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HARMONY GOLD MINING COMPANY LIMITED - Proposed placement of new ordinary shares

Release Date: 24/06/2020 17:00:00      Code(s): HAR       PDF(s):  
Proposed placement of new ordinary shares

Harmony Gold Mining Company Limited
(Registration number: 1950/038232/06)
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
JSE share code: HAR
(“Harmony” or the “Company”)


Not for distribution in the United States, Canada, Australia or
Japan


THIS ANNOUNCEMENT (“ANNOUNCEMENT”) IS FOR INFORMATION PURPOSES ONLY
AND SHALL NOT CONSTITUTE OR FORM A PART OF ANY OFFER OR SOLICITATION
TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE REPUBLIC OF SOUTH
AFRICA OR THE UNITED STATES OR IN ANY OTHER JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD REQUIRE APPROVAL OF LOCAL AUTHORITIES OR
OTHERWISE BE UNLAWFUL (EACH, A “RESTRICTED JURISDICTION?). THIS
ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND
IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN
WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, INCLUDING
ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR
THE DISTRICT OF COLUMBIA (THE “UNITED STATES”), CANADA, AUSTRALIA OR
JAPAN, OR IN ANY RESTRICTED JURISDICTION. PLEASE SEE THE “IMPORTANT
NOTICE” SECTION AT THE END OF THIS ANNOUNCEMENT.


PROPOSED PLACING OF NEW ORDINARY SHARES
Harmony Gold Mining Company Limited (“Harmony” or the “Company”)
announces its intention to conduct a placing of authorised but
unissued ordinary shares in the Company (the “Placing Shares”)
(pursuant to a general authority to issue ordinary shares for cash)
to qualifying investors who have agreed to subscribe therefor (the
“Placing”) to raise approximately US$200 million (ZAR 3.466 billion)
of gross subscription proceeds (the "Proceeds"). The Placing is being
executed in terms of the authorities granted at the extraordinary
general meeting of the shareholders of the Company held on 11 June
2020.
The Placing is being conducted through an accelerated bookbuilding
process (the “Bookbuild”) which will be launched immediately following
the release of this Announcement.
Use of proceeds
As announced on 12 February 2020, Harmony has entered into a definitive
agreement with AngloGold Ashanti Limited (“AngloGold Ashanti”) to
acquire AngloGold Ashanti’s South African assets Mponeng and Mine
Waste Solutions (the “Acquisition”). If the last of the conditions

                                                                      1
precedent to the Acquisition is fulfilled on or before the 20th
calendar day in any calendar month, then the Acquisition will become
effective and closing will take place on the last business day of that
month. If the last of the conditions precedent is fulfilled after
the 20th calendar day in any month, then the Acquisition will become
effective and closing will take place on the last business day of the
following month. The only remaining condition precedent is to secure
Section 11 approval from the Department of Mineral Resources and
Energy.
The Proceeds will be used by the Company in order to discharge part
of the initial acquisition consideration which becomes payable on the
closing date of the Acquisition.


Details of the Placing
The Placing will be conducted through the Bookbuild and the book will
open with immediate effect following the release of this Announcement.
J.P. Morgan Securities plc is acting as Sole Global Coordinator and
Joint Bookrunner (the “Sole Global Coordinator”) and Absa Bank Limited
(acting through its Corporate and Investment Banking division) is
acting as Joint Bookrunner (together with J.P. Morgan, the “Joint
Bookrunners”) in connection with the Placing.
The Placing will be carried out through a general authority to issue
ordinary shares for cash, subject to the restrictions set out in the
Listings Requirements of the JSE Limited (“JSE Listings Requirements”).
The Bookbuild is being offered to qualifying investors only (as set
out in greater detail under “Important Notice” below) and is not an
offer to the public in any jurisdiction.
The price per ordinary share at which the Placing Shares are to be
placed (the “Placing Price”) will be determined at the close of the
Bookbuild. The timing of the closing of the Bookbuild, the Placing
Price and allocations are at the discretion of Harmony and the Joint
Bookrunners. Details of the number of Placing Shares and the Placing
Price will be announced as soon as practicable following the closing
of the Bookbuild. It is expected that listing and trading (the
"Admission") of the Placing Shares on the JSE will commence on or
around 25 June 2020 (or such later date as may be agreed between the
Company and the Joint Bookrunners) and that dealings in the Placing
Shares will commence at the same time. The Placing is conditional
upon, amongst other things, the Admission becoming effective and the
agreement between the Company and the Joint Bookrunners in respect of
the Placing not being terminated in accordance with its terms prior
to the Admission. The Placing is not conditional on the conditions
precedent to the Acquisition being fulfilled.
The Placing Shares, when issued, will rank pari passu in all respects
with the existing Harmony ordinary shares, including the right to
receive all dividends and other distributions declared, made or paid
after the date of issue of the Placing Shares.

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Harmony has agreed, subject to certain exclusions, to a lock-up of 90
days from settlement of the Placing.


Update on Harmony’s operations and balance sheet


Harmony’s swift and decisive COVID-19 mitigating measures, combined
with a supportive gold price environment, have supported the Company’s
viability and the livelihoods of many stakeholders dependent on the
Company.
The build-up of the Company’s South African underground mines to the
permitted 50% of labour capacity from mid-April 2020 through May 2020
resulted in an increase in gold sales from the South African operations
from approximately 1 tonne in April 2020 to approximately 1.7 tonnes
in May 2020. The Hidden Valley mine in Papua New Guinea continued to
operate at close to normal levels during this period. Management is
expecting a return to 100% of production by mid-July 2020, assuming
no further negative impacts due to COVID-19 lockdown provisions.
The Company’s net debt position through May 2020 increased by
approximately R400 million (approximately US$28 million) from the R5.0
billion (US$280 million) reported at the end of March 2020 to R5.4
billion (US$308 million) at the end of May 2020.
Harmony has engaged and reached agreement with its lenders that the
Tangible Net Worth to Net Debt covenant would be relaxed and maintained
at above two times (from four times previously) until December 2020.
The Company continues to comply with all debt covenants.
The impact of COVID-19 on Harmony’s employees continues to be
rigorously managed through application of both the Company’s Standard
Operating Procedure and the regulated Code of Practice.


Notes
The US dollar to South African rand exchange rate used in this
Announcement is ZAR17.33/US$ as at 16:00 South African time on 24 June
2020.




                                                                      3
Johannesburg
24 June 2020


For further information, please contact:
Marian van der Walt
Executive: Corporate and Investor Relations
+27 (0) 82 888 1242 (mobile)


Max Manoeli
Senior Investor Relations Coordinator
+27 (0) 82 759 1775 (mobile)


Financial adviser to the Company: Rothschild & Co. South Africa
JSE Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
Sole Global Coordinator: J.P. Morgan Securities plc
Joint Bookrunners: J.P. Morgan Securities plc and Absa Bank Limited
(acting through its Corporate and Investment Banking division)
South African legal counsel to the Company: Edward Nathan Sonnenbergs
Inc.
U.S and U.K. legal counsel to the Company: Hogan Lovells US LLP
U.S. and U.K. legal counsel to the Joint Bookrunners: Davis Polk &
Wardwell London LLP
South African legal counsel to the Joint Bookrunners: Bowman Gilfillan
Inc.
Important Notice
This Announcement is for information purposes only and shall not
constitute or form a part of any offer or solicitation to purchase or
subscribe for securities in the Republic of South Africa, the United
States or in any other jurisdiction in which such offer or solicitation
would require approval of local authorities or otherwise be unlawful
(each, a “Restricted Jurisdiction”). This Announcement and the
information contained herein is restricted and is not for publication
or distribution, directly or indirectly, in whole or in part, in or
into the United States, Canada, Australia or Japan, or in any other
Restricted Jurisdiction. Any failure to comply with these restrictions
may constitute a violation of the securities laws of such
jurisdictions.
The Placing Shares have not been and will not be registered under the
U.S. Securities Act of 1933, as amended (“Securities Act”), or with

                                                                      4
any securities regulatory authority of any state or other jurisdiction
of the United States and may not be offered, sold, resold, delivered
or otherwise distributed absent registration, except in reliance on
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in compliance with any
applicable securities laws of any state or other jurisdiction of the
United States. There will be no public offering of the Placing Shares
in the United States or in any other Restricted Jurisdiction.
THE PLACING SHARES ACQUIRED BY PERSONS OUTSIDE THE UNITED STATES MAY
NOT BE OFFERED, SOLD, RESOLD, DELIVERED OR OTHERWISE DISTRIBUTED IN
OR INTO THE UNITED STATES OR TO ANY U.S. PERSON (AS DEFINED BY
REGULATION S UNDER THE SECURITIES ACT) OR DEPOSITED INTO THE COMPANY’S
AMERICAN DEPOSITARY RECEIPT (“ADR”) PROGRAM UNTIL A MINIMUM OF 40 DAYS
AFTER THE SETTLEMENT OF THE PLACING AND THE COMPANY’S ADRs MAY NOT BE
USED IN ANY HEDGING TRANSACTION THAT INCLUDES ANY PLACING SHARES AND
BY ACQUIRING PLACING SHARES IN THE OFFERING FROM OUTSIDE THE UNITED
STATES, YOU WILL BE DEEMED TO AGREE TO THE FOREGOING RESTRICTIONS.
The Company will instruct Deutsche Bank Trust     Company Americas, as
depositary, not to accept any Placing Shares     for deposit into the
Company’s American Depositary Receipt Program     in exchange for the
issuance of ADRs evidencing Harmony’s American   Depositary Shares for
40 days after settlement of the Placing.
Any offer, sale, resale, delivery or other distribution of the Placing
Shares within the United States during this 40-day period by any
dealer (whether or not participating in the Placing) may violate the
registration requirements of the Securities Act if such offer or sale
is made otherwise than pursuant to an exemption from, on in a
transaction not subject to, the registration requirements of the
Securities Act.
In South Africa, the Placing will only be made by way of separate
private placements to: (i) selected persons falling within one of the
specified categories listed in section 96(1)(a) of the South African
Companies Act); and (ii) selected persons, acting as principal,
acquiring Placing Shares for a total contemplated acquisition cost of
R1,000,000 or more, as contemplated in section 96(1)(b) of the South
African Companies Act ("South African Qualifying Investors"). This
Announcement is only being made available to such South African
Qualifying Investors. Accordingly: (i) the Placing is not an “offer
to the public” as contemplated in the South African Companies Act;
(ii) this Announcement does not, nor does it intend to, constitute a
“registered prospectus” or an “advertisement”, as contemplated by the
South African Companies Act; and (iii) no prospectus has been filed
with the South African Companies and Intellectual Property Commission
("CIPC") in respect of the Placing. As a result, this Announcement
does not comply with the substance and form requirements for a
prospectus set out in the South African Companies Act and the South
African Companies Regulations of 2011, and has not been approved by,
and/or registered with, the CIPC, or any other South African authority.


                                                                      5
The information contained in this Announcement constitutes factual
information as contemplated in section 1(3)(a) of the South African
Financial Advisory and Intermediary Services Act, 37 of 2002, as
amended ("FAIS Act") and should not be construed as an express or
implied recommendation, guide or proposal that any particular
transaction in respect of the Placing Shares or in relation to the
business or future investments of the Company, is appropriate to the
particular investment objectives, financial situations or needs of a
prospective investor, and nothing in this Announcement should be
construed as constituting the canvassing for, or marketing or
advertising of, financial services in South Africa. The Company is
not a financial services provider licensed as such under the FAIS Act.
No public offering of the Placing Shares is being made in the United
Kingdom. In the United Kingdom, all offers of the Placing Shares will
be made pursuant to an exemption under the Prospectus Regulation (as
defined below) from the requirement to produce a prospectus. No
prospectus will be made available in connection with the Placing and
no such prospectus is required to be published in accordance with the
Prospectus Regulation.
This Announcement is for information purposes only and is directed
only at, and communicated to, persons (a) in Member States of the
European Economic Area who are qualified investors (“Qualified
Investors”) within the meaning of article 2(1)(e) of the EU Prospectus
Regulation (which means Regulation (EU) 2017/1129, as amended) (the
“Prospectus Regulation”) and (b) in the United Kingdom who are
Qualified Investors and (i) investment professionals falling within
Article 19(5) of the UK Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”), (ii) high net worth
entities falling within Article 49(2)(a) to (d) of the Order or (iii)
other persons to whom they may lawfully be communicated, (each such
persons being referred to as “Relevant Persons”). In Member States of
the European Economic Area, this Announcement must not be acted on or
relied on by persons who are not Relevant Persons. Persons
distributing this Announcement must satisfy themselves that it is
lawful to do so. Any investment or investment activity to which this
Announcement relates is available only in a Member State of the
European Economic Area or the United Kingdom to Relevant Persons and
will be engaged in only with Relevant Persons.
This Announcement has been issued by, and is the sole responsibility
of, the Company. No representation or warranty, express or implied,
is or will be made as to, or in relation to, and no responsibility or
liability is or will be accepted by J.P. Morgan Securities plc and
Absa Bank Limited, acting through its Corporate and Investment Banking
division, or by any of their respective affiliates or agents as to or
in relation to, the accuracy or completeness of this Announcement or
any other written or oral information made available to or publicly
available to any interested party or its advisers, and any liability
therefore is expressly disclaimed.



                                                                     6
Each Joint Bookrunner and its respective affiliates are acting solely
for the Company and no one else in connection with the Placing and
will not be responsible to anyone other than the Company for providing
the protections afforded to its clients nor for providing advice in
relation to the Placing and/or any other matter referred to in this
Announcement. Apart from the responsibilities and liabilities, if any,
which may be imposed on each Joint Bookrunner or its affiliates by
its respective regulatory regimes, neither any Joint Bookrunner nor
any of its respective affiliates accepts any responsibility whatsoever
for the contents of the information contained in this Announcement or
for any other statement made or purported to be made by or on behalf
of any Joint Bookrunner or any of its respective affiliates in
connection with the Company, the Placing Shares or the Placing. Each
Joint Bookrunner and each of its respective affiliates accordingly
disclaim all and any responsibility and liability whatsoever, whether
arising in tort, contract or otherwise (save as referred to above) in
respect of any statements or other information contained in this
Announcement and no representation or warranty, express or implied,
is made by each Joint Bookrunner or any of its respective affiliates
as to the accuracy, completeness or sufficiency of the information
contained in this Announcement.
The distribution of this Announcement and the offering of the Placing
Shares in certain jurisdictions may be restricted by law. No action
has been taken by the Company or any Joint Bookrunner that would
permit an offering of such shares or possession or distribution of
this Announcement or any other offering or publicity material relating
to such shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this Announcement comes are
required by the Company and the Joint Bookrunners to inform themselves
about, and to observe, such restrictions.
This Announcement contains forward-looking statements within the
meaning of the safe harbor provided by Section 21E of the U.S.
Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act with respect to the Company’s financial condition,
results of operations, business strategies, operating efficiencies,
competitive positions, growth opportunities for existing services,
plans and objectives of management, markets for stock and other
matters. These include all statements other than statements of
historical fact, including, without limitation, any statements
preceded by, followed by, or that include the words “targets”,
“believes”,    “expects”,   “aims”,    “intends”,   “will”,    “may”,
“anticipates”, “would”, “should”, “could”, “estimates”, “forecast”,
“predict”, “continue” or similar expressions or the negative thereof.
Any forward-looking statements, including, among others, those
relating to the Company’s future business prospects, revenues and
income, wherever they may occur in this Announcement, are necessarily
estimates reflecting the best judgment of the Company’s senior
management and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the
forward-looking statements. As a consequence, you should not place

                                                                     7
undue reliance on forward-looking statements as a prediction of actual
results. Statements contained in this Announcement regarding past
trends or activities should not be taken as a representation that such
trends or activities will continue in the future. No statement in this
Announcement is or is intended to be a profit forecast or profit
estimate or to imply that the earnings of the Company for the current
or future financial years will necessarily match or exceed the
historical or published earnings of the Company.
The information contained in this Announcement is subject to change
without notice and, except as required by applicable law, the Company
and each Joint Bookrunner do not assume any responsibility or
obligation to update publicly or review any of the forward-looking
statements contained in it and nor do they intend to.
This Announcement does not identify or suggest, or purport to identify
or suggest, the risks (direct or indirect) that may be associated with
an investment in the Placing Shares. Any investment decision to
acquire Placing Shares in the Placing must be made solely on the basis
of publicly available information, which has not been independently
verified by any Joint Bookrunner.
The information in this Announcement may not be forwarded or
distributed to any other person and may not be reproduced in any
manner whatsoever. Any forwarding, distribution, reproduction or
disclosure of this information in whole or in part is unauthorised.
Failure to comply with this directive may result in a violation of
the Securities Act or the applicable laws of other jurisdictions.
This Announcement does not represent the announcement of a definitive
agreement to proceed with the Placing and, accordingly, there can be
no certainty that the Placing will proceed. Harmony reserves the right
not to proceed with the Placing or to vary any terms of the Placing
in any way.
The Placing Shares to be issued pursuant to the Placing will not be
admitted to trading on any stock exchange other than the Johannesburg
Stock Exchange.
Persons who are invited to and who choose to participate in the Placing
by making an offer to take up Placing Shares, will be deemed to have
read and understood this Announcement in its entirety and to be making
such offer on the terms and conditions, and to be providing the
representations, warranties, acknowledgements and undertakings,
contained herein. Each such placee represents, warrants and
acknowledges that it is a person eligible to purchase or subscribe
for the Placing Shares in compliance with the restrictions set forth
herein and applicable laws and regulations in its home jurisdiction
and in the jurisdiction (if different) in which it is physically
resident. Unless otherwise agreed in writing, each placee represents,
warrants and acknowledges that it is (a) not located in, a resident
of, or physically present in, the United States, Canada, Australia,
Japan or any Restricted Jurisdiction and it is not acting on behalf
of someone who is located in, a resident of, or physically present in,

                                                                      8
the United States, Canada, Australia, Japan or any Restricted
Jurisdiction and (b) not a U.S. person (as that term is defined in
Regulation S under the Securities Act).
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in financial
instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of
Commission Delegated Directive (EU) 2017/593 supplementing MiFID II;
and (c) local implementing measures (together, the “MiFID II Product
Governance Requirements”), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any
“manufacturer” (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that such securities are: (i) compatible with an end target
market of retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined in
MiFID II; and (ii) eligible for distribution through all distribution
channels as are permitted by MiFID II (the “Target Market Assessment”).
Notwithstanding the Target Market Assessment, distributors should note
that: the price of the Placing Shares may decline and investors could
lose all or part of their investment; the Placing Shares offer no
guaranteed income and no capital protection; and an investment in the
Placing Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are
capable of evaluating the merits and risks of such an investment and
who have sufficient resources to be able to bear any losses that may
result therefrom. The Target Market Assessment is without prejudice
to the requirements of any contractual, legal or regulatory selling
restrictions in relation to the Placing. Furthermore, it is noted
that, notwithstanding the Target Market Assessment, the Joint
Bookrunners will only procure investors who meet the criteria of
professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for
the purposes of MiFID II; or (b) a recommendation to any investor or
group of investors to invest in, or purchase, or take any other action
whatsoever with respect to the Placing Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining
appropriate distribution channels.
NOTWITHSTANDING ANYTHING IN THE FOREGOING, NO PUBLIC OFFERING OF THE
PLACING SHARES IS BEING MADE BY ANY PERSON ANYWHERE AND THE COMPANY
HAS NOT AUTHORISED OR CONSENTED TO ANY SUCH OFFERING IN RELATION TO
THE PLACING SHARES.




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Date: 24-06-2020 05:00:00
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