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Declaration and finalisation announcement in respect of the R4,6 billion fully subscribed renounceable offer
NORTHAM PLATINUM LIMITED
Incorporated in the Republic of South Africa
(Registration number 1977/003282/06)
ISIN code: ZAE000030912
JSE code: NHM
Debt issuer ISIN: ZAG000099524
Debt issuer code: NHMI
("Northam")
DECLARATION AND FINALISATION ANNOUNCEMENT IN RESPECT OF THE R4,6 BILLION FULLY
SUBSCRIBED RENOUNCEABLE OFFER BY NORTHAM, ON BEHALF OF ZAMBEZI PLATINUM (RF)
LIMITED ("ZAMBEZI PLATINUM"), OF 112,195,122 ZAMBEZI PLATINUM PREFERENCE SHARES, TO
NORTHAM SHAREHOLDERS ("SHAREHOLDERS")
1. INTRODUCTION
Shareholders are referred to the announcements released on the stock exchange news service of the JSE
Limited ("SENS") dated 22 October 2014 and 12 December 2014 in terms of which Northam announced
that it intended to conclude a R6,6 billion fully funded broad based black economic empowerment
transaction with a view to establishing a sustainable shareholding by historically disadvantaged persons
in Northam and incorporating a R4,6 billion fully funded capital raising to support Northam’s strategic intent
to grow its business (“BEE Transaction”). Shareholders are further referred to the circular posted to
Shareholders on Tuesday, 17 February 2015 ("Transaction Circular") setting out the details of the BEE
Transaction and convening a general meeting for Shareholders to consider, and if deemed fit, pass the
resolutions required to implement the BEE Transaction ("General Meeting").
As more fully set out in the Transaction Circular –
- Northam, Zambezi Platinum and the Public Investment Corporation SOC Ltd. ("PIC") entered into
a written sale agreement in terms of which Zambezi Platinum has agreed to purchase 47,710,331
shares in the ordinary share capital of Northam ("Northam Shares") from the PIC ("PIC Sale
Shares") for a purchase price per PIC Sale Share of R41, amounting to an aggregate purchase
consideration of R1,956,123,571;
- Northam and Zambezi Platinum entered into a written subscription agreement in terms of which
Zambezi Platinum agreed to subscribe for 112,195,122 Northam Shares ("BEE Subscription
Shares") at a subscription price per BEE Subscription Share of R41, amounting to an aggregate
subscription amount of R4,600,000,002 ("BEE Subscription Amount");
- in order to fund the BEE Subscription Amount, Northam and Zambezi Platinum have agreed to
jointly undertake a capital raising to be implemented by way of a renounceable offer by Northam,
on behalf of Zambezi Platinum, of 112,195,122 preference shares in the share capital of Zambezi
Platinum ("Zambezi Platinum Preference Shares"), which will be listed on the exchange
operated by the JSE Limited ("Exchange"), to existing Shareholders, in proportion to their
shareholding in Northam, through the issue of renounceable nil paid letters of allocation conferring
the right on the holder thereof to subscribe for Zambezi Platinum Preference Shares ("LA" or
"Letters of Allocation") (the "Offer"); and
- Northam and Zambezi Platinum have agreed to co-operate with one another in order to implement
the Offer and Zambezi Platinum has agreed to issue a prospectus ("Prospectus"), in accordance
with the Companies Act, No. 71 of 2008, to Shareholders.
All the requisite resolutions were passed at the General Meeting, as detailed in the SENS announcement
dated 19 March 2015.
Accordingly, Northam now wishes to proceed with the implementation of the Offer and an offer circular will
be issued by Northam to Shareholders ("Offer Circular"), the purpose of which is to, together with the
Prospectus, provide Shareholders with information relating to the Offer, the Zambezi Platinum Preference
Shares and Zambezi Platinum.
2. SALIENT TERMS OF THE OFFER
In terms of the Offer, qualifying Shareholders ("Qualifying Shareholders") (or their renouncees or
transferees) will be granted the renounceable right ("Right") to subscribe for 28.21907 Zambezi Platinum
Preference Shares for every 100 Northam Shares held as at 17:00 on Friday, 24 April 2015, at R41 per
Zambezi Platinum Preference Share ("Issue Price"). The Zambezi Platinum Preference Shares will be
issued to Offer participants on Monday, 18 May 2015 ("Implementation Date").
The Offer is fully subscribed for by the PIC and Coronation Asset Management Proprietary Limited
("Coronation") in accordance with the respective commitment agreements entered into between Northam
and each of the PIC and Coronation. The PIC has committed to subscribe for up to 75,609,756 Zambezi
Platinum Preference Shares and Coronation has committed to subscribe for up to 36,585,366 Zambezi
Platinum Preference Shares.
Applications for unallocated Zambezi Platinum Preference Shares in excess of the Rights conferred on
holders of Letters of Allocation ("Excess Offer Shares") will be permitted.
Qualifying Shareholders may apply to subscribe for Excess Offer Shares on the same terms and conditions
as those applicable to the subscription for Zambezi Platinum Preference Shares pursuant to the exercise
of their Rights. The right to apply for Excess Offer Shares will be automatically transferred on the
renunciation or sale of Letters of Allocation.
The entire proceeds of the Offer will be utilised by Zambezi Platinum to subscribe for the BEE Subscription
Shares at the BEE Subscription Amount.
3. SALIENT TERMS OF THE ZAMBEZI PLATINUM PREFERENCE SHARES
Classification
The Zambezi Platinum Preference Shares are guaranteed, secured, redeemable, cumulative instruments.
The Zambezi Platinum Preference Shares, once issued, will be fully paid up, freely transferable and listed
on the Main Board of the Exchange. Although the Zambezi Platinum Preference Shares will be listed on
the Main Board of the Exchange, the Zambezi Platinum Preference Shares will be subject to the JSE Debt
Listings Requirements. Each Zambezi Platinum Preference Share will, upon allotment and issue, rank pari
passu with each other Zambezi Platinum Preference Share in all respects. Full details of the preferences,
rights and limitations of the Zambezi Platinum Preference Shares are set out in the memorandum of
incorporation of Zambezi Platinum ("Zambezi Platinum Preference Share Terms"), an extract of which
will be attached to the Prospectus.
Dividends
Subject to certain rate adjustment events, the Zambezi Platinum Preference Shares shall be entitled to
receive a dividend equal to a variable rate calculated on a daily basis as 3.5% over the prime rate, being
the percentage publicly quoted as the basic rate of interest levied by Nedbank Limited from time to time
on overdraft, calculated on a 365 day year, irrespective of whether the applicable year is a leap year,
compounded annually ("Dividend Rate").
Dividends on the Zambezi Platinum Preference Shares ("Preference Dividends") will be classified as a
dividend for tax purposes in terms of the Income Tax Act, No. 58 of 1962 and, to the extent that they are
not paid, shall accumulate, be capitalised annually and accrue interest at the Dividend Rate.
The Dividend Rate will be subject to adjustments in the event that, inter alia, the Preference Dividends
become subject to new taxes or increased taxation rates whilst the Zambezi Platinum Preference Shares
are in issue.
For so long as the Zambezi Platinum Preference Shares are in issue, 90% of all net ordinary cash
dividends paid by Northam in respect of the BEE Subscription Shares and the PIC Sale Shares held by
Zambezi Platinum (collectively, the "BEE Shares") will be utilised by Zambezi Platinum to pay
accumulated Preference Dividends, with the remaining net 10% being distributed as a dividend by Zambezi
Platinum to the holders of the Zambezi Platinum ordinary shares. In the event that Northam –
- declares a scrip dividend in respect of the BEE Shares, Zambezi Platinum will be obliged to elect
to receive a cash dividend and such amount will be treated by Zambezi Platinum as ordinary cash
dividends;
- issues Northam Shares or renounceable letters of allocation in respect of the BEE Shares pursuant
to a Northam capitalisation issue or rights offer, respectively, these will be sold and the proceeds
received shall be applied solely towards the payment of accumulated Preference Dividends and
the redemption of Zambezi Platinum Preference Shares; and
- declares a special dividend in respect of the BEE Shares, repurchases BEE Shares or effects a
return of capital in respect of the BEE Shares, such proceeds will also be applied solely towards
the payment of accumulated Preference Dividends and the redemption of Zambezi Platinum
Preference Shares.
To the extent that the ordinary cash dividend received by Zambezi Platinum in respect of the BEE Shares
exceeds the amount of the accumulated Preference Dividends (“Excess Cash Dividend”), Zambezi
Platinum shall be obliged to deposit the Excess Cash Dividend into the bank account which Northam will
open and operate on behalf of Zambezi Platinum for various purposes set out in the Zambezi Platinum
Preference Share Terms ("Distribution Receipts Account").
Redemption
Subject to certain exceptions, the Zambezi Platinum Preference Shares will be compulsorily redeemable
on the day immediately preceding the 10th anniversary of the Implementation Date at a price per Zambezi
Platinum Preference Share equal to the initial Issue Price, being R41 ("Redemption Amount").
In the event that there are available Excess Cash Dividends in the Distribution Receipts Account –
- at any time prior to the date occurring 3 years and 1 day from the Implementation Date, Zambezi
Platinum shall be entitled, but not obliged, to utilise the Excess Cash Dividends to redeem Zambezi
Platinum Preference Shares; or
- at any time after the date occurring 3 years and 1 day after the Implementation Date, Zambezi
Platinum shall be obliged to utilise the Excess Cash Dividends to redeem Zambezi Platinum
Preference Shares.
Zambezi Platinum will issue the sole N share in its authorised share capital to Northam ("N Share"), the
purpose of which is to allow Northam to take certain mitigating action in the event of the occurrence of an
early redemption event under the Zambezi Platinum Preference Share Terms (discussed below) and/or the
unwinding of the BEE Transaction prior to the expiry of the lock-in period, being 10 years from the
Implementation Date ("Lock-in Period").
If an early redemption event occurs in relation to Zambezi Platinum ("Zambezi Platinum Early Redemption
Event"), Northam, in its capacity as the holder of the N Share, shall have the right to require the full and
immediate redemption of the Zambezi Platinum Preference Shares and settlement of any outstanding
Preference Dividends.
If a Zambezi Platinum Early Redemption Event or an early redemption event in relation to Northam occurs,
the holders of Zambezi Platinum Preference Shares will have the right to require the full and immediate
redemption of the Zambezi Platinum Preference Shares and settlement of any outstanding Preference
Dividend.
Subject to certain exceptions, Zambezi Platinum will be entitled to redeem the Zambezi Platinum Preference
Shares in cash or by transferring BEE Shares to the holders of Zambezi Platinum Preference Shares, or a
combination thereof. If Zambezi Platinum elects to transfer BEE Shares to the holders of Zambezi Platinum
Preference Shares, then the BEE Shares will be transferred at a price equal to 90% of the 30 day volume
weighted average price ("VWAP") of Northam Shares ending on the day immediately prior to the date on
which Zambezi Platinum becomes obliged to redeem the Zambezi Platinum Preference Shares.
Security arrangements
Zambezi Platinum will be a ring-fenced entity that cannot transact outside of the approved parameters of
the BEE Transaction. It will be precluded from, inter alia, encumbering or disposing of its assets during the
Lock-in Period. Pursuant to the security arrangements, the BEE Shares held by Zambezi Platinum and any
cash accumulated within Zambezi Platinum shall be utilised by Zambezi Platinum solely in order to settle
the Preference Dividends and the Redemption Amount (or to settle amounts owing to Northam).
Additionally, payment of the Redemption Amount and the Preference Dividends will be secured by Northam
by way of the guarantee by Northam entered into between inter alia Northam and Zambezi Platinum
("Northam Guarantee"), on the basis that the Northam Guarantee will constitute a stipulation for the benefit
of all the holders of Zambezi Platinum Preference Shares. In terms of the Northam Guarantee, Northam will
guarantee the payment of all amounts which Zambezi Platinum has contracted to pay (but failed to pay on
the due date therefor) in respect of the Zambezi Platinum Preference Shares by means of, at Northam's
election (subject to certain exceptions), a cash payment and/or the issue of a determinable number of
Northam Shares to the holders of Zambezi Platinum Preference Shares.
In the event that Northam elects to issue new Northam Shares to holders of Zambezi Platinum Preference
Shares in settlement of a claim under the Northam Guarantee, such Northam Shares will be issued at a
value equal to 95% of the 10 day VWAP of Northam Shares for the 10 trading days succeeding the date
upon which notice of a claim pursuant to the Northam Guarantee is provided to Northam.
As an alternative to making payment directly to the holders of Zambezi Platinum Preference Shares under
the Northam Guarantee, Northam may choose to capitalise Zambezi Platinum with sufficient Northam
Shares and/or cash to redeem the Zambezi Platinum Preference Shares by subscribing for Zambezi
Platinum ordinary shares.
4. SALIENT DATES AND TIMES
The salient dates and times of the Offer are set out below:
2015
Last day to trade in Northam Shares in order to participate in the Offer (cum
entitlement) on Friday, 17 April
Northam Shares commence trading ex-entitlement at 09:00 on Monday, 20 April
Listing and trading of LAs on the Exchange commences at 09:00 under the Monday, 20 April
JSE code NHMN and ISIN ZAE000203014 on
Offer Circular, Prospectus and where applicable, forms of instruction posted to
Qualifying Shareholders holding certificated Shares ("Qualifying Certificated
Shareholders") on Tuesday, 21 April
Record date at 17:00 on Friday, 24 April
Qualifying Shareholders holding dematerialised Shares ("Qualifying
Dematerialised Shareholders") will have their central securities depositary
participant ("CSDP") or broker accounts automatically credited with their LAs
at 09:00 on Tuesday, 28 April
Qualifying Certificated Shareholders will have their LAs credited to an
electronic account held with the transfer secretaries at 09:00 on Tuesday, 28 April
Offer Circular and Prospectus posted to Qualifying Dematerialised
Shareholders (where applicable) on Wednesday, 29 April
Qualifying Certificated Shareholders wishing to sell all or some of their LAs to
deliver the Forms of Instruction to the transfer secretaries by 12:00 on Friday, 8 May
Last day to trade in LAs on the Exchange on Friday, 8 May
Listing of Zambezi Platinum Preference Shares and trading therein Monday, 11 May
commences at 09:00 on
Offer closes – payments to be made and Form of Instruction in respect of LAs
to be delivered by Qualifying Certificated Shareholders by 12:00 on (see note
5) Friday, 15 May
Record date for LAs on Friday, 15 May
Qualifying Dematerialised Shareholders’ (or their renouncees’ or their
transferees’) CSDP or broker accounts will be debited with the aggregate Issue
Price and updated with Zambezi Platinum Preference Shares on Monday, 18 May
Share certificates posted to Qualifying Certificated Shareholders (or their
renouncees or transferees) on or about Monday, 18 May
Issue of Zambezi Platinum Preference Shares to Offer participants on Monday, 18 May
Results of Offer released on SENS on Monday, 18 May
Results of Offer published in the press on Tuesday, 19 May
Qualifying Dematerialised Shareholders’ (or their renouncees’ or their
transferees') CSDP or broker accounts will be credited with Excess Offer
Shares (if any) and debited with the Issue Price and updated with the Issue
Price due on Wednesday, 20 May
Share certificates and/or refund cheques in respect of Excess Offer Shares
posted to Qualifying Certificated Shareholders (or their renouncees or
transferees) on or about Wednesday, 20 May
Notes:
1. All times referred to are South African times.
2. Northam Shares may not be dematerialised or rematerialised between Monday, 20 April 2015 and Friday, 24 April 2015, both
days inclusive.
3. Qualifying Dematerialised Shareholders are required to notify their duly appointed CSDP or broker of their acceptance of the
Zambezi Platinum Preference Shares in the manner and within the time stipulated in the agreement governing the relationship
between the Shareholder and his/her CSDP or broker.
4. The CSDP or broker accounts of Qualifying Dematerialised Shareholders (or their renouncees or transferees) will be
automatically credited with Zambezi Platinum Preference Shares to the extent to which they have accepted the Offer. If
applicable, share certificates will be posted, by registered post, to Qualifying Certificated Shareholders (or their renouncees or
transferees) at his/her risk in respect of the Zambezi Platinum Preference Shares which have been accepted.
5. CSDP’s effect payment in respect of Qualifying Dematerialised Shareholders (or their renouncees or transferees) on a delivery
versus payment basis.
5. CONDITIONS PRECEDENT
There are no suspensive conditions to the Offer.
6. SHAREHOLDER DOCUMENTATION
The Offer Circular will be accompanied by the Prospectus and is expected to be issued to Shareholders
on or about Tuesday, 21 April 2015.
Please note that this announcement is not a prospectus and is not an offer. Copies of the Offer Circular
and the Prospectus will be available at the respective addresses specified therein from the date of issue
thereof until the 10th business day following the Implementation Date.
7. FOREIGN SHAREHOLDERS
Any Shareholder resident or located outside of the Republic of South Africa ("Foreign Shareholder") who
receives this announcement, the Offer Circular, the Prospectus and/or a form of instruction (in respect of
Shareholders holding certificated Northam Shares) should obtain advice as to whether any governmental
and/or any other legal consent is required and/or any other formality must be observed to enable such
Shareholder to exercise its Rights to subscribe for Zambezi Platinum Preference Shares in terms of the
Offer.
The Offer will not constitute an offer of securities in any jurisdiction in which it is illegal to make such an
offer and this announcement, the Offer Circular, the Prospectus and forms of instruction should not be
forwarded or transmitted by recipients thereof to any person in any territory other than where it is lawful to
make such an offer.
Foreign Shareholders should consult their professional advisers to determine whether any governmental
or other consents are required or other formalities need to be observed to allow them to take up the
Zambezi Platinum Preference Shares or trade their LAs. Shareholders holding Northam Shares on behalf
of persons who are Foreign Shareholders are responsible for ensuring that the taking up of the Zambezi
Platinum Preference Shares, or trading in LAs, will not breach regulations in the relevant jurisdictions
outside the Republic of South Africa.
To the extent that Foreign Shareholders are not entitled to participate in the Offer as a result of the
aforementioned restrictions, the LAs attributable to such Shareholders will be sold by the transfer
secretaries, or other third party nominated for this purpose, and the proceeds from such sales will be
remitted to them provided that the aggregate of such receipts exceeds R20.
Johannesburg
10 April 2015
SOLE BOOKRUNNER, CORPORATE ADVISOR AND SPONSOR
One Capital
ATTORNEYS TO THE SOLE BOOKRUNNER, CORPORATE ADVISOR AND SPONSOR
Cliffe Dekker Hofmeyr Incorporated
ATTORNEYS TO NORTHAM
Bowman Gilfillan Incorporated
Date: 10/04/2015 01:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
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