Central Rand Gold, which owns ageing gold mines and prospecting areas around Johannesburg, has signed a sale agreement with Hiria Group Company, a Hong Kong registered company that may result in the sale of all its assets for $150 million (R1.7 billion).
Central Rand Gold signed a non-binding memorandum of understanding (MOU), which contemplates the potential disposal of 100% of the shares held by Central Rand Gold in its wholly-owned Netherlands subsidiary to Hiria. The subsidiary owns the assets of the Central Rand Gold Group.
The MOU, which provides the framework to enable Hiria to undertake detailed due diligence on the subsidiary and its assets, is the result of recent detailed discussions between Central Rand Gold and Hiria.
It is subject to a number of conditions including mutual completion of due diligence by both Central Rand Gold and Hiria; Central Rand Gold obtaining all necessary regulatory and exchange approvals for the potential sale of the subsidiary; Hiria obtaining relevant regulatory approvals; and the entering into a formal share sale agreement for the sale of the Subsidiary.
Hiria has provided a high level representation to the Board that it has the resources and ability to effect the Transaction. As part of the due diligence process, Central Rand Gold will undertake a detailed due diligence on Hiria, including a review of Hiria’s financing capabilities.
Central Rand Gold and Hiria have agreed to a target completion date of 31 March 2015 for the finalisation of all required due diligence and the execution of a share sale agreement.
However, the company said in a statement that “There can be no certainty that the potential sale of the Subsidiary to Hiria will be completed. The MOU with Hiria is not exclusive and the board will continue to engage with other parties who have recently expressed an interest to better understand the assets of Central Rand Gold.”