northam gold elb

Since the beginning of the year, ELB Group has undertaken a number of restructuring initiatives.

However, despite the implementation of these initiatives, the ELB Group continues to face challenges, in particular in ELB Engineering Services where new business forecasts have not been achieved.

This led to this business entering voluntary business rescue as announced on the Stock Exchange News Service of the JSE (SENS) on 6 April 2020.

Furthermore, as a result of the ongoing downturn in the construction sector and the impact of the COVID-19 lockdown, the remaining ELB Group businesses are expected to be loss making in the current financial year and will require further external funding support.

In this context, the Board has resolved that ELB can no longer justify the costs and associated administrative burden of a JSE listing and furthermore will be better able to secure continued funding support for its operations in an unlisted environment.

As a result of the reduced size of the ELB Group, in terms of both operations and market capitalisation, ELB’s Shares have become highly illiquid on the JSE and the Scheme or General Offer, as the case may be, is therefore also intended to provide Eligible Shareholders with an exit opportunity at a fair price, which may otherwise not be forthcoming in the current economic
climate and in particular as it relates to the sectors in which the ELB Group operates.

The share buyback will cost ELB approximately R48 500 000, comprising the Scheme Consideration, or General Offer Consideration, as the case may be, plus estimated Transaction expenses.

The offer price of R2.00 per Share is a 66.67% premium to the closing price on the date preceding this Firm Intention Announcement and a 57.48% premium to the weighted average traded price over the 30 business days preceding the date of this Firm Intention Announcement.