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Sandpiper partner opts out

Minemakers has announced the sale of its 42.5% interest in the controversial Sandpiper Project located offshore Namibia to Mawarid Mining in a deal worth A$25 million.
The deal, subject to shareholder and Namibian Competition Commission approval, also includes the sale of Minemakers’ 70% interest in the Rocky Point Project.
In a statement released on Thursday, Minemakers said the ownership structure for the Sandpiper Project was not conducive to the efficient development and financing of the project despite the project representing an attractive medium-term development opportunity for the company.
Minemakers said by selling its 42.5% interest in the project “at this time of very weak market conditions and limited availability of capital,” it had avoided the dilutionary equity of capital raising which would likely be necessary to fund the development of the Sandpiper Project.
But despite the sale, Minemakers will still retain an indirect interest in the Sandpiper Project through its 14.2% shareholding in UCL Resources Limited (UCL) “providing Minemakers shareholders with exposure to the value upside from the project.” UCL Resources is an equal shareholder to Minemakers in the Sandpiper Project, also with 42.5% shareholding.
Following the sale, expected to be completed before the end of the year, Minemakers say it will focus on its 100%-owned Wonarah Project which it aims to develop into a vertically integrated fertiliser production operation.
The surprise announcement by Minemakers comes at a time when the company is the subject of an off-market reciprocal take-over bid by UCL. The UCL offer, which closes on 15 October, came after Minemakers made an initial unsuccessful take-over offer to acquire UCL, offering 13 Minemakers shares for every 10 UCL shares held. The Minemakers offer closed without any takers despite UCL’s own independent expert having said that the Minemakers offer is fair and reasonable to UCL shareholders.
UCL had hoped to fund the Minemakers offer through a A$9 million convertible note agreement with Mawarid Mining and from cash reserves. But the complexity of cross shareholding allowed Minemakers, as a significant minority shareholder in UCL, to oppose the issuing of the proposed bond. This was stated as reason for the rejection of the bid.
Minemakers argued that the planned convertible note to be used to fund the cash component of the UCL offer is not an attractive instrument. “It will introduce unrequired debt with an interest rate of 7.5% and an 18 month term.”
The company added at the time of the announcement of the UCL bid that the instrument will also result in further dilution of UCL shareholders when the debt is either repaid or converted.
Minemakers argued that the offer is not conditional on achieving a 100% outcome which leaves open the possibility for further cross-shareholding complications. Minemakers already holds a 14.2 % stake in UCL Resources
The Sandpiper Project is based on a marine phosphate deposit situated about 60km offshore and 150km south of Walvis Bay in water depths of 180 to 300m. Minemakers, together with partner  Union Resources Limited owned 42.5% shareholding each while local empowerment partner, Tungeni Investments owns 15%.
Once operational, the project could potentially produce 3 million tonnes of marketable rock phosphate concentrate per annum.

About The Author

Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.