solutions for $335m on Wednesday.
Village is also in line to receive up to R20m in shareholder distributions from FUM.
“Village has consistently indicated that it would distribute the bulk of the proceeds
from this realisation to its shareholders by way of a special dividend,’ the company
said in a statement in February, two weeks before FUM had announced the disposal
of Ezulwini and Mine Waste Solutions.
Commenting again on the R413m payout in a statement released on Thursday,
Village said it would “strike a balance between internal funding needs, the
expectations of shareholders for a special cash dividend and the option of doing a
share buyback as and when appropriate circumstances arise’.
Miningmx asked the recently appointed joint-CEO of Village, Marius
Saaiman, whether the company has changed its position on giving shareholders the
bulk of the monies to be received from FUM.
“In the new dividend tax environment a share buyback will work better,’ Saaiman
answered, referring to the new dividend withholding tax which was implemented by
National Treasury in April. The tax came into effect at 15% and replaced the
previous secondary tax on companies of 10%.
Saaiman said an overhang of Village shares in the market, resulting from the
numerous corporate transactions Village had been involved in, was partly to blame
for the low levels at which the stock was trading.
“This [a share buyback] is a very elegant way of solving that overhang.’
TAU LEKOA OFFER
Saaiman said talks with the Tannous Group, from which Village had received a R1bn
unsolicited offer for Tau Lekoa, had come to a standstill. Village disclosed the offer in
May, but said it regarded the price as too low.
At the time, joint-CEO Bernard Swanepoel said Village didn’t know much about the
Tannous group or whether the bidder had the financial and skills capacity to buy and
operate Tau Lekoa.
“Our advisors have forwarded requests for information, but we’ve received nothing
so far,’ Saaiman said on Thursday. “Anyway, we have no intention of selling it at
that price.’
