| Tue 28 Apr 2009, 9:17 | | LBT - Liberty International Plc - Intention to rai |
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LBT
LILII
LBT - Liberty International Plc - Intention to raise approximately
GBP500-600 Million via an issue of new ordinary shares
Liberty International Plc
Registration number UK3685527)
ISIN: GB0006834344
JSE Code: LBT
Issuer Code: LILI I
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR
JAPAN.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT. IT IS NOT A PROSPECTUS AND
INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO
IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION IN THE
PROSPECTUS TO BE PUBLISHED BY LIBERTY INTERNATIONAL PLC IN CONNECTION
WITH THE PROPOSED CAPITAL RAISING. COPIES OF THE PROSPECTUS WILL,
FOLLOWING PUBLICATION, BE AVAILABLE FROM THE COMPANY`S REGISTERED
OFFICE AND ON ITS WEBSITE AT WWW.LIBERTY-INTERNATIONAL.CO.UK
ALL TERMS ARE DEFINED AT THE BACK OF THIS ANNOUNCEMENT, UNLESS
OTHERWISE DEFINED HEREIN.
LIBERTY INTERNATIONAL PLC
INTENTION TO RAISE APPROXIMATELY GBP500-600 MILLION VIA AN ISSUE OF NEW
ORDINARY SHARES
The Board of Liberty International PLC ("Liberty International" or the
"Company") today announces its intention to raise gross proceeds of
approximately GBP500-600 million by means of a Firm Placing and a
Placing and Open Offer of New Ordinary Shares. The New Ordinary Shares
will be issued at the Issue Price determined by a market book build
process which commences today and is expected to close on Tuesday 28
April 2009.
The Gordon Family Interests, which currently hold 79.2 million ordinary
shares (21.7 per cent. of the current issued ordinary share capital),
have agreed to subscribe for GBP30 million of New Ordinary Shares in
the Firm Placing at the Issue Price. The Gordon Family Interests have
also committed to subscribe for an additional GBP10 million of New
Ordinary Shares at the Issue Price under their entitlement as
shareholders in the Open Offer
Excluding the Gordon Family Interests` subscriptions of GBP30 million
in the Firm Placing, the GBP470-570 million issue of New Ordinary
Shares will comprise a GBP235-285 million firm offer of New Ordinary
Shares to Placees and a GBP235-285 million offer, subject to clawback,
of New Ordinary Shares to Placees, each at the Issue Price. Under the
Placing and Open Offer, the Placees will agree to subscribe for the
Open Offer Shares subject to clawback in respect of valid applications
for the Open Offer Shares by Qualifying Shareholders. The Placees will
agree to subscribe for an equal number of shares in the Firm Placing
and in the Placing and Open Offer. The Open Offer will be made to all
Qualifying Shareholders at the Issue Price in proportion to the number
of Existing Ordinary Shares held on the relevant Record Date. Subject
to availability, the Excess Application Facility will enable Qualifying
Shareholders to apply for additional New Ordinary Shares equal to their
pro rata entitlement to the Open Offer Shares. The subscription for the
Firm Placed Shares is not subject to clawback by Qualifying
Shareholders. The terms and conditions of the Placings are set out in
the Appendix to this Announcement.
Admission is expected to occur and dealings in the New Ordinary Shares
are expected to commence on the London Stock Exchange at 8.00 a.m. on
28 May 2009. The New Ordinary Shares are expected to be listed on the
Johannesburg Stock Exchange at 9.00 a.m. (South African time) on 28 May
2009. The New Ordinary Shares will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares.
The issue of the New Ordinary Shares under the Capital Raising is
conditional on the passing of a special resolution by shareholders at
an Extraordinary General Meeting expected to be held at 10.00 a.m. on
22 May 2009 (or such later time and/or date as the Company may notify
to Shareholders).
The proceeds of the Capital Raising (net of expenses of approximately
GBP25 million) will reduce net indebtedness, increase the Group`s
available cash and undrawn committed financing facilities, improve
financial ratios and increase financial flexibility.
Merrill Lynch International and UBS Investment Bank are acting as joint
sponsors and brokers, HSBC Bank plc, Merrill Lynch and UBS Investment
Bank are acting as joint lead managers and Barclays Capital and RBS
Hoare Govett are acting as joint co-managers on behalf of Liberty
International in respect of the Capital Raising. Goldman Sachs
International is acting as financial adviser to the Company in relation
to the Capital Raising.
A prospectus will be published and a circular will be sent to
Shareholders in due course containing full details of how Qualifying
Shareholders can participate in the Open Offer. The Prospectus will
also be available to Qualifying Shareholders eligible to participate in
the Open Offer free of charge, at Liberty International`s registered
office and on Liberty International`s website at www.liberty-
international.co.uk.
Company and Transaction Highlights
* Liberty International has a high quality and defensive UK regional
shopping centre and retail property business
* The Group has a predominantly non-recourse debt structure that
provides financial flexibility
* The Capital Raising is part of management actions to improve the
liquidity and financial strength of the Company
* The Capital Raising is intended to provide the Group with
financial flexibility to deal with any further declines in
property values in 2009 and beyond and positions the Group to
benefit from any market recovery in due course
* The Board believes that this transaction structure provides
greater certainty for the Company than a rights issue in raising
the requisite equity capital
Trading update
Liberty International today released its Interim Management Statement
for the period from 1 January 2009 to 27 April 2009.
The full announcement is available at Liberty International`s website
at www.liberty-international.co.uk
Liberty International
The Group is well placed within the property industry, as the market
leader in prime UK regional shopping centres, and has always focused on
the highest quality defensive retail assets, with the Group`s ownership
including nine of the UK`s top 30 regional shopping centres, and
central London assets such as Covent Garden.
The Board and management believe that this portfolio of UK regional
shopping centres will, notwithstanding a moderate reduction in
occupancy level as a result of recent tenant failures, continue to
provide retailers with attractive locations and substantial customer
flow.
However, the ongoing turbulence in financial markets has continued to
significantly impact the UK commercial property sector with substantial
declines in property valuations, widespread market evidence of
difficult conditions for achieving property disposals or obtaining bank
finance, an increased level of tenant defaults and greater reluctance
by tenants to make decisions in respect of new lettings. As a result,
property values in the UK, as measured by the IPD Index, weakened by
35.6 per cent. in the 18 months to 31 December 2008 and by a further
8.9 per cent. in the three months to 31 March 2009. The Group`s
property valuations have outperformed the IPD Index, but nevertheless
have fallen by 27.2 per cent. and a further 8.5 per cent. in the 18
months to 31 December 2008 and three months to 31 March 2009,
respectively. As at 31 March 2009 the Group`s investment and
development properties were valued at GBP6.4 billion, a decrease of
GBP0.6 billion since 31 December 2008 taking into account capital
expenditure, asset disposals and currency movements in the period.
There have been declines and it is widely anticipated that there will
continue to be further declines in commercial property values in the UK
during 2009, reflected by the discount to reported historical net asset
values at which the share prices of UK-listed real estate companies
currently trade, and the current pricing of derivative contracts linked
to the forward performance of the IPD Index.
Group debt structure
The Group has a predominantly non-recourse debt structure with around
93 per cent. of the Group`s GBP4.0 billion of net external debt as at
31 March 2009 being asset specific and non-recourse which provides
flexibility to address its obligations, including curing potential
covenant breaches, on an asset-by-asset basis. Potential remedies at an
asset level include cash deposits or additional security, partial
repayment and the renegotiation of covenants.
Despite the flexibility of the Group`s existing capital structure, the
Board has determined that it is in the long-term interests of Liberty
International and its shareholders to undertake the Capital Raising as
part of an overall action programme to improve the Group`s liquidity
position and to provide further flexibility to address the challenges
ahead from a position of strength.
Management actions
In addition to the Capital Raising, the components of the action
programme include:
* reducing capital expenditure and deferring projects other than
where already committed;
* reducing administrative expenses; following cost saving measures
including headcount reduction in 2008, the Group is targeting a
reduction in administrative expenses for 2009 to GBP45 million,
compared to GBP63 million in 2008;
* refining the Group`s strategic focus in recognition of the reduced
availability of long-term finance; the Board and management view
the UK regional shopping centre business of CSC and the Central
London activities of Capco, particularly Covent Garden and Earls
Court, as the key components for the future long-term success of
the business;
* continuing the programme of disposals of non-core assets which
totalled GBP200 million in 2008 and GBP340 million in 2007.
Disposals to date in 2009 amount to GBP172 million, of which
GBP120 million has completed, GBP22 million has exchanged and
GBP30 million is under offer. In addition the Group has realised
GBP31 million from the disposal of internal and third party CMBS
notes;
* engaging with its corporate lending banks to stabilise the
financial position of the Group by amending key lending
conditions, thereby reducing the risks of any covenant breach in
these facilities;
* increasing the equity capital base through the early conversion
into Ordinary Shares of GBP32 million of Convertible Bonds; and
* restricting the 2008 dividend to the 16.5 pence per share interim
dividend already paid which exceeds the expected minimum PID
requirement for 2008 of 12.8 pence per share.
Effects of the Capital Raising
The Capital Raising will improve the Group`s debt to assets and
interest cover ratios, augment the Group`s cash resources, extend its
debt maturity profile, and increase the Group`s financial flexibility
in this uncertain market environment. The proceeds from the Capital
Raising will immediately reduce the Group`s overall net debt position
and will be available for use as described below.
The net proceeds will also substantially increase the Group`s cash and
undrawn committed financing facilities from the GBP313 million reported
at 31 March 2009 and will provide the Group with financial flexibility
to deal with further declines in property values in 2009 and beyond.
Combined with the intended disposals of non-core assets, the Group will
have cash resources to meet the Group`s expected funding requirements
for the last nine months of 2009 and 2010, in particular:
* GBP187 million of committed capital expenditure;
* GBP184 million of scheduled debt amortisation and repayment;
* GBP19 million REIT entry charge; and
* amounts required for curing potential covenant breaches on non-
recourse debt structures.
The Board has considered the focus of equity markets on funding sources
and refinancing risk, recognising that real estate is a capital-
intensive industry and under particular scrutiny. The Board believes
that by addressing this proactively it will ensure the Group is well
positioned to fund its obligations through operating cash flow, cash
resources and existing debt facilities and benefit when the market
recovers in due course.
The Board believes that this transaction structure provides greater
certainty for the Company than a rights issue in raising the requisite
equity capital (taking into account the particular nature of its share
ownership, with around 48 per cent. of shares held on the South African
register).
As noted above, the Group is pursuing an action programme to improve
the Group`s liquidity position and to provide flexibility going
forward. The Capital Raising is a significant part of that action
programme and the Directors therefore believe it is important that the
Capital Raising is completed. If the Capital Raising is not completed,
there will be a number of consequences for the Group; in particular,
the recently agreed revised covenants relating to its revolving
facilities with its corporate lenders will not come into effect unless
the Group can raise equity in excess of GBP350 million in a separate
transaction or a waiver of this condition is granted by the lenders.
There have been declines, and it is widely anticipated that there will
continue to be further declines, in commercial property values in the
UK during 2009 and any such declines may result in the existing
covenants in such facilities being breached and/or the Group having
insufficient cash to cure the potential covenant breaches in its non-
recourse debt which these declines may cause. In such circumstances,
the Group would expect to reduce its dividend to the minimum PID
requirement, seek alternative sources of capital and financing (which
may not be available or may not be available on acceptable terms), and,
more importantly, expect to have to extend its programme of disposals
beyond non-core assets in the absence of such alternative capital or
financing. The Directors do not consider it would be in the best
interests of shareholders to extend its disposal programme in that way
in the current economic environment. In addition, the Group might also,
if it were to determine that it would ultimately be in the best
interests of Shareholders to do so, cede ownership of certain assets to
its lenders.
Modification of Company`s revolving credit facilities
The Company`s GBP360 million unsecured revolving credit facilities with
its corporate lenders, HSBC, Lloyds Bank, Barclays Bank and The Royal
Bank of Scotland carry covenants which may be breached in the event of
a sustained reduction in property values and have recently been
renegotiated to reduce the risk of breach and introduce a common final
maturity date of 10 June 2011. The modified credit facility is only
available for drawdown and the recently agreed reduced covenants will
only come into effect once the Company has raised not less than GBP350
million from equity issuances. The Capital Raising would satisfy this
condition. Until the Company has raised, from equity issuances
totalling in excess of GBP350 million (net), permitted financings
and/or (subject to certain exceptions) asset disposals, GBP100 million
in 2009 and a further GBP100 million in 2010, it is restricted from (i)
paying dividends and making other distributions (above the amount
required to maintain its status as a REIT) and (ii) injecting cash in
excess of GBP200 million into certain non-recourse subsidiaries. Taking
into account asset disposals in 2009 and the size of the Capital
Raising, the Company will have already raised in excess of GBP200
million for these purposes.
Dividends and dividend policy
In respect of 2008, the Group has restricted the dividend on its
ordinary share to the 16.5 pence per share interim dividend already
paid which exceeds the expected minimum PID requirement for 2008 of
12.8 pence per ordinary share.
The Board would also seek to maintain, subject to available resources,
the intended dividend for 2009 at the level of 16.5 pence per ordinary
share or the minimum PID requirement if greater. The dividend policy
for future years will be kept under review.
Enquiries (analysts and investors only):
Liberty International
Issuer
Tel: +44 (0) 207 960 1200
David Fischel
Ian Durant
Merrill Lynch International
Joint Sponsor, Joint Broker and Joint Lead Manager
Tel: +44 (0) 207 628 1000
Simon Mackenzie-Smith
Simon Fraser
Rupert Hume-Kendall
UBS Investment Bank
Joint Sponsor, Joint Broker and Joint Lead Manager
Tel: +44 (0) 207 567 8000
John Woolland
Fergus Horrobin
Christopher Smith
HSBC Bank plc
Joint Lead Manager
Tel: +44 (0) 207 991 8888
Nick Donald
Goldman Sachs International
Tel: +44 20 7774 1000Andy Richard
Advisers
Merrill Lynch International and UBS Limited are acting as joint
sponsors and joint brokers on behalf of Liberty International in
respect of the Capital Raising. HSBC Bank, Merrill Lynch International
and UBS Limited are acting as joint lead managers on behalf of Liberty
International in respect of the Capital Raising. Goldman Sachs
International is acting as a financial adviser to the Company in
relation to the Capital Raising. Barclays Capital and RBS Hoare Govett
are acting as co-lead managers in respect of the Capital Raising.
A copy of the Prospectus, if and when published, will be available from
the registered office of Liberty International at 40 Broadway, London
SW1H 0BT and on the Liberty International website at www.liberty-
international.co.uk. The Prospectus (if published) will also be
available for inspection during normal business hours on any weekday
(Saturdays, Sundays and public holidays excepted) at the offices of
Linklaters LLP, One Silk Street, London EC2Y 8HQ and at the offices of
Merrill Lynch South Africa (Pty) Ltd, 138 West Street, Sandown, Sandton
2196, South Africa, up to and including the date of Admission.
This Announcement is not a prospectus but an advertisement and
Qualifying Shareholders should not subscribe for any Open Offer Shares
referred to in this Announcement except on the basis of the information
contained in the Prospectus and the Circular.
Neither the content of Liberty International`s website nor any website
accessible by hyperlinks to Liberty International`s website is
incorporated in, or forms part of, this Announcement. The distribution
of this Announcement, the Prospectus and any other documentation
associated with the Firm Placing and Placing and Open Offer and/or the
transfer of the New Ordinary Shares into jurisdictions other than the
United Kingdom may be restricted by law. Persons into whose possession
these documents come should inform themselves about and observe any
such restrictions. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction.
In particular, such documents should not be distributed, forwarded to
or transmitted, directly or indirectly, in whole or in part, in or into
Australia or Canada or Japan or the United States. No action has been
taken by Liberty International that would permit an offer of the New
Ordinary Shares or possession or distribution of this Announcement, the
Prospectus or any other offering or publicity material or the
Application Forms or SA Application Forms in any jurisdiction where
action for that purpose is required, other than in the United Kingdom.
The New Ordinary Shares have not been, and will not be, registered
under the United States Securities Act of 1933 or with any securities
regulatory authority of any state or other jurisdiction of the United
States, and may not be offered, sold, taken up, exercised, resold,
renounced, transferred or delivered, directly or indirectly, in the
United States except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and
in compliance with the securities laws of any state or other
jurisdiction of the United States. No public offering of any of the New
Ordinary Shares will be made in the United States. The New Ordinary
Shares are being offered and sold outside the United States in reliance
on Regulation S under the Securities Act and in the United States
pursuant to an exemption from registration under the Securities Act in
a transaction not involving any public offering. No public offering of
the New Ordinary Shares will be made in the United States. The New
Ordinary Shares have not been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission in
the United States or any other regulatory authority in the United
States, nor have any of the foregoing authorities passed upon or
endorsed the merits of the Capital Raising or the accuracy or adequacy
of this Announcement. Any representation to the contrary is a criminal
offence. This Announcement may not be released, published or
distributed, directly or indirectly, in whole or in part, in or into
the United States.
South African residents, comprising natural persons, should be aware
that they will not be able to participate in the Capital Raising if
they have utilised their foreign investment allowance or do not hold
funds outside of South Africa with the approval of the SARB. Corporate
shareholders (other than retirement funds, long-term insurers,
collective investment scheme management companies and investment
managers, collectively referred to as "institutional investors"),
trusts and estates that are South African Resident Shareholders are not
entitled to a foreign investment allowance and are thus precluded from
participating in the Capital Raising under the current exchange control
regulations. Foreign portfolio investments by institutional investors
are also subject to certain limits based on an institution`s total
retail assets. South African Resident Shareholders should obtain
through an authorised dealer any necessary approval or establish that
an existing exchange control approval or exemption applies to such
investment.
The New Ordinary Shares also have not been and will not be registered
under the securities laws of any Excluded Territory or any state,
province or territory thereof and may not be offered, sold, taken up,
exercised, resold, renounced, transferred or delivered, directly or
indirectly, within such jurisdictions except pursuant to an applicable
exemption from and in compliance with any applicable securities laws.
There will be no public offer in any of the Excluded Territories.
This Announcement is for information purposes only and does not
constitute or form part of any offer to issue or sell, or the
solicitation of an offer to acquire, purchase or subscribe for, any
securities in any jurisdiction and should not be relied upon in
connection with any decision to subscribe for or acquire any of the New
Ordinary Shares. In particular, this Announcement does not constitute
or form part of any offer to issue or sell, or the solicitation of an
offer to acquire, purchase or subscribe for, any securities in the
United States, Australia, Canada or Japan.
Barclays Capital, Goldman Sachs International, HSBC Bank plc, Merrill
Lynch International, RBS Hoare Govett and UBS Limited, which are
authorised and regulated in the UK by the Financial Services Authority,
are acting for Liberty International and no one else in connection with
the Capital Raising and will not regard any other person (whether or
not a recipient of this Announcement) as a client in relation to the
Capital Raising and will not be responsible to anyone other than
Liberty International for providing the protections afforded to their
respective clients or for providing advice in relation to the Capital
Raising or any matters referred to in this Announcement.
Apart from the responsibilities and liabilities, if any, which may be
imposed on Barclays Capital, Goldman Sachs International, HSBC Bank
plc, Merrill Lynch International, RBS Hoare Govett and UBS Limited by
the Financial Services and Markets Act 2000, none of Barclays Capital,
Goldman Sachs International, HSBC Bank plc, Merrill Lynch
International, RBS Hoare Govett or UBS Limited accepts any
responsibility whatsoever for the contents of this Announcement, and
makes no representation or warranty, express or implied, for the
contents of this Announcement, including its accuracy, completeness or
verification, or for any other statement made or purported to be made
by it, or on its behalf, in connection with Liberty International or
the New Ordinary Shares or the Capital Raising, and nothing in this
Announcement is or shall be relied upon as, a promise or representation
in this respect whether as to the past or future. Barclays Capital,
Goldman Sachs International, HSBC Bank plc, Merrill Lynch
International, RBS Hoare Govett and UBS Limited accordingly disclaim to
the fullest extent permitted by law all and any liability whether
arising in tort, contract or otherwise (save as referred to above)
which they might otherwise have in respect of this Announcement or any
such statement.
No statement in this Announcement is intended to be a profit forecast
and no statement in this Announcement should be interpreted to mean
that earnings per share of Liberty International for the current or
future financial years would necessarily match or exceed the historical
published earnings per share of Liberty International.
Certain statements made in this Announcement constitute forward-looking
statements. Forward looking statements are typically identified by the
use of forward looking terminology such as `believes`, `expects`,
`may`, `will`, `could`, `should`, `intends`, `estimates`, `plans`,
`assumes` or `anticipates` or the negative thereof or other variations
thereon or comparable terminology, or by discussions of, e.g. future
plans, present or future events, or strategy that involve risks and
uncertainties. Such forward-looking statements are subject to a number
of risks and uncertainties, many of which are beyond Liberty
International`s control and all of which are based on Liberty
International`s current beliefs and expectations about future events.
Such statements are based on current expectations and, by their nature,
are subject to a number of risks and uncertainties that could cause
actual results and performance to differ materially from any expected
future results or performance, expressed or implied, by the forward-
looking statement. No assurance can be given that such future results
will be achieved; actual events or results may differ materially as a
result of risks and uncertainties facing Liberty International and its
subsidiaries. Factors that might cause forward-looking statements to
differ materially from actual results include, among other things, the
following: global economic conditions; economic conditions in the UK
and other jurisdictions in which Liberty International operates or
invests; volatile property prices; any inability of Liberty
International to hedge certain risks economically; adequacy of reserve
estimates; Liberty International`s ability to continue to obtain
financing to meet liquidity needs; and exposure to various types of
market risk (e.g., interest rate risk, foreign exchange rate risk,
credit risk and commodity price risk). The forward-looking statements
contained in this Announcement speak only as of the date of this
Announcement and Liberty International undertakes no duty to, and will
not necessarily, update any of them in light of new information or
future events, except to the extent required by applicable law, the
Prospectus Rules, the Listing Rules and the Disclosure and Transparency
Rules.
APPENDIX: TERMS AND CONDITIONS
IMPORTANT INFORMATION ON THE PLACINGS FOR INVITED PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACINGS.
THIS ANNOUNCEMENT, THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT
HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT
PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING,
MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE
PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS AND ARE PERSONS WHO: (A) FALL WITHIN
ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL
PROMOTION) ORDER 2005, AS AMENDED ("THE ORDER") OR ARE PERSONS FALLING
WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; AND (B) ARE QUALIFIED
INVESTORS WITHIN THE MEANING OF SECTION 86(7) OF THE FINANCIAL SERVICES
AND MARKETS ACT 2000, AS AMENDED ("FSMA"); AND (C) HAVE BEEN INVITED TO
PARTICIPATE IN THE PLACINGS BY THE BANKS (ALL SUCH PERSONS TOGETHER
BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THIS APPENDIX AND THE TERMS AND CONDITIONS SET
OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT
RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT AND THIS
APPENDIX MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS
AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS
ANNOUNCEMENT AND THIS APPENDIX DO NOT THEMSELVES CONSTITUTE AN OFFER
FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THE
SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER THE
LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY
NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY,
WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM OR IN A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION OF THE UNITED STATES. NO MONEY, SECURITIES OR
OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING
SOLICITED BY THIS ANNOUNCEMENT AND THIS APPENDIX AND IF SENT IN
RESPONSE TO INFORMATION CONTAINED IN THIS ANNOUNCEMENT OR THIS
APPENDIX, WILL NOT BE ACCEPTED.
THIS ANNOUNCEMENT AND THIS APPENDIX IS ONLY ADDRESSED TO AND DIRECTED
AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE
"QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE
PROSPECTUS DIRECTIVE.
If a Placee indicates to the Banks that it wishes to participate in the
Placings by making an oral offer to acquire Placing Securities it will
be deemed to have read and understood this Appendix and the
announcement of which it forms part in their entirety (together with
the Appendix, hereinafter, this "Announcement") and to be making such
offer on the terms and conditions, and to be providing the
representations, warranties, indemnities, agreements and
acknowledgements, contained in this Announcement. In particular each
such Placee represents, warrants and acknowledges that it is a Relevant
Person and undertakes that it will acquire, hold, manage and dispose of
any of the Placing Securities that are allocated to it for the purposes
of its business only. Further, each such Placee represents, warrants
and agrees that (a) if it is a financial intermediary, as that term is
used in Article 3(2) of the Prospectus Directive, that the Firm Placed
Shares and Open Offer Placed Shares subscribed for and/or purchased by
it in the Capital Raising will not be acquired on a non-discretionary
basis on behalf of, nor will they be acquired with a view to their
offer or resale to, persons in circumstances which may give rise to an
offer of securities to the public other than an offer or resale in a
member state of the EEA which has implemented the Prospectus Directive
to Qualified Investors, or in circumstances in which the prior consent
of the Banks has been given to each such proposed offer or resale; and
(b) it is either (i) outside the United States and is subscribing for
the Firm Placed Shares and/or the Open Offer Placed Shares for its own
account or is purchasing the Firm Placed Shares and/or the Open Offer
Placed Shares for an account with respect to which it exercises sole
investment discretion and that it (and any such account) is outside the
United States; or (ii) a `qualified institutional buyer` ("QIB") (as
defined in Rule 144A under the Securities Act) or purchasing Placing
Securities on behalf of a QIB, and who will sign the US Form of
Acceptance. This Announcement does not constitute an offer to sell or
issue or the invitation or solicitation of an offer to buy or subscribe
for Placing Securities in any jurisdiction including, without
limitation, the United States, Australia, Canada or Japan. This
Announcement and the information contained herein are not for release,
publication or distribution, directly or indirectly, in whole or in
part, to persons in the United States, Australia, Canada or Japan or
any jurisdiction in which the same is unlawful.
In particular, the Placing Securities referred to in this Announcement
have not been and will not be registered under the Securities Act and
may not be offered, sold or transferred within the United States except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Subject to certain
limited exceptions. No public offering of the New Ordinary Shares will
be made in the United States. The Placing Securities have not been
approved or disapproved by the US Securities and Exchange Commission,
any state securities commission in the United States or any other
regulatory authority in the United States, nor have any of the
foregoing authorities passed upon or endorsed the merits of the
Placings or the accuracy or adequacy of this Announcement. Any
representation to the contrary is a criminal offence in the United
States.
The distribution of this Announcement and the offer and/or placing of
Placing Securities in certain other jurisdictions may be restricted by
law. No action has been taken by the Banks or the Company that would
permit an offer of the Placing Securities or possession or distribution
of this Announcement or any other offering or publicity material
relating to the Placing Securities in any jurisdiction where action for
that purpose is required. Persons into whose possession this
Announcement comes are required by the Banks and the Company to inform
themselves about and to observe any such restrictions.
Each Placee`s commitments will be made solely on the basis of the
information set out in the Placing Letter and the information publicly
announced to a Regulatory Information Service by or on behalf of the
Company on the date of this Announcement. Each Placee, by participating
in the Placings, agrees that it has neither received nor relied on any
other information, representation, warranty or statement made by or on
behalf of any of the Banks or the Company and none of the Banks, the
Company or any person acting on such person`s behalf nor any of their
affiliates has or shall have liability for any Placee`s decision to
accept this invitation to participate in the Placings based on any
other information, representation, warranty or statement. Each Placee
acknowledges and agrees that it has relied on its own investigation on
the business, financial or other position of the Company in accepting a
participation in the Placings. Nothing in this paragraph shall exclude
the liability of any person for fraudulent misrepresentation.
No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability will be
accepted by any of the Banks or any of their respective employees,
affiliates, advisers or agents or any other person as to or in relation
to, the accuracy or completeness of any of the Prospectus or this
Announcement or any other written or oral information made available to
or publicly available to any Placee, any person acting on such Placee`s
behalf or any of their respective advisers, and any liability therefore
is expressly disclaimed.
Proposed Firm Placing of New Ordinary Shares (the Firm Placed Shares)
and Placing of New Ordinary Shares subject to clawback in respect of
valid applications by Qualifying Shareholders (the Open Offer Placed
Shares) and subject to the Excess Application Facility
Placees are referred to this Announcement and the Prospectus, which the
Company intends to publish once finalised, containing details of, inter
alia, the Capital Raising and the Draft Circular. This Announcement
and the Prospectus, have been prepared and issued, or will be issued,
by the Company, and each of these documents is and will be the sole
responsibility of the Company.
Subject to, amongst other conditions contained in the Placing
Agreement, the Banks and the Company executing a Pricing Supplement
following the institutional Bookbuilding in connection with the
Placings, Qualifying Shareholders on the UK Register at close of
business on 28 April 2009 and the SA Register at close of business on 7
May 2009 (or, in each case, such later date as may be agreed between
the Company and Merrill Lynch International and UBS Limited (the
"Placing Agents") will be offered the right to subscribe at the Issue
Price, payable in full on acceptance, for their pro rata entitlement of
the Open Offer Shares. Qualifying Shareholders will also be offered
the right to subscribe for additional New Ordinary Shares equal to
their pro rata entitlement to the Open Offer Shares in the Excess
Application Facility. Entitlements to fractions of Open Offer Shares
will not be allotted and each Qualifying Shareholder`s entitlement will
be rounded down to the nearest whole number. The fractional
entitlements will be aggregated and sold to the Placees in the Placing
for the ultimate benefit of the Company. It is not expected that the
final Prospectus will be published prior to any Placees entering into a
legally binding commitment in respect of the Placings.
Application for listing and admission to trading
Application will be made to (i) the UKLA for the New Ordinary Shares to
be admitted to the Official List and (ii) the London Stock Exchange plc
for the New Ordinary Shares to be admitted to trading on its main
market for listed securities. Subject to all conditions being
fulfilled, the Johannesburg Stock Exchange has approved the listing of
the New Ordinary Shares on the main board of the Johannesburg Stock
Exchange. Application will also be made to Euroclear UK & Ireland
Limited for the entitlements to the Open Offer Shares ("Open Offer
Entitlements") and the entitlements to the Open Offer Shares pursuant
to the Excess Application Facility (the "Excess CREST Open Offer
Entitlements") to be admitted as separate participating securities
within CREST (together with the admission of the New Ordinary Shares as
described above, "Admission").
Subject to satisfaction of the conditions referred to herein and to be
set out in the Prospectus, it is expected that the Application Form
will be despatched on 29 April 2009 and the SA Application Form will be
dispatched on 2 May 2009 in the case of Qualifying South African
Shareholders who hold their shares in certificated form and 9 May 2009
in the case of Qualifying South African Shareholders who hold their
shares in dematerialised form with own name registration. These
application forms will be sent to Shareholders who hold their Ordinary
Shares in certificated form (other than, subject to certain exceptions,
shareholders in the United States and certain other countries outside
the United Kingdom, together "Overseas Shareholders") and to
Qualifying South African Shareholders who hold their Ordinary Shares in
uncertificated form or in dematerialised form with own name
registration. It is expected that Open Offer Entitlements and Excess
CREST Open Offer Entitlements will be credited to stock accounts in
CREST around 8.00 a.m. on 30 April 2009 to Qualifying Shareholders who
hold their Ordinary Shares in uncertificated form (other than, subject
to certain exceptions, Overseas Shareholders) and dealings in the New
Ordinary Shares will commence at 8.00 a.m. on the day which is three
Business Days following the Extraordinary General Meeting. The latest
time and date for acceptance and payment in full in respect of the New
Ordinary Shares is expected to be 11.00 a.m. on 21 May 2009. The
Company and the Banks have agreed that if a Supplementary Prospectus is
issued by the Company two Business Days or fewer prior to the date
specified in the expected timetable for the Capital Raising as the
latest date for acceptance and payment in full, such date shall be
extended to the date which is three Business Days after the date of
issue of the Supplementary Prospectus.
The New Ordinary Shares will be issued subject to the memorandum and
articles of association of the Company and will, when issued and fully
paid, rank pari passu in all respects with the existing issued Ordinary
Shares, including the right to receive all dividends or other
distributions made or declared in respect of such Ordinary Shares after
the date of their issue.
Bookbuilding
Commencing today, the Placing Agents will be conducting the
Bookbuilding to determine demand for participation in the Placings. The
Placing Agents will seek to procure Placees as part of this
Bookbuilding. This Announcement gives details of the terms and
conditions of, and the mechanics of participation in, the Bookbuilding
and Placings. A commission of 1.75% of the value of the Open Offer
Placed Shares subscribed for by each Placee will be paid to such Placee
on the date of Admission subject to payment in full by such Placee for
the New Ordinary Shares allocated to such Placee in accordance with
this Announcement and such Placee`s Placing Letter (as defined below).
Principal terms of the Bookbuilding
(a) By participating in the Bookbuilding and the Placings, Placees
will be deemed to have read and understood this Announcement in its
entirety and to be participating and making an offer for any Placing
Securities on the terms and conditions, and to be providing the
representations, warranties, indemnities, acknowledgements and
undertakings, contained in this Announcement and pursuant to a placing
letter which will be provided to each Placee by the Placing Agents
which the Placee is obliged to complete and sign (the "Placing
Letter").
(b) The Placing Agents are arranging the Placings as agents of the
Company.
(c) Participation in the Placing will only be available to persons who
may lawfully be and are invited to participate by the Placing Agents.
The Banks and their respective affiliates are entitled to enter bids as
principal in the Bookbuilding.
(d) Any bid should state the number of Firm Placed Shares and Open
Offer Placed Shares for which the person wishes to subscribe or the
total monetary amount which it is offering to subscribe for Firm Placed
Shares and Open Offer Placed Shares at the Issue Price) which is
ultimately established by the Company and the Placing Agents, or at a
price up to a price limit specified in its bid. The number of Firm
Placed Shares and Open Offer Placed Shares bid for by a Placee must be
the same.
(e) The Placing Agents reserve the right not to accept bids or to
accept bids in part rather than in whole. The acceptance of bids shall
be at the Banks` absolute discretion.
(f) The Bookbuilding will establish a single price for the Firm Placed
Shares, the Open Offer Placed Shares and the Open Offer Shares. The
Issue Price will be jointly agreed between the Banks and the Company
following completion of the Bookbuilding and will be payable to the
Placing Agents by the Placees in respect of the Placing Securities
allocated to them. Any discount to the market price of the Ordinary
Shares will be determined in accordance with the Listing Rules as
published by the Financial Services Authority pursuant to Part IV of
FSMA, and approved by the Company at the EGM.
(g) The Bookbuilding is expected to close no later than 4.30 p.m. on
28 April 2009. The timing of the closing of the books, pricing and
allocations is at the discretion of the Banks and the Company. The
Placing Agents and the Company may, at their sole discretion accept
bids that are received after the Bookbuilding has closed.
(h) If successful, each Placee`s allocation will be confirmed to it by
the Placing Agents following the close of the Bookbuilding, and a
Placing Letter will be dispatched as soon as possible thereafter. Oral
or written confirmation (at the Placing Agents` discretion) from the
Placing Agents to such Placee, following completion of the
Bookbuilding, will constitute a legally binding commitment upon such
Placee, in favour of the Placing Agents and the Company to subscribe
for the number of Placing Securities allocated to it on the terms and
conditions set out in this Announcement, the Placing Letter and in
accordance with the Company`s Memorandum and Articles of Association.
Each Placee will confirm such legally binding commitment by completing,
signing and returning a Placing Letter in accordance with the
instructions therein, and should a Placee fail to do so the Placing
Agents will retain the right to cancel their allocation or terminate
such legally binding commitment. Each Placee will have an immediate,
separate, irrevocable and binding obligation, owed to the Placing
Agents to pay to the Banks (or as the Placing Agents may direct) in
cleared funds an amount equal to the product of the Issue Price and the
sum of the number of Firm Placed Shares and once apportioned (in
accordance with the procedure described in the paragraph entitled
"Placing Procedure" below), the Open Offer Placed Shares, which such
Placee has agreed to acquire.
(i) The Company will make a further announcement following the close
of the Bookbuilding detailing the Issue Price and the number of New
Ordinary Shares to be issued (the "Pricing Announcement"). It is
expected that such Announcement will be made as soon as practicable
after the close of the Bookbuilding.
(j) A bid in the Bookbuilding will be made on the terms and conditions
in this Announcement and will be legally binding on the Placee by
which, or on behalf of which, it is made and will not be capable of
variation or revocation after the close of the Bookbuilding.
(k) Subject to paragraphs (g) and (i) above, the Placing Agents may
choose to accept bids, either in whole or in part, on the basis of
allocations determined at its discretion (in agreement with the
Company) and may scale down any bids for this purpose on such basis as
they may determine.
(l) Irrespective of the time at which a Placee`s allocation(s)
pursuant to the Placings is/are confirmed, settlement for all Placing
Securities to be acquired pursuant to the Placings will be required to
be made at the same time, on the basis explained below under the
paragraph "Registration and Settlement".
All obligations under the Placings will be subject to the fulfilment of
the conditions referred to below under the paragraph "Conditions of the
Placings and Termination of the Placing Agreement".
Conditions of the Placings and Termination of the Placing Agreement
Placees will only be called on to subscribe for Placing Securities if
the obligations of the Banks under the Placing Agreement have become
unconditional in all respects and the Banks have not terminated the
Placing Agreement prior to Admission.
The Banks` obligations under the Placing Agreement are conditional
upon, inter alia:
(a) Execution of the Pricing Supplement;
(b) the Company having complied with all its obligations under the
Placing Agreement or under the terms or conditions of the Capital
Raising which fall to be performed or satisfied on or prior to
Admission, save to the extent that any non-compliance is not material
in the context of the Capital Raising;
(c) the warranties, representations, undertakings and covenants on the
part of the Company, contained or referred to in the Placing Agreement
being true, accurate and not misleading on and as of the date of the
Placing Agreement, the date of publication of the Prospectus, the date
of publication of any supplementary prospectus, the date of the closing
of the Open Offer and the Closing Date, in each case, by reference to
the facts and circumstances then existing;
(d) Admission having occurred by not later than 8.00 a.m. on the third
Business Day after the date of the EGM or such later time and/or date
as the Company and the Placing Agents may agree;
(e) the Resolution having been passed without material amendment or
such amendment as the Company and the Placing Agents may agree on the
date of the EGM (or such later time as the Company and the Placing
Agents may agree);
