JCI, R&E reach agreement

Johannesburg - JCI Limited, JCI Investment Finance (Pty) Limited and Randgold & Exploration Company Limited (R&E) announced on Tuesday that they have signed a Memorandum of Understanding (MOU), following the failure of the scheme of arrangement proposed by R&E in April to JCI and its shareholders.

The merger between JCI and Randgold and Exploration (R&E) was voted down by shareholders.

The deal was designed to settle R14bn in legal claims against JCI for fraud perpetrated by the late Brett Kebble and other board members.

JCI and R&E both had their shares suspended from trade in 2005 for failing to submit financial results. Kebble was shot dead in September of that year. R&E alleges it is the victim of widespread fraud and theft, unprecedented in South African commercial history.

The merger proposal would have resulted in JCI shareholders receiving one R&E share for every 95 JCI shares they own. JCI would then be delisted and R&E could resume trading.

On Tuesday, the parties said the MOU is a precursor to a settlement agreement to be concluded between the companies on terms acceptable to them by end-May.

"The MOU contemplates that the implementation of the settlement agreement will bring about a full and final settlement of all of R&E's claims against JCI and vice-versa," the parties said.

In terms of the MOU, and subject to the fulfilment of various suspensive conditions to be provided for in the settlement agreement:

• JCI and JCIIF shall cause 6 051 632 Gold Fields Limited ordinary shares to be registered in the name of R&E;
• JCI shall cause 8 305 427 R&E ordinary shares, which are registered in the name of JCI, to be registered in the name of R&E;
• R&E shall cause 305 186 049 JCI ordinary shares which are registered in the name of R&E to be registered in the name of JCI;
• JCI and JCIIF shall transfer 50% of their direct and indirect claims and/or economic benefits in respect of 357 374 000 preference shares in Xelexwa Investment Holdings (Pty) Limited (in liquidation) (formerly known as Jaganda (Pty) Limited) to R&E; and
• JCI shall cause the transfer of 50% of the JCI group's direct and/or indirect interest, claims and/or economic benefits in respect of Boschendal to R&E.

"In terms of the MOU the companies will now endeavour to conclude a binding settlement agreement by 31 May 2009. The settlement agreement if concluded is an alternative to the proposed merger and will result in a similar financial outcome for the shareholders of both companies."

- I-Net Bridge and Miningmx.com