JOHANNESBURG (miningweekly.com) – Chinese firm Hebei Zhongbo Platinum and Eastern Platinum (Eastplats) have each lodged break fees of $11.25-million with an escrow agent as required under the terms of share purchase agreements (SPAs) related to Hebei’s acquisition of Eastplats’ entire South African platinum group metals business.
These assets included the flagship Crocodile River mine, in the North West, which was shuttered on August 1, 2013, and the Eastern Limb development project, which too was placed on care and maintenance in the fourth quarter of 2012.
The deal would also see Hebei securing a majority of the interests held by Eastplats’ existing minority partners and all loan agreements between Eastplats and its subsidiary companies.
Eastplats said in a statement on Friday that the break fees were payable as liquidated damages upon the occurrence of certain events of default under the SPAs.
“Both Hebei and Eastplats have put significant effort into complying with the contractual terms and working through the specific conditions that Hebei has had to comply with in China.
“As a result of the break fees being placed into escrow, both parties can now concentrate on obtaining the remaining South African approvals for the transaction,” Eastplats CEO and president Ian Rozier said in a statement.
Eastplats shareholders approved the $225-million deal in February, while the Vancouver-based company said in a statement that the net proceeds of the acquisition, net of the minority interests’ buy-out, finder’s fee and estimated transaction costs, were expected to be $175-million.