Good morning, and I would like to welcome everyone to the Jupiter Investor Call. Today we have Jupiter Managing Director and Chief Executive Officer Brad Rogers, and Chief Financial Officer Melissa North to provide a briefing on the announcement made by the company earlier today, and then we'll open up to questions from callers. Thanks, Brad. Please go ahead.
Thanks very much, and good morning, everyone, and thanks for jumping on this call at short notice. Today, Jupiter announced an important and exciting development for Jupiter, for Tshipi, and for our investment partners. What I wanted to do on this call is take you through the key points that are set out in our announcement this morning, and also provide time for any questions that people may have in relation to that announcement. In our announcement this morning, we set out that yesterday, Exxaro have announced a binding agreement to acquire various interests from Incipi and OM Holdings. In amongst those interests, there are a couple that are relevant to Jupiter.
Those interests are 50.1% of Tshipi and proportion of marketing rights, so 50.1% of the equity of Tshipi and 50.1% of the marketing rights, and 19.99% of Jupiter acquired at a share price at completion equivalent to AUD 0.317 per share. That is converted to the ZAR exchange rate at the time of that binding agreement, and you can see the ZAR figure in our announcement. The deal is subject to conditions, including regulatory approvals, and is expected to complete in the March quarter of 2026. For those not familiar with Exxaro, Exxaro is a Johannesburg Stock Exchange-listed miner. They are one of South Africa's largest and most successful miners, and a successful example of a black empowerment company as well.
They are predominantly focused today on the mining of coal, and you'll see in the About Exxaro section of our announcement that they own outright five coal mines, and they have interests in a number of other hard rock mines and also some infrastructure in South Africa, amongst other investments. Today, they're about a $3 billion market cap company. Exxaro has a stated strategy to diversify over time away from coal and towards forward-facing minerals, and manganese has been designated as one of those minerals. They have been focused on quality manganese mines like we're discussing today for a period of time, and their announcement is a successful culmination of their work in that regard.
For Jupiter, what this means is at completion, once those conditions I mentioned are satisfied, Jupiter will have a new major shareholder overtaking Incipi who today are our largest shareholder, and that's been the case for many years, as you'd be aware. Exxaro has effectively bought a right to stand in the shoes of Incipi and OM Holdings in the Tshipi shareholders' agreement. That shareholders' agreement remains unamended by this acquisition announced today, and what that means for Jupiter is that all of our rights that exist today exist after completion of this transaction. In effect, what that means is that Jupiter and Incipi today operate what is known as joint control over this asset. The two parties need to agree on things for the proper operation of the asset, and that's the way that the shareholders' agreement will endure this acquisition.
Nothing changes for Jupiter in respect to what you know of us today, and nothing changes with respect to the volume of material that we market on an ongoing basis. Business as usual for Jupiter, but we will have a new partner at Chippy, and we will have a new major shareholder. Obviously, a new partner that is really well positioned in the South African mining and operating context, a large existing South African-focused miner, and we think there is lots that can be brought to bear in terms of adding value to the Chippy operation, but also a company that has, with us, conviction around the value that can be added through consolidation of these joint control structures. That is the situation today. You have got an announcement pending regulatory approvals that we expect to complete in the March quarter of next year.
A price paid for 19.99% of Jupiter's equity at the time of completion, which at the ZAR exchange rate on Monday night when this deal was signed, equates to AUD 0.317 per Jupiter share. A partner coming in that is aligned with us in views on value to be achieved through consolidation, and someone that's obviously got strong conviction as we do about the future for manganese and the future valuable opportunities through Chippy and other assets in the Kalahari. We believe at Jupiter really strongly in the value that will be released through consolidation, so today's announcement is an important step in that direction, which is why we support it strongly and why we have supported it through the course of the work that Exxaro has done getting to this point today. We welcome Exxaro in summary as a well-placed, resourced, and motivated shareholder and partner.
We're looking forward to working with them to create further value consistent with our respective strategies. I'll pause there. Hopefully, that's touched on the key points to frame any questions that people may have. I do note that Exxaro put out their own detailed announcements and communications yesterday, and OM Holdings also made an announcement, so there's further material outside of the Jupiter ASX announcement that came out this morning that people may wish to refer to. For Jupiter, hopefully that sets out the bits of that announcement that are relevant to us. This is a very positive development. It creates a clear pathway forward for Jupiter. It creates a better price market for the fundamental value of Jupiter and for Tshipi with what's been agreed as a price for Jupiter's shares.
Obviously, Exxaro in doing that work has taken a fundamental valuation approach to that work and come up with the price that they have. Longer term, what this does at first instance is put them into the same joint control structure that we're in. We think that there is shared value to be had, and there are different ways forward on that that involve working together in order to jointly execute strategies that are focused on further value creation post this important deal that was announced today. I'll pause there and see if there are any questions that anyone would like to ask me in relation to this update.
Thank you. If you wish to ask a question, please press Star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from John Schultz with Argonaut. Please go ahead.
Hi, Brad and team. Just to push on that joint control of Tshipi and maybe just insight into the shareholder structure and your influence and, I guess, where the sort of balance of control lies at Tshipi post this transaction.
Yeah, thanks, John. The shareholders' agreement is the thing that governs the way decisions are made at Tshipi. What joint control means in terms of how that shareholders' agreement sets out the respective rights for the shareholders is set out in relation to the types of decisions to be made. In summary, operating decisions require agreement of both shareholders. Up until now, that's been Incipi Mining being NH and OM Holdings combined on one half and then Jupiter on the other half. Going forward, Exxaro is buying out Incipi and OM Holdings, so Exxaro will stand in those shoes, and it will be Exxaro and Jupiter in relation to all operational matters having to agree on those matters. There is an escalation through respective CEOs if no agreement can be achieved.
In relation to reserved matters, and that's a long list of corporate matters, but also planning like budgeting, dividends, anything in terms of capital requirements, restructuring, etc., those things require a special majority, 75% shareholding vote. The shareholders' agreement sets out in a pretty thoughtful way how decisions are made. It has functioned very well between Incipi Mining and Jupiter up until now. We think it'll function well going forward. We do think it would be more valuable to create, as I said earlier, consolidated control around these structures. As it is today, that is how it's functioned. It's functioned well. It does require, for all decisions, really, agreement between the parties or at least a 75% majority decision.
That's the joint control structure and how it works, and that's the joint control structure that will be in place post completion of this deal unless we agree something different.
Excellent. Thanks. Just on Tshipi ability to pay dividend, I noticed in Exxaro's announcement they talk about a leakage adjustment before close in 2026. Do you see any impact to Tshipi being able to pay dividends and therefore Jupiter being able to pay dividends before close?
No, I don't, John. There shouldn't be an impact on that. That lockbox reference that is included within Exxaro's announcement, I understand what that relates to, is a completion adjustment mechanism. All that means is that if a dividend is paid to the existing shareholders, then the consideration is adjusted for that. That is a fairly typical closing mechanism. The expectation in these situations is between announcing and completion that you are continuing on the ordinary course of business. I don't expect any changes in that regard.
Good. Maybe just a cheeky one, there's been no direct approach from Exxaro yet about a takeover for Jupiter?
I mean, I think what I've said before, John, probably covers the answer here as well. What we all think, Exxaro and Jupiter, and it's not a unique view, is that you've got a great asset here in Tshipi. You've got an asset that's performed really well because you've got a fantastic team operating it. It's well invested. It's a great resource base, and so it's functioning well. Everyone thinks that more value would be released on top of what's been announced today if you can get consolidated ownership. For Jupiter, we're happy to be flexible in the way that that is delivered. To answer your question, those sorts of further steps forward are for further discussion from today. Today, what we're announcing is something that Exxaro has achieved that is relevant for Jupiter, is an important first step.
Jupiter is focused on its strategy of driving further value through consolidation, and that can occur in many different ways. I think that's similar to what Exxaro said in answer to this question yesterday.
Excellent. Thanks, Brad. I think the see-through pressure, there's a lot of value here. Thanks for everything.
Okay. Thanks, John.
Thank you. Your next question comes from Hiley with Argonaut. Please go ahead.
Morning, Brad. Can you hear me? Is that fine?
Yeah, I can. How are you, John?
Great. Thanks. Thanks, Brad. My understanding is that the historical Tshipi shareholders' agreement has a future expansion of business clause where everything that the operating company wants to do in the Kalahari has to be through that business. I'm just curious how that interacts with Exxaro's plans for Makala and the Hodjo assets.
Yes, this has happened above that level. You're correct, but it doesn't apply.
What does that mean for, I guess, their future plans if they want to expand in the Kalahari as well?
Yeah. The shareholders' agreement that was in place does require the shareholders to first look at acquisitions through Tshipi, as you say. I thought you were asking a question in relation to what was announced today rather than in relation to what may come next. Yes, that provision is in that shareholders' agreement.
Right. So and just to clarify, if they wanted to, they can consolidate Hodjo and Makala outside of this joint venture. Is that correct?
There's a process within the Chippy shareholders' agreement, which I'm probably not going to go through today, that you have to go through in order to test for how things should be executed. To be honest, that's not something that I've been particularly focused on lately, but you do have that provision in there.
Okay. Appreciate it. Thank you.
Thank you. Once again, if you wish to ask a question, please press Star 1 on your telephone. Your next question comes from Adam Baker with Macquarie. Please go ahead.
A basic update. Just in relation to the board of Chippy, JMS, you've still got your two seats, but you've obviously got the three other seats sitting there. When are we likely to see that change? Is that only going to occur once this transaction goes through to completion?
I would expect so, Adam. There's been no discussion around that. The shareholders' agreement sets out that Incipi Mining gets two seats plus the chairman, and Jupiter gets two seats. So that's how the board works. It's not how it's kind of exactly working today, but that's how it works under the shareholders' agreement. I'll defer to my earlier comments, which I think are more important in this regard around how decisions actually get made on an operating and a reserved matters basis, and that has reference more to shareholders' rights than the composition of the board. That's why there's effective countervailing joint control over the asset and why, unless you kind of resolve that situation, no one consolidates for accounting purposes, etc., which is the situation that's been proposed here.
I would think, answering your question, that is something that gets discussed over the course of the regulatory approvals that Exxaro now has to go through.
Yeah. Okay. That's clear. Thank you. Now that Exxaro is merging with a 98.9% stake in Jupiter, have they indicated at all whether they would like to assume the board seat?
We haven't had that particular discussion. I expect the Chippy board discussion, that'll be something that'll come. I won't sort of front-run that conversation, but I expect that's also something that'll get discussed. Obviously, Incipi had a board seat previously, and so that's a conversation that we're expecting but hasn't been resolved yet.
Okay. Thank you. I'll hand it on to.
Thank you. There are no further questions at this time. I'll now hand back to Brad for closing remarks.
Okay. Great. Thanks to everyone for jumping on at short notice. As we just remarked a moment ago, this is a really good development. It creates a better price marker from someone who's done the work for Jupiter and Chippy compared to where Jupiter's share price was trading. Longer term, we're excited about the possibilities to work with Exxaro in prosecuting further value for mutual benefit. This is a positive thing. It provides a clear pathway forward for Jupiter to get on with executing along with Exxaro our joint strategy. Hopefully, it does cause some better clarity. As I said, we've got our ASX announcement out there, but also other materials have been released from OM Holdings and from Exxaro that you might like to go through. Thanks, all, and look forward to talking soon.
That does conclude our conference for today. Thank you for participating. You may now disconnect.