HARMONY - SPECIFIC ISSUE OF SHARES FOR CASH
Release Date: 17/05/2001 17:30:25 Code(s): HAR
Not for release or distribution in or into the United States, Canada,
Australia or Japan.
Harmony Gold Mining Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1950/038232/06)
("Harmony" or "the Company")
SPECIFIC ISSUE OF SHARES FOR CASH
Shareholders of Harmony ("shareholders") are advised that the board of
directors of Harmony (the "Harmony Board") intends to seek authority for
a specific issue of a maximum of 30 million ordinary shares in Harmony
("Harmony shares") together with 10 million warrants, each warrant
entitling the holder to subscribe for one Harmony share ("Harmony
warrants"), for cash (the "specific issue"), and for the increase of
Harmony's authorised ordinary share capital from 180 million to
250 million Harmony shares.
Harmony's growth strategy is focused on building a leading international
gold mining company through acquisitions, organic growth and focused
exploration. Since undergoing a change of management in 1995, Harmony
has employed a successful strategy of growth through a series of
acquisitions. In this regard, Harmony recently completed the purchase
of the Elandsrand and Deelkraal mines from AngloGold Limited and
acquired in excess of 95% of New Hampton Goldfields Limited ("New
In March 2001, Harmony entered into a syndicated loan facility for
purposes of funding the acquisition of Elandsrand, Deelkraal and New
Hampton and for the refinancing of all of Harmony's long-term debt that
was in place prior to such refinancing (the "loan facility").
In order to sustain Harmony's growth strategy and repay a portion or all
of the loan facility, Harmony is seeking to raise equity on the local
and international capital markets by means of the specific issue.
2. DETAILS OF THE SPECIFIC ISSUE
Harmony intends to issue such number of new Harmony shares and Harmony
warrants, to be sold in multiples of three new Harmony shares and one
Harmony warrant, as is determined by the Harmony Board but which shall
not exceed a maximum number of 30 million new Harmony shares
(approximately 28% of Harmony's current issued ordinary share capital)
and 10 million Harmony warrants, by means of the specific issue.
The actual number of new Harmony shares and Harmony warrants to be
issued will depend on market conditions and other relevant factors. The
Harmony Board reserves the right to issue fewer than 30 million new
Harmony shares and 10 million Harmony warrants pursuant to the specific
issue, or not to proceed with the specific issue even if authorisation
2.2. The specific issue price
The issue price for each new Harmony share and warrant in terms of the
specific issue (the "specific issue price") is expected to be fixed by
the Harmony Board at the end of the bookbuilding process. In accordance
with normal South African practice, settlement is expected to take place
approximately three to five trading days later.
In determining the specific issue price, the Harmony Board will,
following a book building exercise, be guided by market conditions and
other relevant factors, which will result in a market-driven issue
2.3. The warrants
Each Harmony warrant will confer on the holder of such warrant the right
but not the obligation to subscribe for a Harmony share within a two-
year period from the date of issue of such warrant at the specific issue
2.4. Use of proceeds and minimum subscription
Harmony intends to use the proceeds of the specific issue for retiring a
portion of the loan facility and, as regards any amounts that may be
available thereafter, for the financing of future acquisitions, retiring
all or a portion of the remaining outstanding amount under the loan
facility, making capital expenditure and funding working capital.
The subscribers to the specific issue will be selected by JPMorgan and
the Company and subscriptions will only be accepted for amounts of
R100 000 or more from single addressees acting as principals.
2.5. Stock exchange listings
The Harmony shares are listed on the JSE Securities Exchange South
Africa (the "JSE"). In addition, the Harmony shares, in the form of
American Depository Shares, are quoted on the NASDAQ stock market in the
United States and in the form of international depository shares on
Euronext Brussels. The Harmony shares are also listed on Euronext Paris
and have been admitted to trading on the London Stock Exchange (the
Subject to the approval and implementation of the specific issue, the
JSE has granted a listing for a maximum number of 30 million new Harmony
shares in the Mining Resources - "Gold" sector of the JSE lists and of
10 million Harmony warrants, both to be issued pursuant to the specific
In order to offer the new Harmony shares and Harmony warrants in the
United States, it is necessary for the registration statement in respect
of the new Harmony shares and Harmony warrants, which has been filed
with the United States Securities and Exchange Commission (the "SEC"),
to be declared effective.
Application will be made for the admission of the new Harmony shares to
the United Kingdom Official List and for admission to trading on the LSE
and Euronext Paris.
2.6. Increase in authorised share capital
The Harmony Board deems it prudent that an excess of authorised over
issued share capital be maintained. Accordingly, it is proposed that
the authorised ordinary share capital of Harmony be increased to
250 000 000 Harmony shares from the current authorised ordinary share
capital of 180 000 000 Harmony shares. A special resolution providing
for such increase will be tabled for approval at the general meeting of
Harmony shareholders convened for such purpose.
3. CONDITIONS PRECEDENT
The specific offer is subject to the fulfilment of the following
* that a resolution in terms of section 5.68 of the Listings
Requirements of the JSE to approve the specific issue of the new Harmony
shares and the Harmony warrants for cash is passed by the requisite
majority of Harmony shareholders; and
* the provision by Harmony of an opinion in accordance with Rule 3.40 of
the JSE Listings Requirements, which requires that an independent expert
or experts acceptable to the Committee of the JSE indicate that the
issue of the Harmony warrants is fair and reasonable to Harmony
4. RESTRICTED DISTRIBUTION
This announcement is not an offer of securities for sale in the United
States. The Harmony shares and Harmony warrants may not be offered or
sold in the United States absent registration or an exemption from
registration. Any public offering of the Harmony shares and Harmony
warrants in the United States will be made by means of a prospectus that
may be obtained from Harmony and will contain detailed information about
Harmony and its management, as well as financial statements. Harmony
intends to register a portion of the Harmony shares and Harmony warrants
in the United States under the U.S. Securities Act of 1933.
A registration statement relating to the Harmony shares and Harmony
warrants has been filed with the SEC but has not yet become effective.
The Harmony shares and Harmony warrants may not be sold nor may offers
to buy be accepted prior to the time the registration statement becomes
effective. This release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the
Harmony shares and Harmony warrants in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
5. FURTHER DETAILS
A circular containing full details of the specific issue, including a
prelisting statement in compliance with the JSE Listings Requirements
and a notice of general meeting of Harmony shareholders was posted on
17 May 2001.
17 May 2001
Cliffe Dekker Fuller Moore Inc.
Reporting accountants and auditors