Afrimat Limited (JSE:AFT) made a non-binding expression of interest to acquire the remaining 72.73% stake in Unicorn Capital Partners Limited (JSE:UCP) ("UCP") from group of shareholders for ZAR 81.5 million on May 25, 2020. The offer is made by way of scheme of arrangement. In terms of the Non-Binding Expression of Interest, Afrimat proposes to acquire the subject shares in consideration for the issue of new listed Afrimat ordinary shares, at a ratio of 1 new Afrimat share for every 280 subject shares held, with no cash alternative. An independent board of UCP directors has been constituted in relation to the Offer and the Scheme comprised of Ralph Patmore, Stephen Naudé and Mdu Gama (“Independent Board”). Afrimat has, on a confidential basis, obtained irrevocable undertakings from Unicorn shareholders holding, in aggregate, 57% of Unicorn's issued share capital, to vote in favor of the Scheme.

The Scheme will be subject to (and will become operative on the relevant operative date upon) the fulfillment of the following conditions precedent: that the Mpumalanga Economic Growth Agency, as minority shareholder in Nkomati Anthracite Proprietary Limited, agrees to the terms of the strategic and mining management agreement with Afrimat, as previously approved by the UCP Board on March 20, 2020, to the satisfaction of Afrimat; that written consent to the transfer of UCP shares in terms of the Scheme be obtained from the Industrial Development Corporation of South Africa and ABSA Bank Limited (collectively, the “Lenders”) in terms of the change of control provisions under their respective loan/funding agreements with subsidiaries of UCP and that the Lenders agree not to proceed in foreclosing on outstanding debt due by those subsidiaries; that, within the time period prescribed in section 164(7) of the Companies Act, UCP shareholders have not exercised appraisal rights, by giving valid demands in accordance with the requirements of sections 164(5) to 164(8) of the Companies Act, in respect of more than 5% of all issued UCP shares; that the resolution to be proposed at the general meeting (“General Meeting”) to approve and authorize the Scheme (“Scheme Resolution”) is approved by the requisite majority of votes of the UCP shareholders; to the extent required in terms of the Companies Act, that the court approves the implementation of the Scheme Resolution; that all regulatory approvals required to implement the Scheme are obtained; the relevant competition authorities granting such approvals as are required in terms of the Competition Act, No. 89 of 1998 and other applicable laws to implement the Scheme, either unconditionally or subject to conditions acceptable to Afrimat; the JSE granting such approvals (if any) as are required in terms of the JSE Listings Requirements in respect of the Scheme. As per the update on September 9, 2020, the general meeting of shareholders will held on October 9, 2020. Shareholders of Unicorn Capital Partners Limited have approved the transaction in the general shareholders' meeting. As per the announcement of October 9, 2020, Unicorn Capital Partners and Afrimat advise that the requisite unconditional approval of the scheme by the competition authorities has been obtained. The transaction is expected to be completed on November 9, 2020.

The Independent Board has appointed Exchange Sponsors as the independent expert (“Independent Expert) to issue a report dealing with the matters set out in sections 114(2) and 114(3) of the Companies Act and Regulations 90 and 110 of the Takeover Regulations, and express an opinion on whether the terms and conditions of the Scheme (including the swap ratio of Afrimat shares for UCP shares) are fair and reasonable to UCP shareholders. PSG Capital acted as financial advisor and sponsor for the transaction for Afrimat. Arbor Capital Sponsors, AcaciaCap Advisors Proprietary Limited and Questco Corporate Advisory Proprietary Limited acted as financial advisor for UCP. Bdo South Africa Incorporated acted as accountant for Unicorn Capital Partners Limited and PricewaterhouseCoopers LLP acted as accountant for Afrimat Limited.