Western Coal Announces Proposal to Acquire Energybuild
/NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION/
VANCOUVER, June 9 /CNW/ - The Directors of Western Coal Corp (TSX: WTN, WTN.WT and AIM: WTN) ("Company" or "Western") and Energybuild Group plc Independent Directors are pleased to announce the terms of a recommended proposal ("Proposal") for the acquisition by Western of all the outstanding issued ordinary share capital of Energybuild Group plc ("Energybuild") not already held by the Western. It is intended that the Proposal will be effected by way of a scheme of arrangement ("Scheme") of Energybuild under section 899 of the UK Companies Act 2006.
Summary
- Under the Proposal, Scheme Shareholders will receive 0.0833 new
Western Shares for every 1 Energybuild Share held.
- The Proposal values the entire issued ordinary share capital of
Energybuild at approximately (pnds stlg)54.4 million and each
Energybuild Share at approximately 24.0 pence based on the Closing
Price of one Western Share of 288 pence on 8 June 2010, being the
last Dealing Day prior to the date of this announcement.
- Based on the Closing Price of one Western Share of 288 pence on
8 June 2010, being the last Dealing Day prior to the date of this
announcement, the Proposal represents
- a premium of approximately 12.9 per cent. to the Closing Price of
an Energybuild Share of 21.25 pence on the same day; and
- a premium of approximately 26.1 per cent. to the average ratio of
the Closing Prices of a Western Share and an Energybuild Share for
the one month prior to the date of this announcement.
- The Energybuild Independent Directors, who have been so advised by
Arbuthnot Securities, consider the terms of the Proposal to be fair
and reasonable. In providing its advice to them, Arbuthnot Securities
has taken into account the commercial assessments of the Energybuild
Independent Directors. Further important background to the
recommendation is given in the full announcement.
- The Energybuild Independent Directors intend unanimously to recommend
that Energybuild Shareholders vote in favour of the resolution to
approve the Scheme to be proposed at the Court Meeting and vote in
favour of the Special Resolution to be proposed at the General
Meeting.
- The Energybuild Independent Directors believe that the Proposal will
give Energybuild access to the substantial coal mining expertise
within Western and improve access to finance if required, thus
underpinning Energybuild's future development while allowing
Energybuild shareholders to retain their exposure to the coal mining
industry through an investment in a larger more diversified group.
- The Proposal will result in the integration of Energybuild into the
Western Group, simplifying Western's corporate structure and creating
the opportunity to apply Western's operational and financial resources
to develop Energybuild. The Proposal will result in the issuance of
approximately 8.6 million New Western Shares to Energybuild
Shareholders representing approximately 3.1 per cent. of Western's
issued share capital as enlarged by this issue (excluding
approximately 72.1 million non-voting common shares owned by Cambrian
Mining Ltd, a wholly-owned subsidiary of Western).
- Irrevocable undertakings to vote in favour of the Scheme at the Court
Meeting and the resolution at the General Meeting have been secured
from the Energybuild Independent Directors and another Energybuild
Shareholder in respect of, in aggregate, 26,447,552 Energybuild
Shares, representing approximately 25.8 per cent. of Energybuild's
existing issued share capital not already held by the Western Group
and approximately 11.7 per cent. of Energybuild's total existing
issued share capital.
- Letters of intent to vote in favour of the Scheme at the Court Meeting
and the resolution at the General Meeting have also been provided by
certain Energybuild Shareholders in respect of the Energybuild Shares
held by them as at the record time for the Meetings. These
shareholdings currently total, in aggregate, 24,700,894 Energybuild
Shares, representing approximately 24.1 per cent. of Energybuild's
existing issued share capital not already held by the Western Group
and approximately 10.9 per cent. of Energybuild's total existing
issued share capital.
- The Proposal will be put to Energybuild Shareholders (other than, in
the case of the Court Meeting, Western and any member of the Western
Group) at the Court Meeting and at the General Meeting, which are
expected to be held during July 2010. To become effective, the Scheme
must be approved by a majority in number of the holders of Energybuild
Shares entitled to vote and present and voting at the Court Meeting,
either in person or by proxy, representing not less than three fourths
in value of the Scheme Shares that are voted at the Court Meeting. In
addition, a special resolution implementing the Scheme and sanctioning
the related reduction of share capital must be passed by Energybuild
Shareholders representing 75 per cent. of the votes cast at the
General Meeting.
- It is expected that the Scheme Document will be posted during June
2010 (and in any event within 28 days of this announcement, unless
otherwise agreed with the Panel) and that the Scheme will become
effective in August 2010, subject to the satisfaction of the
Conditions set out in Appendix I.
- Cenkos Securities is acting as financial adviser to Western and no
one else in connection with the Proposal. Arbuthnot is acting as
financial adviser to Energybuild and no one else in relation to the
Proposal.
Keith Calder, CEO of Western, commented:
"Acquiring 100% of Energybuild fits in with our value accretive growth strategy. With a tremendous coal resource base in which to build Energybuild upon, we believe applying Western's considerable technical and financial strength will help in developing the project faster and achieve shareholder value earlier for Western shareholders."
Colin Cooke, Chairman of Energybuild, commented:
"This Proposal will assure Energybuild's future development by giving it improved access to Western's greater coal expertise and financial resources. Based on current share prices the terms provide a premium for Energybuild shareholders and will allow them to retain their exposure to the coal mining industry".
This summary should be read in conjunction with the full text of the attached announcement of which it forms part (including the Appendices).
Terms used in this summary shall have the meaning given to them in the full announcement. All times referred to are London times unless otherwise stated.
This announcement is not intended to, and does not, constitute or form part of any offer to sell or an invitation to purchase or to subscribe for any securities pursuant to the Proposal or otherwise or the solicitation of any vote or approval in any jurisdiction. The Proposal will be made solely through the Scheme Document and the Forms of Proxy, which will contain the full terms and conditions of the Proposal, including details of how to vote in respect of the Proposal. Any approval or other response to the Proposal should be made only on the basis of the information in the Scheme Document. Energybuild Shareholders are advised to read carefully the formal documentation in relation to the Proposal once it has been dispatched.
The availability of the Proposal to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about and observe any applicable requirements.
Copies of this announcement are not being, and must not be, directly or indirectly mailed or otherwise forwarded, distributed or sent in or into any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving this announcement (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or otherwise send it in, or into or from any such jurisdiction. Further details in relation to overseas shareholders will be contained in the Scheme Document.
This announcement has been prepared in accordance with English Law, the Takeover Code and the AIM Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. The Proposal will be subject to the Takeover Code, and to the applicable rules and regulations of the Financial Services Authority and the London Stock Exchange.
This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" concerning the Energybuild Group and the Western Group. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates" or similar expressions identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements. Energybuild and Western assume no obligation and do not intend to update these forward-looking statements, except as required pursuant to applicable law.
Arbuthnot Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Energybuild and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Energybuild for providing the protections afforded to customers of Arbuthnot Securities or for providing advice in relation to the Proposal or any other matters referred to in this announcement.
Cenkos Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as financial adviser for Western and no one else in connection with the Proposal and will not be responsible to anyone other than Western for providing the protections afforded to customers of Cenkos Securities or for providing advice in relation to the Proposal or any matters referred to in this announcement.
The Western Directors accept responsibility for the information contained in this announcement other than that relating to Energybuild, the Energybuild Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Western Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Energybuild Directors accept responsibility for the information contained in this announcement which relates to Energybuild, themselves and their immediate families, related trusts and connected persons only, save that only the Energybuild Independent Directors accept responsibility for the recommendation of the Proposal and any opinion attributable to the Energybuild Independent Directors relating to such recommendation contained in this announcement. To the best of the knowledge and belief of the Energybuild Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they take responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
No statement in this announcement is intended as a profit forecast or profit estimate and no statement in this announcement should be interpreted to mean that the future earnings per share of the Enlarged Group for current or future financial periods will necessarily match or exceed the historical or published earnings per share of Western and/or Energybuild.
Neither the content of Western's or Energybuild's website (or any other website) nor the content of any website accessible from hyperlinks on any such website is incorporated into, or forms part of, this announcement.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any paper offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in one per cent or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
9 June 2010
Recommended proposal for the acquisition of Energybuild Group Plc
by Western Coal Corp.
to be implemented by means of a scheme of arrangement
under sections 895 to 899 of the Companies Act 2006
1. Introduction
The Energybuild Independent Directors and the Western Directors are pleased to announce that they have reached agreement on the terms of a recommended proposal for the acquisition by Western of all of the outstanding issued ordinary share capital of Energybuild not already held by the Western Group. The Proposal is to be effected by way of a scheme of arrangement of Energybuild which requires approval by the Energybuild Shareholders (other than the Western Group) and the sanction of the Court. Upon the Scheme becoming effective, Scheme Shareholders will receive 0.0833 New Western Shares for every Scheme Share held. No fractions of New Western Shares will be allotted.
2. Summary of the terms of the Proposal
The Proposal is to be effected by way of a UK Court sanctioned scheme of arrangement of Energybuild under section 899 of the UK Companies Act 2006 involving a reduction of capital under section 641 of the UK Companies Act 2006. The Scheme is subject to the Conditions and the further terms set out in Appendix I of this document. If the Scheme becomes effective, the Scheme Shares will be cancelled and Energybuild will become a wholly owned subsidiary of Western.
In consideration for the cancellation of the Scheme Shares, Scheme Shareholders will receive:
0.0833 New Western Shares for every 1 Scheme Share Held
The Proposal values the entire issued ordinary share capital of Energybuild at approximately (pnds stlg)54.4 million and each Energybuild Share at approximately 24.0 pence based on the Closing Price of one Western Share of 288 pence on 8 June 2010, being the last Dealing Day prior to the date of this announcement.
Based on the Closing Price of one Western Share of 288 pence on 8 June 2010, being the last Dealing Day prior to the date of this announcement, the Proposal represents:
- a premium of approximately 12.9 per cent. to the Closing Price of an
Energybuild Share of 21.25 pence on the same day;
- a premium of approximately 26.1 per cent. to the average ratio of the
Closing Prices of a Western Share and an Energybuild Share for the
one month prior to the date of this announcement;
- a premium of approximately 17.4 per cent. to the average ratio of the
Closing Prices of a Western Share and an Energybuild Share over the
six months prior to the date of this announcement; and
- a premium of approximately 59.9 per cent. to the price at which
Energybuild last raised (pnds stlg)14.5 million of new equity in
December 2009.
Assuming no further shares are issued by Energybuild prior to the Scheme becoming effective, implementation of the Scheme would involve the issue by Western of up to approximately 8.6 million New Western Shares for the existing issued Energybuild Shares, excluding those already held by the Western Group. This would represent approximately 3.1 per cent. of Western's issued share capital as enlarged by this issue (excluding the Cambrian Shares which are non-voting), or approximately 2.5 per cent. of Western's issued share capital as enlarged by this issue (including the Cambrian Shares).
The Scheme will become effective upon the sanctioning by the UK Court of the Scheme and of the Reduction of Capital and the delivery to the Registrar of Companies of a copy of the Orders and, in relation to the Reduction of Capital, the registration of such Order by the Registrar of Companies which, subject to the Court's timetable, is expected to occur in August 2010.
Western will be a member of Energybuild on the Effective Date and accordingly there will be no requirement under section 593 of the UK Companies Act 2006 for an independent valuation. As its Energybuild Shares will not be Scheme Shares which will be cancelled under the Proposal, Western is precluded from voting at the Court Meeting and, accordingly, the Energybuild Shares held by Western (and members of the Western Group) will not count towards the majorities required to approve the Scheme. Western will, however, undertake to be bound by the Scheme.
Holders of Options/Warrants
The Scheme Document will contain appropriate information relevant to the holders of Options and Warrants in Energybuild.
3. Irrevocable undertakings and letters of intent
Irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolution at the General Meeting have been secured from the Energybuild Independent Directors and another Energybuild Shareholder in respect of, in aggregate, 26,447,552 Energybuild Shares, representing approximately 25.8 per cent. of Energybuild's existing issued share capital not already held by the Western Group and approximately 11.7 per cent. of Energybuild's total existing issued share capital.
Letters of intent to vote in favour of the Scheme at the Court Meeting and the resolution at the General Meeting have also been provided by certain Energybuild Shareholders in respect of the Energybuild Shares held by them as at the record time for the Meetings. These shareholdings currently total, in aggregate, 24,700,894 Energybuild Shares, representing approximately 24.1 per cent. of Energybuild's existing issued share capital not already held by the Western Group and approximately 10.9 per cent. of Energybuild's total existing issued share capital.
Further details of the irrevocable undertakings and letters of intent are set out in Appendix III.
4. Background to and reasons for recommending the Proposal
Despite the progress to date and the Energybuild Independent Directors' continuing confidence in the future, Energybuild remains in a development phase. The Energybuild Independent Directors continue to believe that the Company remains on track to raise production to the targeted rate of 750,000 tonnes by 2013. However, Energybuild's ability to do this successfully and to sell its coal at the prices anticipated depend on many factors. These include the geology encountered in the mine, the ability to implement new production techniques and ramp up production successfully, the outlook for the different end markets for the Company's coal (particularly the steel industry) and the course of future world coal prices. Many of these are outside the Company's control.
Energybuild's ability to raise finance other than through an issue of new equity or an equity-linked instrument remains limited. Although its plans do not currently envisage a need for additional finance, adverse events could force the need to scale back development or raise additional funding at some stage. The Company's last fundraising in December 2009 was successfully concluded with the support of Western. If additional capital was to be required at some future stage, there can be no assurance that such finance would be forthcoming or forthcoming on acceptable terms.
If approved, the Proposal will give the Company access to the substantial coal mining expertise available within Western and improve access to finance if required. At the same time Western's greater size and ability to absorb the impact of unexpected events should allow Energybuild to accelerate the development of the Aberpergwm mine.
Western currently owns 54.7 per cent. of Energybuild's issued share capital. The Proposal offers Energybuild Shareholders the opportunity to retain their exposure to the coal mining industry and to exchange their Energybuild Shares for more liquid, albeit more volatile, Western shares The proposed terms represent a premium of approximately 12.9 per cent. to the ratio of the Closing Prices of Western Shares and Energybuild Shares on 8 June 2010, being the last Dealing Day prior to the date of this announcement, and a premium of approximately 17.4 per cent. to the average ratio of the Closing Prices of Western Shares and Energybuild Shares over the six months prior to the date of this announcement.
5. Recommendation
The Energybuild Independent Directors, having been so advised by Arbuthnot Securities, consider the terms of the Proposal to be fair and reasonable. In providing its advice to the Energybuild Independent Directors, Arbuthnot Securities has taken into account the commercial assessments of the Energybuild Independent Directors.
The Energybuild Independent Directors intend unanimously to recommend that (i) Energybuild Shareholders (excluding Western and members of the Western Group) vote in favour of the resolution to approve the Scheme to be proposed at the Court Meeting and (ii) Energybuild Shareholders vote in favour of the Special Resolution to be proposed at the General Meeting.
As an officer of Western and a director of Energybuild, Braam Jonker is deemed to be a non-independent director of Energybuild and consequently will not vote on any resolutions of the Energybuild Independent Directors to recommend the Proposal.
Energybuild Shareholders considering voting in favour of the Scheme are referred to the investment considerations which will be set out in the Scheme Document. If you are in any doubt as to the action you should take, you should seek your own financial advice from an independent financial adviser.
6. Information on Energybuild
Energybuild is an AIM quoted developer and producer of Welsh anthracite and surface mined coal. The Company is presently developing the Aberpergwm mine and adjoining underground anthracite coal reserves and resources located in the Neath and Dulais Valleys of South Wales. The mine has a proven and probable coal reserve of 6.8 million tonnes and estimated recoverable inferred coal resource of 36.9 million tonnes. Energybuild also operates the nearby Nant y Mynydd and Forest Quarry surface opencast coal and stone mining areas and has identified further possible opencast sites within the Aberpergwm surface lease for potential development.
In its audited results for the nine months to 31 March 2010 announced this morning, Energybuild reported a profit before tax of (pnds stlg)0.2 million (year to 30 June 2009: (pnds stlg)1.9 million) on revenues of (pnds stlg)6.8 million (year to 30 June 2009: (pnds stlg)16.4 million) and earnings per share of 0.08p (year to 30 June 2009: 1.0131p). As at 31 March 2010 Energybuild had audited net assets of (pnds stlg)33.8 million and net cash and cash equivalents of (pnds stlg)5.0 million. Further financial information in relation to Energybuild will be included in the Scheme Document.
7. Information on Western
Western is a producer of high quality metallurgical and thermal coal from mines in northeast British Columbia (Canada) and West Virginia (USA). Over the next three years, Western has organic growth plans to produce over 10 million tonnes per year. Western has a 20+ year coal reserve base.
The coal properties in British Columbia have over 127 million tonnes of reserves and over 230 million tonnes of resources. The coal properties in West Virginia have over 47 million tons (short) of reserves and 92 million tons (short) of resources.
Western's British Columbia mines are:
- Perry Creek Mine on the Wolverine property is a surface mine that has
the potential to produce 2.0 Mt/a of hard coking coal.
- Brule Mine on the Brazion property is a surface mine that has the
potential to produce 2.0 Mt/a.
- Willow Creek Mine on the Brazion property is a surface mine that has
the potential to currently produce 0.9 Mt/a of low-vol PCI. The
current mine plan is under review with plans to increase production
to over 1.8 Mt/a of both low-vol PCI and hard coking coal.
- Western also has a 50% joint venture interest in the Belcourt-Saxon
properties. A technical report has been completed on the Belcourt
property which indicates that property can support production of at
least 4.0 Mt/a. Further studies on the Saxon property will be
required.
Western's West Virginia mines are:
- Maple Coal operates both a surface and an underground mine, which
combined have the capacity to produce over 2.0 million short tons per
year. The underground mine produces coking coal, while the surface
mine produces thermal coal.
- Gauley Eagle operates both a surface and an underground mine, which
combined have the capacity to produce 1.5 million short tons per year.
The underground mine produces semi-soft coking coal, while the surface
mine produces thermal coal.
For the nine months ended 31 December 2009 Western reported net income of C$29.6 million on sales of C$302.0 million and basic earnings per share of C$0.13. Western reported net income of C$214.5 million on sales of C$586.1 million and basic earnings per share of C$1.17. Financial information on Western will be included in the Scheme Document.
Western expects to report its audited results for the year to 31 March 2010 on 10 June 2010.
8. Management and employees
The board of directors of Western has given assurances to the board of directors of Energybuild that, following the Scheme becoming effective, the existing employment rights of all management and employees of the Energybuild Group will be fully safeguarded. There are no plans to change the principal office location of Energybuild.
9. Structure of the Scheme
The Proposal is to be effected by way of a scheme of arrangement. The Scheme is an agreement between Energybuild and the holders of Scheme Shares (as defined in the Scheme) under section 899 of the Companies Act 2006 and is subject to the sanction of the Court.
It is proposed that, under the Scheme, all the Scheme Shares in issue prior to the Voting Record Time will be cancelled and that the reserve arising from such cancellation will be applied in paying up in full a number of new Energybuild Shares (having the same aggregate nominal value as is equal to the aggregate nominal value of the Scheme Shares cancelled) and issuing them to Western in consideration for which the holders of the cancelled Scheme Shares will receive New Western Shares on the basis set out below. Any further Scheme Shares issued before the Scheme Record Time and in respect of which the holders are or have consented to be bound by the Scheme will also be subject to the Scheme.
Scheme Shareholders who are on the register of members of Energybuild at the Scheme Record Time will receive 0.0833 New Western Shares for every 1 Energybuild Share. No fractions of New Western Shares will be allotted.
Energybuild Shares issued after the Scheme Record Time will not be subject to the Scheme. Accordingly, it is proposed that the Articles be amended so that Energybuild Shares issued after the Scheme Record Time (other than to Western or a nominee of Western) will be automatically acquired by Western or a nominee of Western on the same terms as under the Scheme.
Any Energybuild Shares issued to holders of Options and Warrants on exercise of their Options and Warrants after the Scheme Record Time will not be included in the Scheme and such holders of Options or Warrants will not be bound by the Scheme. The amendments to the Articles to be proposed at the General Meeting will provide that any person acquiring Energybuild Shares after the Scheme Record Time will be required to transfer them to Western on the basis that they will receive the same number of New Western Shares to which they would have been entitled had their shares been subject to the Scheme.
It is expected that the Scheme will become effective in August 2010. The Scheme is subject to the Conditions and certain further terms referred to in Appendix 1 to this document. In particular, the Scheme requires the approval of Energybuild Shareholders (other than Western and members of the Western Group) by the passing of a resolution at the Court Meeting. The resolution must be approved by a majority in number of the Energybuild Shareholders entitled to vote and present and voting, either in person or by proxy, representing not less than three fourths in value of the Energybuild Shares held by such Energybuild Shareholders.
Implementation of the Scheme will also require the passing of the Special Resolution (requiring the approval of Energybuild Shareholders representing at least 75 per cent. of the votes cast at the General Meeting, which will be held immediately after the Court Meeting).
Following the Meetings, the Scheme and the related Reduction of Capital must be sanctioned by the Court and will only become effective upon delivery to the Registrar of Companies of a copy of the Order sanctioning the Scheme and, in relation to the Reduction of Capital, the registration of such Order by the Registrar of Companies.
If the Scheme becomes effective, the terms will be binding on all Scheme Shareholders irrespective of whether or not they attended or voted in favour of the Scheme at the Court Meeting or in favour of the Special Resolution at the General Meeting.
10. Cancellation of admission of Energybuild Shares to trading on AIM
Prior to, and subject to, the Scheme becoming effective, the London Stock Exchange will be requested to cancel trading in Energybuild Shares on AIM. The last day for dealings in Energybuild Shares on the AIM market of the London Stock Exchange is expected to be the Business Day immediately prior to the Effective Date and no transfers will be registered after 6:00 p.m. on that date.
On the Effective Date, share certificates in respect of the Energybuild Shares will cease to be valid and should be destroyed. In addition, entitlements to Energybuild Shares held within the CREST system will be cancelled on the Effective Date.
Upon completion of the Proposal, Western Shares will continue to be admitted to trading on AIM and listed on the Toronto Stock Exchange.
11. Disclosure of interests in Energybuild
As at the close of business on 8 June 2010, being the last practicable Business Day prior to the date of this announcement, the Western Group held 124,006,667 ordinary shares in Energybuild, representing 54.7 per cent. of the issued share capital of Energybuild.
Save as referred to above, none of Western (nor any of the Western Directors), nor, so far as Western is aware, any person deemed to be acting in concert with Western, has any interest in or right to subscribe for any Energybuild Shares or any securities convertible or exchangeable into Energybuild Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or any rights to subscribe for or purchase the same, or holds any options (including traded options) in respect of, or has any option to acquire, any Energybuild Shares or has entered into any derivatives referenced to Energybuild Shares ("Relevant Energybuild Securities") which remain outstanding, nor does any such person hold any short positions in relation to Relevant Energybuild Securities (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery, nor does any such person have any arrangement in relation to Relevant Energybuild Securities. An "arrangement" also includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Energybuild Securities which may be an inducement to deal or refrain from dealing in such securities.
"Interests in securities" is further explained in the paragraph headed Disclosure requirements of the Takeover Code in the summary to this Announcement.
Western confirms that it will today be making an Opening Position Disclosure pursuant to Rule 8.1(a) of the Takeover Code.
12. Overseas shareholders
The making of the Proposal in, or to persons resident in, or to nationals or citizens of, jurisdictions outside the United Kingdom or to nominees of, or custodians or trustees for, citizens or nationals of other countries ("Overseas Shareholders") may be prohibited or affected by the laws of the relevant jurisdictions.
Overseas Shareholders should inform themselves about, and observe, any applicable requirements in the relevant jurisdiction. It is the responsibility of each Overseas Shareholder to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, or the compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction. Any such Overseas Shareholder will be responsible for any such issue, transfer or other taxes or duties by whomsoever payable and Western and/or Energybuild (and any person acting on behalf of Western or Energybuild) shall be fully indemnified and held harmless by such Overseas Shareholder for any such issue, transfer or other taxes or duties or other requisite payments as Western and/or Energybuild (and any person acting on behalf of Western or Energybuild) may be required to pay.
Further details in relation to overseas shareholders will be contained in the Scheme Document.
13. Issued share capital
As at close of business on 8 June 2010, Energybuild confirms that it has 226,666,667 ordinary shares in issue (ISIN reference number GB00B1Z47571).
As at close of business on 8 June 2010, Western confirms that it has 336,359,383 shares in issue (including 72,122,826 Western Shares owned by Cambrian Mining Ltd, a wholly-owned subsidiary of Western) (ISIN reference number CA95801T1075).
Western is being advised by Cenkos Securities and its legal advisers are Trowers & Hamlins LLP. Energybuild is being advised by Arbuthnot Securities and its legal advisers are Charles Russell LLP.
14. General
This announcement is not intended to and does not constitute, or form part of, any offer to sell or invitation to purchase, otherwise acquire, subscribe, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Proposal or otherwise. The Proposal will be made solely through the Scheme Document and the Forms of Proxy, which will contain the full terms and conditions of the Proposal, including details of how to vote in respect of the Proposal. Any acceptance of or other response to the Proposal should be made only on the basis of the information in the Scheme Document.
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with the applicable requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by law, the companies involved in the Proposal disclaim any responsibility or liability for the violation of such restrictions by any person.
This announcement has been prepared for the purpose of complying with English law, the Takeover Code and the AIM Rules, and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.
Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Scheme Document and/or any other related document to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction before taking any action.
This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" concerning the Energybuild Group and the Western Group. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements. Energybuild and Western assume no obligation and do not intend to update these forward-looking statements, except as required pursuant to applicable law.
Cenkos Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Western and no one else in connection with the Proposal and will not be responsible to anyone other than Western for providing the protections afforded to customers of Cenkos Securities, nor for providing advice in relation to the Proposal or any other matters referred to in this announcement.
Arbuthnot Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority in the UK, is acting for Energybuild and no one else in connection with the Proposal and will not be responsible to anyone other than Energybuild for providing the protections afforded to customers of Arbuthnot Securities nor for providing advice in relation to the Proposal or any other matters referred to in this announcement.
The Proposal will be subject to the Conditions and certain further terms set out in Appendix I and the further terms and conditions set out in the Scheme Document when issued.
The bases and sources of certain information contained in this Announcement are set out in Appendix II.
Appendix III contains details of those persons who have given irrevocable undertakings or letters of intent to vote in favour of the Proposal.
Appendix IV contains the definitions of terms used in this announcement.
In accordance with Rule 19.11 of the Takeover Code and AIM Rule 26, a copy of this Announcement will be published on the following websites: www.energybuild.co.uk and www.westerncoal.com
Appendix I
Conditions to Implementation of the Proposal
1. The Proposal is conditional upon the Scheme becoming unconditional
and becoming effective, subject to the Takeover Code, by not later
than 30 September 2010 or such later date (if any) as Energybuild and
Western may, with the consent of the Panel, agree and the Court may
allow. The Scheme is conditional upon:
(a) the approval by a majority in number of the holders of
Energybuild Shares entitled to vote and present and voting,
either in person or by proxy, at the Court Meeting (or any
adjournment thereof), representing three fourths in value of
the Energybuild Shares of such holders;
(b) the resolutions set out in the notice of the General Meeting
required to approve and implement the Scheme being duly passed
by the requisite majority at the General Meeting (or any
adjournment thereof);
(c) the Court Sanction being obtained (with or without
modifications, but subject to any such modifications being on
terms acceptable to Energybuild and Western) and a copy of the
Order being delivered for registration to the Registrar of
Companies;
(d) confirmation of the Reduction of Capital by the Court (with or
without modification, but subject to any such modifications
being on terms acceptable to Energybuild and Western), and a
copy of the Reduction Court Order and a minute of such
reduction attached thereto being filed with the Registrar of
Companies and registered by him; and
(e) admission of the New Western Shares to trading on AIM becoming
effective in accordance with the AIM Rules or if Western so
determines (subject to the consent of the Panel) the London
Stock Exchange agreeing to admit such shares to trading on AIM
subject to the allotment of such New Western Shares and/or the
Scheme becoming or being declared unconditional in all
respects;
(f) permission being granted for the admission of the New Western
Shares to listing and posting for trading on the TSX.
2. Western and Energybuild have also agreed that, subject to sections 3
and 4 below, the Scheme is conditional upon the following matters,
and, accordingly, the necessary action to make the Scheme effective
will not be taken unless such Conditions (as amended if appropriate)
have been satisfied or waived:
(a) Authorisations
(i) all Authorisations in any jurisdiction which Western
or Energybuild reasonably deem necessary for or in
respect of the Proposal, its implementation or any
acquisition of any shares in Energybuild or any other
member of the Wider Energybuild Group by any member of
the Wider Western Group having been obtained in terms
and in a form satisfactory to Western and Energybuild
acting reasonably from any relevant person or
authority or from any person or body with whom any
member of the Wider Energybuild Group or Wider Western
Group has entered into contractual arrangements (which
are material in the context of the Western Group or
the Energybuild Group, as applicable) and all such
Authorisations remaining in full force and effect and
there being no intimation of any intention to revoke
or not renew the same; and
(ii) all material Authorisations necessary to carry on the
business of (a) any member of the Wider Energybuild
Group and (b) any member of the Wider Western Group
remaining in full force and effect and there being no
notification of any intention to revoke or not to
renew the same; and
(iii) all necessary filings, or applications having been
made and all applicable waiting and other periods
(including extensions of such periods) having expired,
lapsed or been terminated and all applicable statutory
or regulatory obligations in any jurisdiction in
respect of the Proposal having been complied with, in
each case, in respect of the acquisition of any shares
in Energybuild by Western.
(b) Regulatory Intervention
Save as Disclosed, no government or governmental, quasi-
governmental, supranational, statutory or regulatory body or
association, institution or agency (including any trade agency)
or any court or other body (including any professional or
environmental body) or person in any relevant jurisdiction
(each a "Relevant Authority") having taken, instituted,
implemented or threatened any legal proceedings, or having
required any action to be taken or otherwise having done
anything or having enacted, made or proposed any statute,
regulation, order or decision or taken any other step and there
not continuing to be outstanding any statute, regulation, order
or decision that would or might reasonably be expected to (in
each case to an extent which is material and adverse in the
context of the Wider Energybuild Group or the Wider Western
Group (as the case may be) taken as a whole):
(i) make the Proposal, its implementation or the
acquisition or proposed acquisition of any shares in,
or management of, the Wider Energybuild Group by
Western illegal, void or unenforceable under the laws
of any relevant jurisdiction; or
(ii) prevent, prohibit or otherwise restrict, restrain,
delay or interfere with the implementation of, or
impose additional conditions or obligations with
respect to or otherwise challenge or require amendment
of, the Proposal or the proposed acquisition of
Energybuild by Western or any acquisition of
Energybuild Shares by Western; or
(iii) require, prevent or delay the divestiture (or alter
the terms of any proposed divestiture), by Western of
any shares or other securities in Energybuild; or
(iv) impose any limitation on the ability of any member of
the Wider Western Group to acquire or hold or exercise
effectively, directly or indirectly, any rights of
ownership of shares or other securities or the
equivalent in any member of the Wider Energybuild
Group or to exercise management control over any
member of the Wider Energybuild Group taken as a
whole; or
(v) require, prevent or delay the disposal by Western or
any member of the Wider Western Group or Energybuild
or any member of the Wider Energybuild Group, of all
or any part of their respective businesses, assets or
properties or impose any limitation on the ability of
any of them to conduct their respective businesses or
own their respective assets or properties; or
(vi) require any member of the Wider Western Group to offer
to acquire any shares or other securities (or the
equivalent) in any member or any other assets of the
Wider Energybuild Group owned by any third party (in
each case, other than in implementation of the
Proposal); or
(vii) impose any material limitation on the ability of any
member of the Wider Western Group or the Wider
Energybuild Group to integrate or co-ordinate its
business, or any part of it, with the businesses or
any part of the businesses of any other member of the
Wider Energybuild Group; or
(viii) result in any member of the Wider Western Group or the
Wider Energybuild Group ceasing to be able to carry on
business under any name under which it presently does
so; or
(ix) (save as related to matters that generally affect
entities conducting similar businesses) otherwise
adversely affect any or all of the businesses, assets
or financial condition or trading position or profits
or prospects of any member of the Wider Energybuild
Group;
and all applicable waiting and other time periods during which
any such Relevant Authority in any relevant jurisdiction could
institute, or implement or threaten any legal proceedings,
having expired, lapsed or been terminated.
(c) Consequences of the Proposal
Save as Disclosed, there being no provision of any agreement to
which any member of the Wider Energybuild Group is a party, or
by or to which any such member, or any part of their assets, is
or may be bound, entitled or subject, which would as a
consequence of the Proposal or of the acquisition or proposed
acquisition of all or any part of the issued share capital of,
or change of management of, Energybuild or any other member of
the Energybuild Group result in (in each case to an extent
which is material and adverse in the context of the Wider
Energybuild Group taken as a whole):
(i) any material assets or interests of any member of the
Wider Energybuild Group being or failing to be
disposed of or charged in any way or ceasing to be
available to any member of the Wider Energybuild Group
or any rights arising under which any such asset or
interest could be required to be disposed of or
charged in any way or could cease to be available to
any member of the Wider Energybuild Group; or
(ii) any monies borrowed by, or other indebtedness (actual
or contingent) of, or any grant available to, any
member of the Wider Energybuild Group being or
becoming repayable or capable of being declared
repayable immediately or earlier than the repayment
date stated in such agreement or the ability of such
member of the Wider Energybuild Group to incur any
such borrowing or indebtedness becoming or being
capable of becoming withdrawn, inhibited or
prohibited; or
(iii) any such agreement or the rights, liabilities,
obligations or interests of any such member under it
being terminated or materially and adversely modified
or affected or any onerous obligation arising or any
material adverse action being taken under it; or
(iv) the interests or business of any such member in or
with any third party (or any arrangements relating to
any such interests or business) being terminated or
adversely modified or affected; or
(v) the financial or trading position or prospects or
value of any member of the Wider Energybuild Group
being materially prejudiced or materially and
adversely affected; or
(vi) the creation of any mortgage, charge or other security
interest over the whole or any part of the business,
property or assets of any member of the Wider
Energybuild Group or any such security (whenever
arising or having arisen) becoming enforceable or
being enforced; or
(vii) any member of the Wider Energybuild Group ceasing to
be able to carry on business under any name under
which or on the terms on which it currently does so or
any person presently not able to carry on business
under any name under which any member of the Wider
Energybuild Group currently carries on business
becoming able to do so; or
(viii) the creation of actual or contingent material
liabilities by any member of the Wider Energybuild
Group other than in the ordinary course of trading; or
(ix) the ability of any member of the Wider Energybuild
Group to carry on its business being materially and
adversely affected,
and no event having occurred which, under any provision of any
such agreement to which any member of the Wider Energybuild
Group is a party, or by or to which any such member, or any of
its assets, may be bound, entitled or subject above, could
result in any of the events or circumstances as are referred to
in sub-paragraphs (i) to (ix) above inclusive.
(d) No Corporate Action Taken Since the Accounting Date
(Energybuild)
Since the Accounting Date, save as otherwise Disclosed or
pursuant to transactions in favour of Energybuild or a
subsidiary of Energybuild or in connection with the Proposal,
no member of the Wider Energybuild Group having (in each case
to an extent which is material and adverse in the context of
the Wider Energybuild Group taken as a whole):
(i) issued or agreed to issue or authorised or proposed
the issue or grant of additional shares of any class
or securities convertible into or exchangeable for, or
rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities
(save for the issue of Energybuild Shares on the
exercise of Disclosed Energybuild share options or
warrants or pursuant to the Employee Share Plan); or
(ii) redeemed, purchased, repaid or reduced or announced
the redemption, purchase, repayment or reduction of
any part of its share capital or other securities or
made, authorised or proposed or announced the making
of any other change to its share or loan capital; or
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend, bonus
issue or other distribution whether payable in cash or
otherwise, other than dividends lawfully paid to
Energybuild or wholly owned subsidiaries of
Energybuild; or
(iv) (save for transactions between two or more members of
the Energybuild Group) merged or demerged with or
from, or acquired, any body corporate or authorised or
proposed or announced any intention to propose any
such merger or demerger; or
(v) other than in the ordinary course of business,
acquired or disposed of, transferred, mortgaged or
charged, or created or granted any security interest
over, any material assets (including shares and trade
investments) or authorised or proposed or announced
any intention to propose any acquisition, disposal,
transfer, mortgage, charge or creation or grant of any
such security interest; or
(vi) (save for transactions between two or more members of
the Energybuild Group) issued or authorised or
proposed the issue of any debentures or incurred or
increased any borrowings, indebtedness or liability
(actual or contingent); or
(vii) entered into or varied, or authorised or proposed the
entry into or variation of, or announced its intention
to enter into or vary, any transaction, arrangement,
contract or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term,
onerous or unusual nature or magnitude and/or which is
restrictive to the existing business of any member of
the Wider Energybuild Group (other than to a nature
and extent which is normal in the context of the
business concerned) which is in any such case material
in the context of the Wider Energybuild Group taken as
a whole; or
(viii) entered into, implemented, effected, authorised or
proposed or announced its intention to enter into,
implement, effect, authorise or propose any material
contract, reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement other
than in the ordinary course of business; or
(ix) waived or compromised any material claim (other than
in the ordinary course of business); or
* entered into or varied or made any offer (which
remains open for acceptance) to enter into or vary the
terms of any material contract with any of the
directors or senior executives of Energybuild or any
of the directors or senior executives of any other
member of the Wider Energybuild Group; or
(xi) taken or proposed any corporate action or had any
legal proceedings instituted or threatened against it
or petition presented for its winding-up (voluntary or
otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of
all or any material part of its assets and revenues or
for any analogous proceedings or steps in any
jurisdiction or for the appointment of any analogous
person in any jurisdiction; or
(xii) been unable, or admitted in writing that it is unable,
to pay its debts or has stopped or suspended (or
threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on
all or a substantial part of its business; or
(xiii) made any material alteration to its memorandum or
articles of association, or other incorporation
documents; or
(xiv) entered into any agreement or passed any resolution or
made any offer (which remains open for acceptance) or
proposed or announced any intention with respect to
any of the transactions, matters or events referred to
in this condition 2(d) other than in the ordinary
course of business.
(e) Other Events Since the Accounting Date (Energybuild)
In the period since the Accounting Date, save as Disclosed:
(i) no litigation or arbitration proceedings, prosecution,
investigation or other legal proceedings having been
announced, instituted, threatened or remaining
outstanding by, against or in respect of, any member
of the Wider Energybuild Group or to which any member
of the Wider Energybuild Group is or may become a
party (whether as claimant, defendant or otherwise)
which in any case, would be likely to have a material
adverse effect on the financial position of the Wider
Energybuild Group; and
(ii) no event, change or condition has occurred or become
known to Energybuild in the business or assets or
financial or trading position, assets, liabilities or
profits or prospects of any member of the Wider
Energybuild Group which is material in the context of
the Wider Energybuild Group taken as a whole; and
(iii) no enquiry or investigation by, or complaint or
reference to, any relevant person or authority against
or in respect of any member of the Wider Energybuild
Group having been threatened, announced, implemented
or instituted or remaining outstanding by, against or
in respect of, any member of the Wider Energybuild
Group which in any case, would be likely to have a
material adverse effect on the financial position of
the Wider Energybuild Group taken as a whole; and
(iv) no contingent or other liability having arisen or
become apparent or increased which in any case, would
be likely to have a material adverse effect on the
financial position of the Wider Energybuild Group
taken as a whole.
(f) No Corporate Action Taken Since the Accounting Date (Western)
Since the Accounting Date, save as otherwise Disclosed or
pursuant to transactions in favour of Western or a wholly owned
subsidiary of Western in connection with the Proposal, no
member of the Wider Western Group having (in each case to an
extent which is material and adverse in the context of the
Wider Western Group taken as a whole):
(i) issued or agreed to issue or authorised or proposed
the issue or grant of additional shares of any class
or securities convertible into or exchangeable for, or
rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities
(save for the issue of Western Shares on the exercise
of Disclosed Western options or warrants; or
(ii) redeemed, purchased, repaid or reduced or announced
the redemption, purchase, repayment or reduction of
any part of its share capital or other securities or
made authorised or proposed or announced the making of
any other change to its share or loan capital; or
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend, bonus
issue or other distribution whether payable in cash or
otherwise, other than dividends lawfully paid to
Western or wholly owned subsidiaries of Western; or
(iv) (save for transactions between two or more members of
the Western Group) merged or demerged with or from, or
acquired, any body corporate or authorised or proposed
or announced any intention to propose any such merger
or demerger; or
(v) other than in the ordinary course of business acquired
or disposed of, transferred, mortgaged or charged, or
created or granted any security interest over, any
material assets (including shares and trade
investments) or authorised or proposed or announced
any intention to propose any acquisition, disposal,
transfer, mortgage, charge or creation or grant of any
such security interest; or
(vi) (save for transactions between two or more members of
the Western Group) issued or authorised or proposed
the issue of any debentures or incurred or increased
any borrowings, indebtedness or liability (actual or
contingent); or
(vii) entered into or varied, or authorised or proposed the
entry into or variation of, or announced its intention
to enter into or vary, any transaction, arrangement,
contract or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term,
onerous or unusual nature or magnitude and/or which is
restrictive to the existing business of any member of
the Wider Western Group (other than to a nature and
extent which is normal in the context of the business
concerned) which is in any such case material in the
context of the Wider Western Group taken as a whole;
or
(viii) entered into, implemented, effected, authorised or
proposed or announced its intention to enter into,
implement, effect, authorise or propose any material
contract, reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement other
than in the ordinary course of business; or
(ix) waived or compromised any material claim (other than
in the ordinary course of business); or
* entered into or varied or made any offer (which
remains open for acceptance) to enter into or vary the
terms of any material contract with any of the
directors or senior executives of Western or any of
the directors or senior executives of any other member
of the Wider Western Group; or
(xi) taken or proposed any corporate action or had any
legal proceedings instituted or threatened against it
or petition presented for its winding-up (voluntary or
otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of
all or any material part of its assets and revenues or
for any analogous proceedings or steps in any
jurisdiction or for the appointment of any analogous
person in any jurisdiction; or
(xii) been unable, or admitted in writing that it is unable,
to pay its debts or has stopped or suspended (or
threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on
all or a substantial part of its business; or
(xiii) made any material alteration to its notice of
articles, or articles or other incorporation
documents; or
(xiv) entered into any agreement or passed any resolution or
made any offer (which remains open for acceptance) or
proposed or announced any intention with respect to
any of the transactions, matters or events referred to
in this condition 2(f) other than in the ordinary
course of business.
(g) Other Events Since the Accounting Date (Western)
In the period since the Accounting Date, save as Disclosed:
(i) no litigation or arbitration proceedings, prosecution,
investigation or other legal proceedings having been
announced, instituted, threatened or remaining
outstanding by, against or in respect of, any member
of the Wider Western Group or to which any member of
the Wider Western Group is or may become a party
(whether as claimant, defendant or otherwise) which in
any case, would be likely to have a material adverse
effect on the financial position of the Wider Western
Group; and
(ii) no event, change or condition has occurred or become
known to Western in the business or assets or
financial or trading position, assets, liabilities or
profits or prospects of any member of the Wider
Western Group which is material in the context of the
Wider Western Group taken as a whole; and
(iii) no enquiry or investigation by, or complaint or
reference to, any relevant person or authority against
or in respect of any member of the Wider Western Group
having been threatened, announced, implemented or
instituted or remaining outstanding by, against or in
respect of, any member of the Wider Western Group
which in any case, would be likely to have a material
adverse effect on the financial position of the Wider
Western Group taken as a whole; and
(iv) no contingent or other liability having arisen or
become apparent or increased which in any case, would
be likely to have a material adverse effect on the
financial position of the Wider Western Group taken as
a whole.
(h) Other Issues (Energybuild)
Save as Disclosed, Western not having discovered that (in each
case to an extent which is material and adverse in the context
of the Wider Energybuild Group taken as a whole):
(i) the financial, business or other information disclosed
at any time by any member of the Wider Energybuild
Group whether publicly or in the context of the
Proposal either contained a material misrepresentation
of fact or omitted to state a fact necessary to make
the information disclosed not misleading in any
material respect; or
(ii) any past or present member of the Wider Energybuild
Group has failed to comply with any applicable
legislation or regulations of any relevant
jurisdiction with regard to the release of any
contaminant, or that there has otherwise been any such
release (whether or not the same constituted
noncompliance by any person with any such legislation
or regulation, and wherever the same may have taken
place), any of which would be reasonably likely to
give rise to any liability (whether actual or
contingent) or cost on the part of any member of the
Wider Energybuild Group which is material in the
context of the Wider Energybuild Group taken as a
whole; or
(iii) there is or is reasonably likely to be any liability
(whether actual or contingent) to make good, repair,
reinstate or clean up any property now or previously
owned, occupied, operated or made use of or controlled
by any past or present member of the Wider Energybuild
Group, or in which any such member may now have or
previously had an interest under any environmental law
or order of any relevant person or third party or
otherwise and which is material in the context of the
Wider Energybuild Group taken as a whole.
(i) Other Issues (Western)
Save as Disclosed, Energybuild not having discovered that (in
each case to an extent which is material and adverse in the
context of the Wider Western Group taken as a whole):
(i) the financial, business or other information disclosed
at any time by any member of the Wider Western Group,
whether publicly or in the context of the Proposal
either contained a material misrepresentation of fact
or omitted to state a fact necessary to make the
information disclosed not misleading in any material
respect; or
(ii) any past or present member of the Wider Western Group
has failed to comply with any applicable legislation
or regulations of any relevant jurisdiction with
regard to the release of any contaminant, or that
there has otherwise been any such release (whether or
not the same constituted noncompliance by any person
with any such legislation or regulation, and wherever
the same may have taken place), any of which would be
reasonably likely to give rise to any liability
(whether actual or contingent) or cost on the part of
any member of the Wider Western Group which is
material in the context of the Wider Western Group
taken as a whole; or
(iii) there is or is reasonably likely to be any liability
(whether actual or contingent) to make good, repair,
reinstate or clean up any property now or previously
owned, occupied, operated or made use of or controlled
by any past or present member of the Wider Western
Group, or in which any such member may now have or
previously had an interest under any environmental law
or order of any relevant person or third party or
otherwise and which is material in the context of the
Wider Western Group taken as a whole.
3. Subject to the requirements of the Panel, Western reserves the right
to waive all or any of the Conditions contained in paragraphs 2(a); 2
(b) and 2(c); 2(d); 2(e); and 2(h), in whole or in part.
4. Subject to the requirements of the Panel, Energybuild reserves the
right to waive all or any of the Conditions contained in paragraphs 2
(a); 2(b) and 2(c); 2(f); 2(g); and 2(i), in whole or in part.
5. The Proposal is governed by English law and is subject to the
jurisdiction of the English courts. The rules of the Takeover Code,
so far as they are appropriate, apply to the Proposal.
6. If the Scheme is effected, the Energybuild Shares will be acquired by
Western fully paid and free from all liens, charges, equitable
interests, encumbrances, rights of pre-emption and any other rights
and interests of any nature whatsoever and together with all rights
now and hereafter attaching thereto, including voting rights and the
right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date of
this announcement.
7. The New Western Shares will be issued credited as fully paid and will
rank pari passu in all respects with the Western Shares in issue at
the time the New Western Shares are delivered pursuant to the
Proposal, including the right to receive and retain dividends and
other distributions (if any) paid by reference to a record date on or
after the Effective Date. Application will be made for the admission
of the New Western Shares to trading on AIM and the TSX, on the first
Dealing Day after the Effective Date.
8. Western reserves the right, subject to the consent of the Panel, to
elect to implement the Proposal by way of a takeover offer. In such
event, such offer will be implemented on the same terms subject to
appropriate amendments, including (without limitation) an acceptance
condition set at ninety per cent of the Energybuild Shares to which
such offer relates (or such lower percentage as Western may decide),
so far as applicable, as those which would apply to the Scheme.
9. Western shall be under no obligation to waive or treat as satisfied,
and Energybuild shall be under no obligation to waive or treat as
satisfied any of the Conditions in paragraph 2 by a date earlier than
the latest date for satisfaction thereof, notwithstanding that the
other Conditions of the Proposal may at such earlier date have been
waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of the Conditions may not be
capable of fulfilment.
Appendix II
Bases and sources
1. The premia represented by the consideration due under the Proposal
over the average ratio of the Closing Prices of a Western Share and
an Energybuild Share over the one month and the six months prior to
the date of this announcement are based on the premium of the
consideration due under the Proposal over the simple average of the
ratios of the Closing Prices of Western Shares and Energybuild Shares
for each Dealing Day from 9 May 2010 to 8 June 2010 and 9 December
2009 to 8 June 2010, respectively.
2. The calculation of approximately 8.6 million New Western Shares to be
issued pursuant to the Proposal is based upon 102,660,000 Energybuild
Shares (being Energybuild's undiluted share capital excluding
Energybuild Shares owned by the Western Group on 8 June 2010, the
last Business Day prior to the date of this announcement) multiplied
by 0.0833 (and assumes no further issue of Energybuild Shares prior
to completion of the Proposal).
3. References to percentages of Energybuild Shares (before the Proposal)
are based on the number of Energybuild Shares in issue as at the
close of business on 8 June 2010, being the last Business Day prior
to the date of this announcement, and do not include any shares
issuable pursuant to any options, warrants or other convertible
securities in Energybuild.
4. The percentage holding of Energybuild Shareholders (excluding the
Western Group) in Western on completion of the Proposal is based on
the current undiluted ordinary share capital of Western as at the
close of business on 8 June 2010, being the last Business Day prior
to the date of this announcement and the New Western Shares to be
issued as set out in (2) above (assuming no further issue of
Energybuild Shares or Western Shares prior to completion of the
Proposal).
Appendix III
Details of Irrevocable Undertakings and Letters of Intent
The following holders of Energybuild Shares have given irrevocable undertakings to vote in favour of the Proposal:
Name Number of Percentage of issued
Energybuild share capital of
Shares Energybuild
Colin Cooke 303,667 0.13%
Thomas David Button 0 0.00%
Robert Morgan 3,166,667 1.40%
Morgan Rhidian Davies 3,175,000 1.40%
Karl Picton Jones 0 0.00%
Majedie Asset Management Limited 19,802,218 8.74%
---------------------------------------
26,447,552 11.67%
---------------------------------------
In respect of the undertakings given by the Energybuild Independent Directors, these undertakings will cease to be binding only if the Scheme lapses or otherwise ceases to be capable of becoming effective or is withdrawn, and will remain binding in the event that a higher competing offer for Energybuild is made.
In respect of the undertaking given by Majedie Asset Management Limited, this undertaking will cease to be binding if a competing offer is made or announced with a value which represents an improvement of 10 per cent or more in the value of the consideration offered by Western and Western fails to submit a revised offer within 10 Business Days of the announcement of such competing offer which either equals or exceeds the value of such competing offer, or if the recommendation of the Proposal by the Energybuild Independent Directors is withdrawn, or if the Scheme lapses or otherwise ceases to be capable of becoming effective or is withdrawn.
The following holders of Energybuild Shares have given letters of intent to vote in favour of the Proposal in respect of the Energybuild Shares held by them as at the record time for the Meetings:
Name Number of Percentage of issued
Energybuild share capital of
Shares Energybuild
currently held
Blackrock Investment Management
(UK) Limited 11,209,440 4.95%
Henderson Global Investors Limited 8,416,665 3.71%
Invesco Asset Management Limited 5,074,789 2.24%
---------------------------------------
24,700,894 10.90%
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Appendix IV
Definitions
2006 Act the Companies Act 2006 (as amended)
Accounting Date means, in relation to Energybuild, 31 March 2010;
and means, in relation to Western, 31 March 2009
Admission admission of the New Western Shares to trading on
AIM becoming effective in accordance with the AIM
Rules and listing and posting for trading of the
New Western Shares on the TSX becoming effective in
accordance with the TSX Rules
AIM the AIM market operated by the London Stock
Exchange
AIM Rules the AIM rules for Companies published by the London
Stock Exchange governing, inter alia, admission to
AIM and the continuing obligations of companies
admitted to AIM, as amended from time to time
Arbuthnot Securities Arbuthnot Securities Limited, the investment
banking subsidiary of Arbuthnot Banking Group plc
Articles the articles of association of Energybuild
Authorisations authorisations, orders, grants, recognitions,
confirmations, consents, licences, clearances,
certificates, permissions or approvals
Business Day any day on which banks are generally open in
England and Wales for the transaction of business
other than a Saturday or Sunday or public holiday
Cambrian Shares the 72,122,826 non-voting shares in Western held by
Cambrian Mining Limited
Cenkos Securities Cenkos Securities plc
Closing Price the closing middle market quotation of one
Energybuild Share and/or one Western Share, as
applicable, as provided by the daily official list
of the London Stock Exchange
Conditions the conditions to the implementation of the
Proposal (including the Scheme), which are set out
in Appendix I of this announcement
Consideration the New Western Shares to be issued to the Scheme
Shareholders pursuant to the Scheme
Court the High Court of Justice in England and Wales
Court Hearing the hearing by the Court of the application to
sanction the Scheme and confirm the Reduction of
Capital
Court Meeting the meeting of Energybuild Shareholders (other than
Western and members of the Western Group) convened
by order of the Court pursuant to section 899 of
the 2006 Act to consider and, if thought fit,
approve the Scheme, including any adjournment
thereof
Court Sanction the sanction (with or without modification) of the
Scheme by the Court
CREST the relevant system defined in the CREST
Regulations in respect of which Euroclear is the
operator (as defined in the CREST Regulations)
CREST Regulations the Uncertificated Securities Regulations 2001 (SI
2001 No. 3755), including any modifications thereof
or any regulations in substitution thereof made
under section 207 of the Companies Act 1989 and for
the time being in force.
Dealing Day a day on which the London Stock Exchange is open
for business in the trading of securities admitted
to AIM
Disclosed (i) as disclosed in the Energybuild Annual Report
or the Western Annual Report; or
(ii) as publicly announced by any member of the
Wider Energybuild Group or the Wider Western
Group (through a Regulatory Information
Service or any other information service made
available in the country where the relevant
company is listed) up to and including the
date of this announcement; or
(iii) as otherwise fairly disclosed in writing
(including facsimile) to Western or its
advisers by or on behalf of Energybuild up to
and including the date of this announcement;
or
(iv) as otherwise fairly disclosed in writing
(including by facsimile) to Energybuild or
its advisers by or on behalf of Western up to
and including the date of this announcement
Effective Date the date on which the Scheme becomes effective in
accordance with its terms
Employee Share Plan the share incentive plan adopted by Energybuild on
17 April 2008
Energybuild Energybuild Group Plc, company number 5451235
Energybuild Annual the audited consolidated report and accounts of
Report Energybuild for the period ended on the Accounting
Date
Energybuild Director a director of Energybuild
Energybuild Group Energybuild and its subsidiary undertakings
Energybuild the Energybuild Directors, excluding Braam Jonker
Independent Directors
Energybuild Shares ordinary shares of 10 pence each in the capital of
Energybuild
Energybuild holder(s) of Energybuild Shares
Shareholders
Enlarged Group Western Group as enlarged by the acquisition of the
Energybuild Group, subject to the Scheme becoming
effective
Financial Services the Financial Services Authority acting in its
Authority capacity as the competent authority for the
purposes of Part VI of the Financial Services and
Markets Act 2000
General Meeting the general meeting of Energybuild to consider any
resolution required to approve and implement the
Scheme and the Proposal, including any adjournment
thereof
Hearing Date the date of the Court Hearing
London Stock London Stock Exchange plc
Exchange
Meetings the Court Meeting and the General Meeting
New Western Shares the new Western Shares proposed to be issued by
Western (credited as fully paid) as consideration
under the Proposal
Offer recommended proposal for the acquisition of
Energybuild by Western
Offer Period the period commencing on the date of this
announcement and ending on the Effective Date
Options the outstanding options to subscribe for
Energybuild Shares
Orders the Scheme Court Order and the Reduction Court
Order
Panel the Panel on Takeovers and Mergers
Proposal the Scheme and other matters to be considered at
Meetings
Reduction Court the order of the Court confirming the Reduction of
Order Capital
Reduction of Capital the reduction of the share capital of Energybuild
under section 641 of the 2006 Act by the
cancellation and extinguishing of the Scheme
Shares, to be effected as part of the Scheme
Registrar of the Registrar of Companies in England and Wales
Companies
Regulatory any of the services on the list of Regulatory
Information Service Information Services maintained by the Financial
Services Authority
Scheme the proposed scheme of arrangement under section
899 of the 2006 Act between Energybuild and holders
of its Scheme Shares, with or subject to any
modification or addition thereto or condition
approved or imposed by the Court and agreed by
Western and Energybuild
Scheme Court Order the Court order sanctioning the Scheme
Scheme Document the document to be sent to Energybuild Shareholders
relating to the Proposal
Scheme Record Date the Business Day immediately preceding the Hearing
Date
Scheme Record Time 6.00 p.m. on the Scheme Record Date
Scheme Shares means all the Energybuild Shares (except those held
by the Western Group):
(i) in issue at the date of the Scheme;
(ii) (if any) issued after the date of the Scheme
and prior to the Voting Record Time;
(iii) (if any) issued at or after the Voting Record
Time and before the Scheme Record Time, on
terms that shares are issued subject to the
terms of the Scheme and the holder shall be
bound by the Scheme or in respect of which
the holder shall have agreed in writing by
such time to be bound by the Scheme
Scheme Shareholders a person who appears as a holder of Scheme Shares
in the register of members of Energybuild at the
Scheme Record Time
Special Resolution the special resolution to be proposed by
Energybuild at the General Meeting in connection
with, inter alia, the approval of the Scheme and
the Reduction of Capital
Takeover Code the City Code on Takeovers and Mergers
third party includes person, firm, company or body
TSX Toronto Stock Exchange
UK or United Kingdom the United Kingdom of Great Britain and Northern
Ireland
uncertificated or recorded on the relevant register as being held in
in uncertificated uncertificated form in CREST and title to which by
form virtue of the CREST Regulations may be transferred
by means of CREST
Voting Record Time in relation to both the Court Meeting and the
General Meeting, 6.00 p.m. on the day prior to the
day immediately preceding the Court Meeting or, if
either the Court Meeting or the General Meeting is
adjourned, 6:00 pm on the day prior to the day
immediately before the adjourned meeting
Warrants the outstanding warrants to subscribe for
Energybuild Shares
Western Western Coal Corp., a company incorporated in the
Province of British Columbia, Canada, with
registered number 551375
Western Annual the audited consolidated report and accounts of
Report Western for the period ended on the Accounting Date
Western Director a director of Western
Western Group Western and its subsidiaries (for the avoidance of
doubt, excluding the Energybuild Group)
Western Shares means the common shares in the capital of Western
Western Shareholders the holders of Western Shares
Wider Energybuild Energybuild, its subsidiary undertakings and its
Group associated undertakings
Wider Western Group Western, its subsidiary undertakings and its
associated undertakings for the avoidance of doubt,
excluding the Wider Energybuild Group from the
Effective Date
For the purposes of this announcement, "subsidiary", "subsidiary undertaking" and "associated undertaking" have the respective meanings given to such terms in the 2006 Act.
For further information: Enquiries in relation to Energybuild please contact: Energybuild Group Plc: Colin Cooke, Rhidian Davies, + 44 (0) 1639 722 400; Arbuthnot Securities Limited: James Steel, Ed Groome, + 44 (0) 20 7012 2000; St Brides Media & Finance Limited, Hugo de Salis, Paul Youens, + 44 (0) 207 236 1177; For further information on Energybuild, visit www.energybuild.co.uk; Enquiries in relation to Western please contact: Western Coal Corp.: David Jan, Director, Investor Relations, (604) 694-2891, [email protected]; Cenkos Securities plc: Nicholas Wells, Ivonne Cantu, + 44 (0) 207 397 8980; Buchanan Communications: Bobby Morse, Katharine Sutton, +44 (0) 20 7466 5000; For further information on Western, visit www.westerncoal.com
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