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NORTHAM PLATINUM LIMITED - Acquisition of R997.5 million of Zambezi preference shares

Release Date: 01/11/2019 13:45
Wrap Text
Acquisition of R997.5 million of Zambezi preference shares

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
Bond code: NHM013       Bond ISIN: ZAG000162181



     Northam shareholders (“shareholders”) are referred to the announcement dated 2 September 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 36 688 840 Zambezi preference shares,
     representing approximately 22.94% of all Zambezi preference shares in issue.


     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 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


     Northam has reached agreement with the Public Investment Corporation SOC Limited (“PIC”), pursuant to
     which Northam will acquire 13 300 000 Zambezi preference shares from the PIC today, 1 November 2019
     at a price of R75 per Zambezi preference share, for a total cash consideration of R997.5 million.

     The acquisition is not subject to any conditions precedent and will be funded from Northam’s cash reserves.

     The PIC is a material shareholder of Northam, in that within the preceding 12 months, it has been able to
     exercise voting control in excess of 10% of all Northam shares in issue. Accordingly, the PIC 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.

     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. Northam has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the
     independent expert for purposes of providing an opinion in respect of the fairness of the acquisition
     (“fairness opinion”).

     BDO has considered the terms and conditions of the acquisition and is of the opinion that the acquisition
     is fair to shareholders. A copy of the fairness opinion is available for inspection for a period of 28 days from
     the date of this announcement, at Northam’s registered office being, Building 4, 1 st Floor, Maxwell Office
     Park, Magwa Crescent West, Waterfall City, Jukskei View.

     Over the course of the past 12 months, Northam has acquired, in aggregate, 32 458 021 Zambezi
     preference shares. As a result of the aggregation provision contemplated in paragraph 9.11 read with
     paragraph 9.13(b) of the Listings Requirements, the acquisition is categorised as a “category 2 transaction”
     in terms of paragraph 9.5(a) of the Listings Requirements. Notwithstanding this, in terms of paragraph 10.7
     as read with paragraph 10.8 of the Listings Requirements, the acquisition is not a “related party transaction”
     as contemplated in paragraph 10.4 of the Listings Requirements and therefore is not subject to shareholder


     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

     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 further 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.

1 November 2019

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Independent Professional Expert to Northam
BDO Corporate Finance Proprietary Limited

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Date: 01/11/2019 01:45:00
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