Afarak Group Plc Afarak Will Acquire 49% Balance Of Synergy Africa Ltd (Joint Venture)

 
TIDMAFAGR 
 
   16:45 London, 18:45 Helsinki, 3 April 2019 - Afarak Group Plc ("Afarak" 
or "the Company") (LSE: AFRK, OMX: AFAGR) 
 
   AFARAK WILL ACQUIRE 49% BALANCE of SYNERGY AFRICA LTD (Joint Venture) 
 
   The Board of Directors of Afarak has approved a transaction in which 
Afarak and Joint Venture partner will agree on a share transfer of 49% 
of Synergy Africa Ltd at a nominal value of USD 49. After this 
transaction Afarak will hold 100% of Synergy Africa Ltd and the Joint 
Venture agreement will be terminated. Synergy Africa and the Joint 
Venture were established in 2010, when Chromex Mining Plc was acquired 
by the Joint Venture. 
 
   The transaction is expected to be signed and executed within next 2-3 
weeks. With this transaction, Afarak will acquire full control over its 
mining assets and will consolidate Synergy Africa as a subsidiary. The 
acquisition of the of the Joint Venture interest will be accounted for 
in Q2'2019. This is likely to give rise to a significant accounting gain 
due to the revaluation of the Afarak 51% initial holding due to the 
change in control, according to IFRS. 
 
   This transaction simplifies the group structure and will allow the 
company to consolidate the Synergy Africa results as a subsidiary fully 
into the Afarak accounts. If Synergy Africa had been consolidated as a 
subsidiary in 2018 Afarak Group's revenue would have increased by EUR 29 
million, and EBITDA by EUR 1 million. 
 
   Guy Konsbruck, CEO said that "we are extremely glad to have reached this 
agreement, as the future growth potential of AFARAK resides largely in 
our mining activity. Additionally, our niche approach to the Ferro 
Chrome production requires full control over our mining assets to 
guarantee sustainable availability of high-quality ore." 
 
   As a part of this transaction, the current loan from the Joint Venture 
partner to Synergy Africa of GBP 18 million will be restructured in a 
way that 
 
 
   -- GBP 3 million originating from a loan from another group company (EWW) 
      towards the Joint venture partner will be offset; 
 
   -- remaining balance loan of GBP 15 million owed to the Joint Venture 
      partner will be treated as senior debt by Synergy Africa Ltd, and repaid 
      over a period of up to 5 years, with only a small portion of GBP 1.5 
      million payable shortly after completion. 
 
   The Board of Directors 
 
   Afarak Group 
 
   For additional information, please contact: 
 
   Afarak Group Plc 
 
   Guy Konsbruck, CEO, [phone], [e-mail] 
 
   Jean Paul Fabri, [phone], [e-mail] 
 
   Financial reports and other investor information are available on the 
Company's website: www.afarak.com. 
 
   Afarak Group is a specialist alloy producer focused on delivering 
sustainable growth with a Speciality Alloys business in southern Europe 
and a FerroAlloys business in South Africa. The Company is listed on 
NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange 
(AFRK). 
 
   Distribution: 
 
   NASDAQ Helsinki 
 
   London Stock Exchange 
 
   Main media 
 
   www.afarak.com 
 
   AFARAK WILL AQUIRE 49% BALANCE of SYNERGY AFRICA LTD (Joint Venture) 
 
 
 
 

(END) Dow Jones Newswires

April 03, 2019 11:47 ET (15:47 GMT)

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