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Quarterly Progress Report - September 2024
SALUNGANO GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 2005/006913/06)
Share code: SLG ISIN: ZAE000306890
("Salungano Group" or "the Company")
QUARTERLY PROGRESS REPORT – SEPTEMBER 2024
Shareholders are referred to the ongoing suspension in trading of the Company's shares on the JSE Limited
("JSE"), which came into effect on 21 August 2023 ("the Suspension") for failing to publish its audited financial
results for the year ended 31 March 2023 ("FY2023 financial results") within the prescribed period.
In terms of paragraph 1.11(c) of the JSE Listings Requirements, Salungano Group is required to provide
shareholders with an update on a quarterly basis until the Suspension is lifted, on the state of affairs of the
Company and any action proposed by the Company in order to have the listing reinstated, including the date
on which the suspension is expected to be lifted.
Delays in the publication of financial results and change of auditors
Shareholders are reminded that the FY2023 financial results, on which the auditors expressed a disclaimer of
audit opinion, were published on SENS on 21 May 2024, and that the integrated annual report for the year
ended 31 March 2023, incorporating the FY2023 results and the Notice of Annual General Meeting for the year
ended 31 March 2023 ("Notice of AGM"), were published on SENS on 18 June 2024. The Company is
however, yet to publish its interim financial results for the six months ended 30 September 2023 ("FY2024
interim financial results") and its audited financial results for the year ended 31 March 2024 ("FY2024
financial results") which were, in terms of the JSE Listings Requirements, required to be published by no later
than 31 December 2023 and 30 June 2024, respectively.
In the previous quarterly progress report released on SENS on 3 June 2024 ('Quarterly Progress Report –
June 2024'), shareholders were referred to the announcement released on SENS on 30 May 2024, advising
that the Company's auditors, KPMG Inc ("KPMG"), had resigned with effect from 28 May 2024, and that the
Board had commenced a process of appointing new auditors. Shareholders were subsequently advised, in a
SENS announcement of 25 July 2024 ('Appointment of External Auditor'), that SNG Grant Thornton was
appointed as the Company's auditors with effect from 25 July 2024, subject to shareholder approval at the
Company's next annual general meeting. To accommodate such approval by shareholders, a revised Notice
of AGM incorporating an additional resolution, namely 'Ordinary resolution number 8: Appointment of external
auditors', was distributed to shareholders on 8 August 2024 ('Revised Notice of Annual General Meeting'). As
announced on SENS on 8 August 2024, the revised Notice of AGM replaced the Notice of AGM distributed on
18 June 2024 in toto.
As set out in the Quarterly Progress Report – June 2024, shareholders were also advised that it was the
Company's intention to release the FY2024 interim financial results on or about 31 July 2024, and the FY2024
financial results as soon as possible thereafter, which was estimated to be on or about 30 August 2024, subject
to the appointment of new auditors.
However, as announced on SENS on 5 August 2024, due to unforeseen delays in the handover process
between KPMG and SNG Grant Thornton, it has been established that the publication of the FY2024 interim
financial results will only be possible on or about 31 October 2024, and that it is the Company's intention to
release the FY2024 financial results as soon as possible thereafter.
Subsidiaries – business rescue and section 155 creditors' compromise proposal
Wescoal Mining
On 16 July 2024, shareholders were informed via a SENS announcement ('Approval of Business Rescue Plan
of wholly-owned Subsidiary') that the business rescue plan ("BR Plan") of Wescoal Mining Proprietary Limited
("Wescoal Mining"), a wholly-owned subsidiary of the Company, had been approved at a creditors meeting
held on 12 July 2024 and that the business rescue practitioners ("BRPs") of Wescoal Mining will continue to
implement the BR Plan for the benefit of all affected parties.
In an announcement released on SENS on 23 July 2024 ('Withdrawal of Wescoal Mining Cautionary and
Renewal of Keaton Mining Cautionary') shareholders were referred to the cautionary announcement released
on SENS on 25 August 2023 and the subsequent renewals thereof, the last of which was dated 3 July 2024,
regarding the voluntary business rescue of Wescoal Mining ("Wescoal Mining Cautionary") and advised, inter
alia, that further to the adoption of the BR Plan, caution was no longer required to be exercised when dealing
in the Company's securities as previously advised in the Wescoal Mining Cautionary, and that such cautionary
was withdrawn.
Keaton Mining
In an announcement released on SENS on 26 August 2024 ('Renewal of Keaton Mining Cautionary and
Creditors' Approval of Compromise Proposal') ("26 August 2024 announcement") shareholders were referred
to the further cautionary announcement released on SENS on 27 February 2024 regarding the application to
place Keaton Mining Proprietary Limited ("Keaton Mining"), a wholly-owned subsidiary of the Company's
wholly-owned subsidiary, Keaton Energy Holdings Limited ("Keaton Energy Holdings") under supervision
and to commence business rescue proceedings ("Business Rescue Application") ("Keaton Mining
Cautionary"), and the subsequent renewals thereof, the last of which was dated 23 July 2024.
In the 26 August 2024 announcement shareholders were also advised that:
- on 22 August 2024, a creditors' compromise proposal in terms of section 155 ("section 155 creditors'
compromise proposal") of the Companies Act, 2008 (Act 71 of 2008), as amended ("Companies Act")
was adopted by creditors representing 100% in value of concurrent, secured and preferent creditors;
- an application to court to sanction the adopted proposal would follow;
- it is anticipated that the compromise so sanctioned will serve to uplift the provisional liquidation status of
Keaton Mining;
- with regard to the application for leave to appeal against the judgment dismissing the earlier Business
Rescue Application, a hearing date was still awaited;
- the liquidation hearing that was to be heard on 22 August 2024, based on the provisional liquidation order
obtained by one of Keaton Mining's creditors, was postponed to 11 October 2024; and
- given the appeal relating to the dismissal of the Business Rescue Application, the aforementioned
provisional liquidation process and the section 155 creditors' compromise proposal (which proposal is
awaiting sanctioning by the court) may have a material effect on the price of Salungano Group's securities,
shareholders were advised to continue to exercise caution when dealing in the Company's securities until
further announcements were made.
Further to the 26 August 2024 announcement, shareholders are advised that it is anticipated that the
sanctioning of the section 155 creditors' compromise proposal by the court will occur prior to 11 October 2024.
Shareholders will be further informed on this matter in subsequent SENS announcements.
Date on which Suspension is expected to be lifted
Due to the unexpected auditors' handover delay mentioned above, the FY2024 interim financial results are
now planned to be released on or about 31 October 2024 and it is the Company's intention to release the
FY2024 financial results as soon as possible thereafter. It is therefore currently the Board's best estimate that
the Suspension will be lifted on or about 31 January 2025.
Johannesburg
2 September 2024
Sponsor
Merchantec Capital
Date: 02-09-2024 05:37:00
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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