To view the PDF file, sign up for a MySharenet subscription.

ROYAL BAFOKENG PLATINUM LIMITED - Posting of circular to shareholders regarding a specific authority to issue shares and notice of general meeting

Release Date: 05/04/2017 14:51
Code(s): RBP     PDF:  
Wrap Text
Posting of circular to shareholders regarding a specific authority to issue shares and notice of general meeting

Royal Bafokeng Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/015696/06)
(ISIN: ZAE000149936)
(JSE Share code: RBP)
Bloomberg: RBP SJ EQUITY
Reuters: RBPJ.J
(“RBPlat” or the “Company”)

APPROVAL OF A SPECIFIC AUTHORITY TO ISSUE SHARES FOR THE PURPOSE OF THE
CONVERSION OF CONVERTIBLE BONDS, POSTING OF CIRCULAR TO SHAREHOLDERS AND
NOTICE OF GENERAL MEETING

1. Introduction

RBPlat shareholders (“Shareholders”) are referred to the announcement released on SENS on 8 March
2017, wherein RBPlat announced the successful placement of senior, unsecured, convertible bonds
with an aggregate principal amount of ZAR1.2 billion (the “Convertible Bonds”). The Convertible Bonds
were issued on 15 March 2017 and are expected to be listed on the Main Board of the JSE within 90
days of the issue date.

The Convertible Bonds are currently cash-settled instruments. In order for RBPlat to settle the
Convertible Bonds through the issue of new RBPlat ordinary shares (“RBPlat Shares”), a specific
authority is being sought from Shareholders for the issue of a maximum of 35 million new RBPlat Shares
upon conversion of the Convertible Bonds (the “Specific Authority”).

2. Rationale and use of proceeds

RBPlat intends to use the net proceeds from the issue of the Convertible Bonds to fund the next phase
of the ramp-up of the Styldrift I Expansion Project (“Styldrift I”) from 50 000 tonnes per month to 150 000
tonnes per month by the end of 2018.

This level of production secures the optimal level of Merensky production for RBPlat in a PGM
environment faced with future uncertainty, without the Company incurring significant expenditure that
would be required for a further processing plant and infrastructure development to process production
above this level.

3. Rationale for Specific Authority

A general meeting of Shareholders (the “General Meeting”) will be held in order for Shareholders to
approve the Specific Authority. The Convertible Bonds are currently cash-settled instruments for
accounting purposes. If Shareholders do not approve the issuance of RBPlat Shares upon conversion
of the Convertible Bonds, then the Convertible Bonds will remain subject to cash settlement.

Cash settlement of the Convertible Bonds will require significant cash reserves, which could constrain
the RBPlat Group’s ability to invest in existing and new projects, fund ongoing business activities, retire
or service outstanding debt and pay dividends, all of which could adversely affect its results of operations
and financial condition.
Subject to obtaining the Specific Authority, the Convertible Bonds will be convertible into RBPlat Shares
at an initial conversion price of ZAR42.9438, representing a 30% premium to the reference share price
of ZAR33.0337. At the initial Conversion Price, the number of RBPlat Shares to be issued upon
conversion of Convertible Bonds will be 27.9 million RBPlat Shares, representing 14.3% of the number
of existing RBPlat Shares in issue as at 31 March 2017, being the last practicable date prior to the
finalisation of the Circular (as defined below).

The terms and conditions provide that the conversion price will be adjusted on the occurrence of certain
events which include dividend payments, payments to Shareholders and where buybacks are done at
more than a 5% premium to the closing prices of the five trading days prior to the buyback. If such
adjustments result in a reduction of the conversion price, the number of RBPlat Shares to be issued in
the event of a conversion of the Convertible Bonds will be increased. RBPlat Shareholders are
accordingly requested to approve the Specific Authority for RBPlat directors to allot and issue a
maximum of 35 million RBPlat Shares, issuable upon conversion of the Convertible Bonds.

4. Pro Forma Financial Effects

The table below sets out the Pro Forma Financial Effects in order to reflect:

i.  the issue of the Convertible Bonds; and
ii. the subsequent shareholder approval for the issue of RBPlat Shares upon conversion of the
    Convertible Bonds,

on the audited consolidated results for the year ended 31 December 2016, assuming that the
Convertible Bonds are issued and the subsequent approval for the issue of RBPlat Shares took place
on 1 January 2016 for the purposes of the pro forma adjustments to the pro forma consolidated
statement of comprehensive income and on 31 December 2016 for purposes of the pro forma
adjustments to the pro forma consolidated statement of financial position.

The Pro Forma Financial Effects are the responsibility of the Directors and have been presented for
illustrative purposes only. The Pro Forma Financial Effects are based on available information and
certain assumptions and estimates that the Directors believe are reasonable. The Pro Forma Financial
Effects do not purport to be indicative of what the financial position and results of operations would have
been if the issue of the Convertible Bonds and the subsequent shareholder approval for the issue of
RBPlat Shares upon conversion of the Convertible Bonds occurred on a different date, or the effect and
impact thereof, going forward.

PRO FORMA FINANCIAL EFFECTS BASED ON THE AUDITED CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS OF RBPLAT FOR THE YEAR ENDED 31 DECEMBER 2016

                                                                          Pro forma after
                                                     Pro forma after     approval for the
                                                            Issue of      issue of RBPlat
                                                         Convertible            Shares on
                                       Before(1)            Bonds(2)        conversion(3)     Change (%)(4)
Net asset value per share
(cents)                                    58.02               58.02                58.92                 2
Tangible net asset value per
share (cents)                              52.17               52.17                53.07                 2
Basic earnings per share
(cents)                                    87.60              110.83                87.59                 0
Diluted earnings per share
(cents)                                    87.50              110.73                76.40              (13)
Basic headline earnings per
share (cents)                              86.70              110.00                86.76                 0
Diluted headline earnings per
share (cents)                              86.60              109.90                75.68              (13)
Weighted average number of
RBPlat shares in issue
(millions)                                192.15              192.15               192.15                 0
Weighted average number of
diluted RBPlat shares in issue
(millions)                                192.33              192.33               220.27                15
Number of RBPlat shares in
issue (million)                           192.28              192.28               192.28                 0

Notes and assumptions:
1. Extracted from the audited consolidated annual financial statements of RBPlat for the year
   ended 31 December 2016.
   Convertible Bonds (prior to approval for the issue of RBPlat Shares on conversion)
2. The “Pro forma after Issue of Convertible Bonds” column reflects the pro forma impact of the
   issue of the Convertible Bonds prior to shareholder approval for the issue of RBPlat Shares
   upon conversion of the Convertible Bonds. The effects on basic earnings per share, diluted
   earnings per share, basic headline earnings per share, and diluted headline earnings per share
   are calculated on the basis that the issue of the Convertible Bonds was effective on 1 January
   2016, while the effects on net asset value per share and net tangible asset value per share are
   calculated on the basis that the issue of the Convertible Bonds was effective on 31 December
   2016 for purposes of presenting the pro forma effects thereof on RBPlat, based on the following
   assumptions:
   - The Convertible Bonds are cash-settled instruments
   - At initial recognition, the embedded derivative is valued using option pricing methodologies
     with fair value movements recognised through profit and loss
   - The balance of the cash received is classified as a financial liability at amortised cost
     It should be noted that the pro forma effects do not include the earnings effect of the application
     of the proceeds from the issue of the Convertible Bonds.
     Convertible Bonds (after approval for the issue of RBPlat Shares on conversion):
3. The “Pro forma after approval for the issue of RBPlat Shares on conversion” column reflects the
   pro forma impact for the issue of the Convertible Bonds, subsequent to shareholder approval
   for the issue of RBPlat Shares upon conversion of the Convertible Bonds.
   The effects on basic earnings per share, diluted earnings per share, basic headline earnings
   per share, and diluted headline earnings per share are calculated on the basis that the issue of
   the Convertible Bonds and the subsequent shareholder approval for the issue of RBPlat Shares
   upon conversion of the Convertible Bonds was effective on 1 January 2016, while the effects on
   net asset value per share and net tangible asset value per share are calculated on the basis
   that the issue of the Convertible Bonds and the subsequent shareholder approval for the issue
   of RBPlat Shares upon conversion of the Convertible Bonds was effective on 31 December
   2016 for purposes of presenting the pro forma effects thereof on RBPlat, based on the following
   assumptions:
   - The Convertible Bonds constitutes a compound financial instrument of which the liability
     component is initially recognised at amortised cost
   - The balance of the cash received is classified as equity
     The diluted earnings per share and diluted headline earnings per share decreases with the issue
     of the approved RBPlat Shares due to the dilutive impact of the 27.94 million assumed increase
     in the weighted average number of diluted RBPlat shares on conversion. It should be noted that
     the pro forma effects do not include the earnings effect of the application of the proceeds from
     the issue of the Convertible Bonds.
4. The percentage change represents the impact of issue and conversion of the Convertible Bonds
   to RBPlat Shares after shareholder approval.
5. The Pro Forma Financial Effects should be read in conjunction with the Pro Forma Financial
   Information set out in the Circular.


5. Posting of circular and notice of General Meeting

A circular to Shareholders containing the details of the convertible bond offering, notice of General
Meeting, the Specific Authority, and a form of proxy was posted yesterday, Tuesday, 4 April 2017 (the
“Circular”). RBPlat Shareholders are advised that the Circular is also available on RBPlat’s website:
www.bafokengplatinum.co.za.

Salient dates and times for the General meeting are set out below:

                                                                                                    2017

Last date to trade in order to be eligible to attend, speak and vote at
the General Meeting                                                                     Monday, 24 April
 
Record date in order to be eligible to attend, speak and vote at the
General Meeting                                                                         Friday, 28 April
 
Last day and time to lodge forms of proxy with the Transfer Secretaries
by 10h00 on                                                                              Thursday, 4 May

General Meeting to be held at 10h00                                                        Monday, 8 May

Results of the General Meeting to be released on SENS                                      Monday, 8 May

Results of the General Meeting to be released in the South African
press on                                                                                  Tuesday, 9 May


Notes:
1. The above dates and times are subject to amendment. Any such amendment will be released
   on SENS and published in the South African press.
2. All times indicated above are given in South African time.
3. To be valid, the completed form of proxy must be lodged with the Transfer Secretaries,
   Computershare Investor Services Proprietary Limited, Level 1 and 2, Rosebank Towers, 15
   Biermann Avenue Rosebank, 2196 (PO Box 61051, Marshalltown, 2107), South Africa, to reach
   the Transfer Secretaries on or before 10:00 on Thursday, 4 May 2017, being at least 48 hours
   (excluding Saturdays and Sundays and public holidays in South Africa) before the time appointed
   for the holding of the General Meeting.

Johannesburg
5 April 2017

Transaction Sponsor
Rand Merchant Bank, a division of FirstRand Bank Limited

Legal adviser to RBPlat
Bowmans                                (South African legal counsel)
Davis Polk & Wardwell London LLP       (International legal counsel)

Date: 05/04/2017 02:51:00 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.

Share This Story