Bushveld takes holding in Vametco to 75pc through $20m transaction

The AIM-traded firm said that on completion of the acquisition, it had increased its indirect beneficial interest in Vametco from 59.1% to 75%.

It confirmed it had acquired all of Sojitz' shareholding interest and accompanying rights in SMC, the 75% owner of Vametco, with the $20m consideration payable comprising $17.5m in cash for the sale shares, and $2.5m in cash in full and final settlement of accrued but unpaid dividends on the sale shares.

Following completion of the transaction Bushveld - through its wholly-owned subsidiary Bushveld Vametco - would own 100% of SMC and therefore have an indirect beneficial interest of 75% in Vametco.

Bushveld said it used its existing cash resources to complete the acquisition.

“This acquisition is a significant achievement as it fulfils the company's undertaking to simplify its corporate structure in order to increase exposure to the underlying cash flows at Vametco,” said Bushveld Minerals chief executive officer Fortune Mojapelo.

“Vametco's strong cash generation capabilities are demonstrated by the revenue and EBITDA generated in the first half of 2018 of ZAR 1.05bn and ZAR 521m - an increase of 139.1% and 429.6% respectively - compared to the first half of 2017.

“The transaction is in line with our priorities laid out earlier this year as part of the $22m placing, and sets the company in an advantageous position to deliver on its strategy to grow into a significant, low-cost vertically integrated vanadium platform.”