JSE-listed construction materials supplier Afrimat has offered remaining shareholders of South African resources group Infrasors 35c a share to acquire their shareholding in the company, the same price at which it bought the initial 50.7% interest from Hanchurch Asset Management and retiring Infrasors management for R33-million.
As a result of Afrimat’s holding of Infrasors surpassing 35% of the issued ordinary share capital, it was required, in terms of Section 123 of the Companies Act, to extend a mandatory offer to the remaining Infrasors ordinary shareholders.
The initial share purchase was settled in cash, as would be the shares purchased throughout the mandatory offer.
Afrimat stated that its recent acquisition of a majority stake in resources group Infrasors had strengthened its foothold in the industrial minerals sector and further expanded its geographical reach across South Africa.
The company indicated that all conditions precedent in relation to the initial transaction had been met, awarding it control of Infrasors on March 1.
Afrimat highlighted that the Infrasors acquisition would complement its Glen Douglas dolomite mine, while the transaction would also add silica to the company’s product offering. Strategically, the acquisition would enable Afrimat to expand its footprint in South Africa's northern provinces without having to create additional capacity.
Afrimat CEO Andries van Heerden and financial director Hendrik Verreynne have joined the board of Infrasors as nonexecutive directors.
RENEWABLE-ENERGY OPPORTUNITIES
Owing to its wide geographic footprint, Afrimat said it was ideally positioned to supply construction materials to the fast-growing renewable-energy sector in South Africa, which offered ample opportunity, as tenders demanded at least 540 000 m3 of concrete for the first phase of contracts in South Africa’s Renewable Energy Independent Power Producer Procurement Programme.
Afrimat sated that renewable-energy projects were likely to become a major driver of construction activity in the future, as South Africa was anticipated to continue to search for alternative energy sources.
“The bulk of renewable-energy activity in South Africa is likely to be centred on wind farms, with a number of solar power projects also due to commence in the short term,” the company added.
RISKS
Although Afrimat had largely been spared the acrimonious labour relations experienced in much of the mining industry, Van Heerden stated that strike action remained a risk to the company.
Last year, strike action in KwaZulu-Natal affected Afrimat and Van Heerden said the company’s management was prioritising minimising this risk. He added that the company managed its labour relations by adhering strictly to legislation, as well as bargaining arrangements, noting that various stakeholder engagement processes were under way in this regard.
"We are committed to keeping the lines of communication open at all times," he assured shareholders.