Afarak Group Plc Afarak Will Acquire 49% Balance Of Synergy Africa Ltd (Joint Venture)
April 03 2019 - 10:47AM
UK Regulatory
TIDMAFAGR
16:45 London, 18:45 Helsinki, 3 April 2019 - Afarak Group Plc ("Afarak"
or "the Company") (LSE: AFRK, OMX: AFAGR)
AFARAK WILL ACQUIRE 49% BALANCE of SYNERGY AFRICA LTD (Joint Venture)
The Board of Directors of Afarak has approved a transaction in which
Afarak and Joint Venture partner will agree on a share transfer of 49%
of Synergy Africa Ltd at a nominal value of USD 49. After this
transaction Afarak will hold 100% of Synergy Africa Ltd and the Joint
Venture agreement will be terminated. Synergy Africa and the Joint
Venture were established in 2010, when Chromex Mining Plc was acquired
by the Joint Venture.
The transaction is expected to be signed and executed within next 2-3
weeks. With this transaction, Afarak will acquire full control over its
mining assets and will consolidate Synergy Africa as a subsidiary. The
acquisition of the of the Joint Venture interest will be accounted for
in Q2'2019. This is likely to give rise to a significant accounting gain
due to the revaluation of the Afarak 51% initial holding due to the
change in control, according to IFRS.
This transaction simplifies the group structure and will allow the
company to consolidate the Synergy Africa results as a subsidiary fully
into the Afarak accounts. If Synergy Africa had been consolidated as a
subsidiary in 2018 Afarak Group's revenue would have increased by EUR 29
million, and EBITDA by EUR 1 million.
Guy Konsbruck, CEO said that "we are extremely glad to have reached this
agreement, as the future growth potential of AFARAK resides largely in
our mining activity. Additionally, our niche approach to the Ferro
Chrome production requires full control over our mining assets to
guarantee sustainable availability of high-quality ore."
As a part of this transaction, the current loan from the Joint Venture
partner to Synergy Africa of GBP 18 million will be restructured in a
way that
-- GBP 3 million originating from a loan from another group company (EWW)
towards the Joint venture partner will be offset;
-- remaining balance loan of GBP 15 million owed to the Joint Venture
partner will be treated as senior debt by Synergy Africa Ltd, and repaid
over a period of up to 5 years, with only a small portion of GBP 1.5
million payable shortly after completion.
The Board of Directors
Afarak Group
For additional information, please contact:
Afarak Group Plc
Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@afarak.com
Jean Paul Fabri, +356 9940 8746, jp.fabri@afarak.com
Financial reports and other investor information are available on the
Company's website: www.afarak.com.
Afarak Group is a specialist alloy producer focused on delivering
sustainable growth with a Speciality Alloys business in southern Europe
and a FerroAlloys business in South Africa. The Company is listed on
NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange
(AFRK).
Distribution:
NASDAQ Helsinki
London Stock Exchange
Main media
www.afarak.com
AFARAK WILL AQUIRE 49% BALANCE of SYNERGY AFRICA LTD (Joint Venture)
(END) Dow Jones Newswires
April 03, 2019 11:47 ET (15:47 GMT)
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