The Tribunal has approved the large merger whereby ARM Bokoni Mining Consortium (Pty) Ltd (“ARM Bokoni”) intends to acquire the entire share capital of Bokoni Platinum Mines (Pty) Ltd (“Bokoni Platinum”). Upon the implementation of the proposed transaction, ARM Bokoni will exercise sole control over Bokoni Platinum.
 
The Tribunal has approved the merger subject to, among others, public-interest related conditions involving Broad-Based Black Economic Empowerment (“B-BBEE”) and employment.
 
In relation to the public interest, the merger parties submitted that the Bokoni Mine was placed under care and maintenance in 2017 due to several years of significant cash losses under difficult market conditions. As a result, there had been retrenchments at the Bokoni Mine.
 
The merger parties submitted that, subject to the outcome of a feasibility study to be conducted by the acquiring firm, the merger is likely to result in the reoperating of Bokoni Mine and the creation of an estimated 5000 employment opportunities, of which approximately 2500 will be permanent. In addition, structures promoting the greater spread of ownership will be established.
 
The merger conditions
 
B-BBEE condition
 
Within 36 months of the merger implementation date, the merged entity will finalise and implement an employee share ownership program (“ESOP”) special purpose vehicle (“SPV”); a local community SPV; and a Black industrialists SPV.
 
The abovementioned structures will be finalised in accordance with various principles outlined in the conditions that will benefit: (i) qualifying employees; (ii) eligible host communities of the Bokoni Mine; and (iii) Black industrialists. Among others, these structures will each acquire a shareholding of 5% in the acquiring firm for a nominal price.
 
Employment condition
 
For a period of 24 months after the merger implementation date, the merged entity will give first preference to Bokoni Mine’s current fixed-term contract, care and maintenance employees for any vacancies within the merged entity, provided these employees have the requisite qualifications, skills, know-how and experience for those specific vacancies, at all times subject to the merged entity's employment equity plan and transformation requirements.
 
In addition, the merged entity will take reasonable steps to maintain a database of the names and contact details of these employees and, should any vacancies arise within the merged entity, available vacancies will be communicated to them for a period of 24 months after the merger implementation date.
 
The merger parties
 
ARM Bokoni is a SPV established for purposes of the proposed transaction and does not have any business activities. The ARM Group is a diversified mining and minerals company that mines and beneficiates iron ore, manganese ore, chrome ore, platinum group metals ("PGMs"), nickel, ferromanganese and coal.
 
The target group holds the mining rights to and operates Bokoni Mining. Bokoni Mine is an underground PGM mining operation in Limpopo.