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NORTHAM PLATINUM LIMITED - Acquisition of R293 million of Zambezi preference shares

Release Date: 02/09/2019 17:44
Code(s): NHM NHM002 NHM006 NHM007 NHM008 NHM009 NHM012 NHM010 NHM011     PDF:  
 
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Acquisition of R293 million of Zambezi preference shares

NORTHAM PLATINUM LIMITED
Incorporated in the Republic of South Africa
(Registration number 1977/003282/06)
Share code: NHM ISIN: ZAE000030912
Debt issuer code: NHMI
Bond code: NHM002       Bond ISIN: ZAG000129024
Bond code: NHM006       Bond ISIN: ZAG000158577
Bond code: NHM007       Bond ISIN: ZAG000158593
Bond code: NHM008       Bond ISIN: ZAG000158858
Bond code: NHM009       Bond ISIN: ZAG000158866
Bond code: NHM010       Bond ISIN: ZAG000159229
Bond code: NHM011       Bond ISIN: ZAG000159237
Bond code: NHM012       Bond ISIN: ZAG000160136
(“Northam”)

ACQUISITION OF R293 MILLION OF ZAMBEZI PREFERENCE SHARES

1.   INTRODUCTION

     Northam shareholders (“shareholders”) are referred to the announcement dated 30 August 2019
     (“previous announcement”) pertaining to the acquisition by Northam of preference shares in Zambezi
     Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”).

     Northam is pleased to announce that, since the date of the previous announcement, Northam has
     reached an agreement to acquire additional Zambezi preference shares, as detailed in paragraph 3
     below (“acquisition”). Following the acquisition, Northam will hold 23 388 840 Zambezi preference
     shares, representing approximately 14.6% of all Zambezi preference shares in issue.

2.   RATIONALE FOR THE ACQUISITION

     As stated in the previous announcement, Northam’s acquisition of Zambezi preference shares will
     reduce the preference share dividend expense and liability included in Northam’s consolidated financial
     statements, as well as Northam’s potential financial exposure under the guarantee it provided to holders
     of Zambezi preference shares, should the guarantee be called upon. Furthermore, should Zambezi elect
     to redeem the Zambezi preference shares through a distribution of ordinary shares in Northam
     (“Northam shares”) held by Zambezi, then the redemption of the Zambezi preference shares held by
     Northam at such time will result in a distribution of Northam shares to Northam, thereby reducing the
     number of Northam shares in issue.

3.   SMALL RELATED PARTY TRANSACTION

     Northam has reached agreement with Coronation Asset Management Proprietary Limited, acting as an
     investment manager on behalf of its clients (“Coronation”), pursuant to which Northam will acquire
     Coronation’s entire remaining shareholding of Zambezi preference shares, being 3 980 382 Zambezi
     preference shares, at a price of R73.50 per Zambezi preference share, for a total cash consideration of
     approximately R292.6 million. The acquisition will be funded from Northam’s cash reserves.

     The acquisition will be implemented on 30 September 2019, provided Northam obtains a fairness opinion
     confirming that the acquisition is fair to shareholders, as further detailed below.
     
     Coronation is a material shareholder of Northam, in that it is able to exercise voting control, on behalf of
     its clients, in excess of 10% of all Northam shares in issue. Accordingly, Coronation is a related party to
     Northam as contemplated in paragraph 10.1(b)(i) of the JSE Limited Listings Requirements
     (“Listings Requirements”) and the acquisition is categorised as a “small related party transaction” in
     terms of paragraph 10.7 of the Listings Requirements.

     The acquisition is not subject to shareholder approval, provided an independent professional expert
     confirms that the terms of the acquisition are fair to shareholders (“fairness opinion”). Further
     information regarding the fairness opinion will be published on SENS in due course.

4.   DETAILS OF THE ZAMBEZI PREFERENCE SHARES

     The Zambezi preference shares are cumulative, non-participating redeemable preference shares which
     accrue dividends at a nominal rate equal to the South African prime interest rate plus 3.5%, calculated on
     a daily basis, based on a 365-day year, compounded annually. The Zambezi preference shares were
     listed on the securities exchange operated by the JSE Limited on 11 May 2015.

     Subject to certain exceptions, the Zambezi preference shares are redeemable on 17 May 2025 and will
     be redeemed, at Zambezi’s election, in cash and / or through the distribution of Northam shares held by
     Zambezi. The redemption of the Zambezi preference shares is secured through a guarantee provided by
     Northam in favour of the holders of Zambezi preference shares. If the guarantee is exercised, Northam
     will, at its election, settle the associated liability using cash and / or through the issue of new Northam
     shares.

     As reported in the annual financial statements of Northam for the year ended 30 June 2019, the Zambezi
     preference share liability amounted to approximately R10.8 billion and the accumulated preference share
     dividends for the period amounted to approximately R1.3 billion. The acquisition by Northam of Zambezi
     preference shares will reduce the Zambezi preference share liability and accumulated preference share
     dividends recognised in Northam’s consolidated financial statements. The accounting policies adopted
     by Northam in the preparation of its annual financial statements are in accordance with the International
     Financial Reporting Standards.


Johannesburg
2 September 2019

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Date: 02/09/2019 05:44:00
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