| Tue 28 Jul 2009, 10:18 | | AQP - Aquarius Platinum Limited - Notice of General Meeting and Explanatory |
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AQP
AQP
AQP - Aquarius Platinum Limited - Notice of General Meeting and Explanatory
Memorandum
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM
Date of Meeting: 21 August 2009
Time of Meeting: 9.00 am
Place of Meeting: Clarendon House
2 Church Street
Hamilton HM11
Bermuda
This Notice of General Meeting and Explanatory Memorandum should be read in
their entirety. If Shareholders are in doubt as to how they should vote,
they should seek advice from their accountant, solicitor or other
professional adviser prior to voting.
AQUARIUS PLATINUM LIMITED
Exempted Company Number EC26290
ARBN 087 577 893
NOTICE OF GENERAL MEETING
Notice is hereby given that a general meeting of Shareholders of Aquarius
Platinum Limited (Company) will be held at Clarendon House, 2 Church
Street, Hamilton HM11, Bermuda at 9.00 am on Friday, 21 August 2009.
The Explanatory Memorandum which accompanies and forms part of this Notice
of General Meeting describes the various matters to be considered and
contains a glossary of defined terms for terms that are not defined in full
in this Notice of General Meeting.
AGENDA
1. Resolution 1 - Ratify the issue of Shares under the Placing
To consider, and if thought fit, to pass, with or without amendment,
the following resolution:
"That, for the purposes of ASX Listing Rule 7.4 and for all other
purposes, the Shareholders of the Company approve and ratify the issue
of 46,330,000 Shares, on the terms and conditions set out in the
Explanatory Memorandum"
The Company will disregard any votes cast on this resolution by any
person who participated in the issue, and any associate of that
person. However, the Company need not disregard a vote if it is cast
by a person as proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form, or it is cast by the
person chairing the meeting as proxy for a person who is entitled to
vote, in accordance with a direction on the proxy form to vote as the
proxy decides.
2. Resolution 2 - Ratify the issue of Convertible Bonds and approve the
issue of Shares on conversion of the Convertible Bonds
To consider, and if thought fit, to pass, with or without amendment,
the following resolution:
"That, for the purposes of ASX Listing Rule 7.4 and for all other
purposes, the Shareholders of the Company approve the issue of up to
65,000 Convertible Bonds, each at an issue price of ZAR 10,000, and
approve the issue of Shares on conversion of the Convertible Bonds, on
the terms and conditions set out in the Explanatory Memorandum"
The Company will disregard any votes cast on this resolution by any
person who participated in the issue, and any associate of that
person. However, the Company need not disregard a vote if it is cast
by a person as proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form, or it is cast by the
person chairing the meeting as proxy for a person who is entitled to
vote, in accordance with a direction on the proxy form to vote as the
proxy decides.
3. Resolution 3 - Approve the issue of Shares in connection with the
FirstPlats Agreement
To consider and, if thought fit, to pass, with or without amendment,
the following resolution:
"That, for the purposes of ASX Listing Rule 7.1 and for all other
purposes, the Shareholders of the Company approve the issue of
2,732,000 Shares in accordance with the FirstPlats Agreement, on the
terms and conditions as set out in the Explanatory Memorandum"
The Company will disregard any votes cast on this resolution by any
person who may participate in the issue and by any person who might
obtain a benefit, except a benefit solely in the capacity of a holder
of ordinary shares if this resolution is passed, or by an associate of
such persons. However, a person can vote if the vote is cast as proxy
for a person who is entitled to vote, in accordance with the
directions on the proxy form, or it is cast by the person chairing the
meeting as proxy for a person who is entitled to vote, in accordance
with a direction on the proxy form to vote as the proxy decides.
BY ORDER OF THE BOARD
Willi Boehm
Company Secretary
DATED: 28 July 2009
Explanatory Memorandum
This Explanatory Memorandum has been prepared for the information of
members in Aquarius in connection with the business to be conducted at a
general meeting of the members of the Company to be held at Clarendon
House, 2 Church Street, Hamilton HM11, Bermuda at 9.00 am on Friday, 21
August 2009 (the Meeting).
This Explanatory Memorandum should be read in conjunction with, and forms
part of, the accompanying Notice of General Meeting. A glossary of terms is
included at the end of this Explanatory Memorandum.
Full details of the resolutions to be considered at the Meeting are set out
below.
1. Background
1.1 Summary of the Capital Raising
On 26 March 2009 the Company announced a placing, rights issue
and convertible bond issue (Capital Raising). In total, the
Company raised approximately US$269 million through the Capital
Raising.
(a) Key terms of the Placing
The Company raised approximately US$119 million under the
Placing. The placing of 46,330,000 Shares (the Placing Shares)
represented approximately 14.2% of the existing issued common
share capital of the Company at the time of issue of the Placing
Shares, and was offered to both new and existing institutional
investors.
The Placing was conducted through an accelerated book-building
process and was underwritten as to settlement by Merrill Lynch
International and Euroz Securities Limited (Euroz), pursuant to
the Placing and Rights Issue Underwriting Agreement. The Placing
Shares were issued on 31 March 2009.
(b) Key terms of the Rights Issue
The Company raised approximately US$72 million pursuant to the
renounceable Rights Issue. The new Shares offered under the
Rights Issue (Rights Issue Shares) were offered to all
Shareholders holding Shares on the Record Date, other than
(subject to certain exceptions) Shareholders with a registered
address in an Excluded Territory.
The Rights Issue Shares were offered at a price of A$2.39, 115
pence or ZAR15.83 per Share on the basis of 1 Rights Issue Share
for every 9 Existing Shares. The Rights Issue was fully
underwritten by Merrill Lynch International and Euroz, pursuant
to the Placing and Rights Issue Underwriting Agreement. Aquarius
received valid acceptances in respect of 40,313,278 Rights Issue
Shares, representing approximately 97.16% of the total number of
Rights Issue Shares offered to qualifying Shareholders under the
Rights Issue.
(C) Key terms of the Convertible Bond Issue
The Company raised a further ZAR650 million (US$78 million) by
way of the Convertible Bond Issue. The Convertible Bond Issue
was conducted through a private placement managed by Rand
Merchant Bank (RMB). The minimum denomination of the Convertible
Bonds was ZAR10,000.
RMB agreed to underwrite ZAR500 million of the Convertible Bond
Issue, and the Company granted RMB an option to require the
Company to issue additional Convertible Bonds up to a further
value of ZAR150 million. RMB exercised the option and a total
amount of ZAR650 million was raised under the Convertible Bond
Issue.
The Company issued the Convertible Bonds on 11 May 2009 and the
bonds were listed on the JSE on 11 May 2009. The obligation to
issue Shares on conversion of the Convertible Bonds is
conditional on Shareholder approval being obtained, or the
Company otherwise being able to issue Shares in compliance with
Listing Rule 7.1. If Shareholder approval is not obtained for
the purposes of Resolution 2, the Company will ensure that at all
times it has sufficient authorised but unissued share capital and
sufficient capacity for the purposes of compliance with Listing
Rule 7.1 to issue all Shares that may be required to be issued on
conversion of the Convertible Bonds. The Company will not issue
any other Shares to the extent that such a Share issue would
restrict or otherwise interfere with its ability to issue the
Shares on conversion of the Convertible Bonds in compliance with
Listing Rule 7.1.
1.2 Reasons for the Placing, Rights Issue and Convertible Bond Issue
During 2008, the Aquarius Group simplified its group structure by
removing all minority shareholdings in its subsidiary, AQPSA,
through various actions, including the repurchase by Aquarius of
Impala Platinum`s 20% interest in AQPSA for US$790 million in
April 2008. This repurchase was partly financed through a
bridging loan (Bridge Loan Facility). The Bridge Loan Facility
was due for repayment on 30 June 2009 and has now been repaid.
Approximately US$167 million (ZAR1,577.5 million) of the proceeds
of the Placing, Rights Issue and Convertible Bond Issue were
applied in repaying the balance owing on the Bridge Loan
Facility.
On 8 December 2008, Aquarius` management announced the temporary
suspension of operations at the Everest mine owing to
geotechnical issues, namely instability as a result of subsidence
occurring over an upper area of the mine. However, Aquarius`
management believes that the subsidence event does not jeopardise
the sustainability of the Everest mine on a long term basis and
that technically acceptable alternatives exist to re-open the
mine. The capital expenditure associated with the potential
restart of the Everest mine is currently estimated to be ZAR 200
million to ZAR 250 million.
As announced on 27 March 2009, Aquarius signed an implementation
agreement with Ridge Mining PLC (Ridge) pursuant to which,
subject to certain preconditions, Aquarius agreed to make an
offer for the entire issued and to be issued share capital of
Ridge at an exchange ratio of 1 Share for every 2.75 Ridge shares
(Possible Acquisition). Ridge has issued a scheme booklet and
convened a meeting of Ridge shareholders to consider the Possible
Acquisition, which was held on 6 July 2009. Court approval for
the Possible Acquisition is being sought on 27 July 2009. Should
the Possible Acquisition complete, part of the proceeds of the
Placing and Rights Issue will be used to fund the operating and
capital expenditure requirements of Ridge.
1.3 Use of proceeds
Of the US$269 million that the Company raised pursuant to the
Capital Raising, approximately US$167 million was applied to
repaying the Bridge Loan Facility, approximately US$31 million
was and will be applied to capital requirements to open the
Everest mine and approximately US$39 million will be applied to
capital and operating expenses for Ridge.
2. Resolution 1 - Ratify the issue of Shares in connection with the
Placing
2.1 Background
Section 1 of this Explanatory Memorandum includes details of the
Placing which formed part of the Capital Raising that was
conducted by Aquarius.
Resolution 1 seeks the approval of Shareholders to ratify the
issue of 46,330,000 Shares to raise US$119 million for the
purposes of Listing Rule 7.4.
2.2 Listing Rule 7.1 and 7.4
Listing Rule 7.1 broadly provides, subject to certain exceptions,
that a company may not issue or agree to issue securities which
represent more that 15% of the nominal value of the company`s
issued share capital at the beginning of any 12 month period
without obtaining shareholder approval.
A company in general meeting can ratify, by passage of a
resolution, a previous issue of securities that was within the
15% limit so that the previous issue can be treated as having
been made with shareholder approval for the purposes of Listing
Rule 7.1.
Listing Rule 7.4 allows shareholders to validate an issue of
securities made without prior approval under Listing Rule 7.1 as
if it had been made with that approval for the purposes of
Listing Rule 7.1, but only if:
(a) the issue did not breach the 15% limit under Listing Rule 7.1
when made; and
(b) the holders of ordinary securities subsequently approve it.
2.3 Disclosure requirements
In accordance with the disclosure requirements of ASX Listing
Rule 7.5, the following information is provided to Shareholders
to enable them to consider and ratify the issue of the Placing
Shares.
(a) The number of Placing Shares allotted was 46,330,000.
(b) The Placing Shares were issued at 180 pence per Placing Share.
The price of the Placing Shares in Australian dollars, the
currency in which the Shares are quoted on ASX, was set at A$3.75
per Placing Share.
(c) The Placing Shares were allotted to professional and
sophisticated investors, who were not related to the Company.
(d) The Placing Shares are fully paid common shares in the Company
and rank equally with, and are on the same terms as, the existing
Shares on issue.
Funds raised from the issue of the Placing Shares (together with
funds raised from the Rights Issue and Convertible Bond Issue)
have been used for the repayment of the Bridge Loan Facility,
have and will be used for capital expenditure on the Everest mine
and capital and operating requirements in relation to the
Possible Acquisition and for working capital and ongoing
operations.
3 Resolution 2 - Ratify the issue of Convertible Bonds in connection
with the Convertible Bond Issue and approve the issue of Shares on
conversion of the Convertible Bonds
3.1 Background
Section 1 of the Explanatory Memorandum includes details of the
Convertible Bond Issue which formed part of the Capital Raising
that was conducted by Aquarius.
Resolution 2 is seeking Shareholder ratification for the issue of
Convertible Bonds and Shares on conversion of the Convertible
Bonds, for the purposes of Listing Rule 7.4.
3.2 Listing Rule 7.1 and 7.4
As set out above, Listing Rule 7.1 broadly provides, subject to
certain exceptions, that a company may not issue or agree to
issue securities which represent more that 15% of the nominal
value of the company`s issued share capital at the beginning of
any 12 month period without obtaining shareholder approval.
Pursuant to Listing Rule 7.4 a company in general meeting can
ratify a previous issue of securities that was within the 15%
limit so that the previous issue can be treated as having been
made with shareholder approval for the purposes of Listing Rule
7.1.
3.3 Disclosure requirements
In accordance with the disclosure requirements of ASX Listing
Rule 7.5, the following information is provided to Shareholders
to enable them to consider and ratify the issue of the
Convertible Bonds.
(a) The number of Convertible Bonds issued was 65,000. The
maximum number of Shares that may be issued on conversion of
the Convertible Bonds will be determined by dividing the
principal amount of each Convertible Bond by the Conversion
Price in effect on the relevant Conversion Date. The Base
Conversion Price is ZAR 38.13 per Share. The Base
Conversion Price is subject to adjustment in accordance with
certain adjustment formulae which are summarised in the
Schedule under the heading "Conversion Price".
The total number of Shares to be issued on conversion of all
of the Convertible Bonds, assuming the Convertible Bonds are
all converted at the Base Conversion Price, would be
17,046,944 Shares (being ZAR650,000,000 divided by ZAR
38.13).
The total number of Shares to be issued on conversion of all
of the Convertible Bonds at the Base Conversion Price would
represent 4.11% of the total issued and fully paid share
capital of the Company, based on the total issued and fully
paid share capital of the Company immediately following
completion of the Rights Issue, taking account of the Shares
to be issued on Conversion of the Convertible Bonds
(17,046,944) and assuming the Company does not undertake any
other issue of Shares.
If shareholder approval is not obtained for Resolution 2 the
Company will need to ensure during each year of the term of
the Convertible Bonds that it has sufficient capacity
available under the 15% permitted under Listing Rule 7.1, to
issue all of the Shares required on conversion of the
Convertible Bonds without shareholder approval. This would
have the effect of restricting the Company`s flexibility in
managing future share issues and raising equity capital.
The Convertible Bonds may be converted at any time after the
first anniversary of the Issue Date up to 10 days prior to
the final maturity date on 30 April 2012. The actual
percentage of the total issued share capital of the Company
to be represented by the Shares to be issued on conversion
of the Convertible Bonds will depend on what other share
issues are undertaken by the Company prior to conversion of
the Convertible Bonds and any adjustments made to the
Conversion Price in accordance with the terms of the
Convertible Bonds.
As noted above, the Conversion Price is subject to
adjustment upon the occurrence of certain events.
Generally, these adjustment mechanisms are intended to
protect the bondholder from the dilutionary effect of the
events triggering the adjustment, such as new issues of
Shares at a discount, share consolidations and the like.
One exception to this principle is the adjustment to the
Conversion Price following a change of control event. These
adjustment mechanisms are summarised in the Schedule under
the heading "Conversion Price".
(b) The Convertible Bonds were issued at ZAR10,000 per
Convertible Bond.
(c) The Convertible Bonds were issued on the terms and
conditions set out in the Schedule. The Shares to be issued
on conversion of the Convertible Bonds rank equally with all
existing Shares on issue.
(d) The Convertible Bonds were issued to RMB and to clients of
RMB.
(e) The issue of the maximum number of Convertible Bonds
proposed under Resolution 2 raised ZAR650 million
(approximately US$78 million). Funds raised from the issue
of the Convertible Bonds have been used to repay in part the
Bridge Loan Facility.
4. Resolution 3 - Approve the issue of Shares in connection with the
FirstPlats Agreement
4.1 Background
In February 2009, Aquarius, AQPSA and First Platinum (Pty)
Limited (FirstPlats) entered into the FirstPlats Agreement
pursuant to which AQPSA will acquire from FirstPlats a
prospecting and mining business for PGMs in the Salene Mining
Area and FirstPlats Mining Area. The consideration for the
acquisition was determined by reference to the aggregate cash
value of 2,732,000 Shares. The sale of the business is subject
to the transfer of ownership of the relevant mining rights to
AQPSA which as per the terms of the agreement, must take place
within 18 months from 5 February 2009. If, however, AQPSA elects
to mine in those mining areas prior to the conversion and
transfer of the mining rights under a contract mining arrangement
concluded with FirstPlats, the shares will be issued in tranches
at six monthly intervals in proportions which equate to the
extent to which AQPSA has depleted the ore reserve in the mining
areas in each such six monthly period pursuant to such contract
mining activities.
Resolution 3 seeks the approval of Shareholders to authorise the
issue of 2,732,000 Shares, in connection with the FirstPlats
Agreement, for the purposes of Listing Rule 7.1.
4.2 ASX Listing Rule 7.1
Listing Rule 7.1 broadly provides, subject to certain exceptions,
that a company may not issue or agree to issue securities which
represent more that 15% of the nominal value of the company`s
issued share capital at the beginning of any 12 month period
without obtaining shareholder approval.
Accordingly, if Shareholders approve the issue of Shares under
Resolution 3, those Shares will not be counted towards the 15%
limit in respect of issues of equity securities in the following
12 month period.
4.3 Disclosure Requirements
In accordance with the disclosure requirements of ASX Listing
Rule 7.3, the following information is provided to Shareholders
to enable them to approve the issue of the Shares:
(a) The maximum number of Shares to be issued pursuant to
Resolution 3 is 2,732,000.
(b) The issue of Shares will occur no later than 15 months after
the date of this meeting, in accordance with a waiver
granted by ASX.
(c) The deemed issue price of each Share is 92 pence.
(d) The Shares will be issued to Sunpeak Global Corporation, on
the direction of FirstPlats, in accordance with the terms
and conditions of the FirstPlats Agreement.
(e) The Shares to be issued by the Company are fully paid common
shares in the Company and rank equally with, and are on the
same terms as, the existing Shares on issue.
(f) No funds are being raised pursuant to the issue of Shares in
accordance with Resolution 3. The Shares are being used as
consideration for the acquisition of a prospecting and
mining business for PGMs in the Salene Mining Area and
FirstPlats Mining Area from FirstPlats under the FirstPlats
Agreement.
(g) The Board presently intends to issue the Shares pursuant to
Resolution 3 as one allotment. However, the Board reserves
the right to issue the Shares progressively.
5. Glossary of Terms
In the Notice of General Meeting and this Explanatory Memorandum the
following words and expressions have the following meanings:
AQPSA means Aquarius Platinum (South Africa) (Pty) Ltd, a wholly owned
subsidiary of Aquarius incorporated in the Republic of South Africa.
Aquarius Group means Aquarius and each of its subsidiaries and
subsidiary undertakings from time to time.
ASX means ASX Limited.
ASX Listing Rules means the official listing rules of ASX.
Base Conversion Price means ZAR38.13
Board means the board of Directors.
Bridge Loan Facility means the bridge facility provided for in the
Amended and Restated Facilities Agreement dated on or about 15 April
2008 between AQPSA and FirstRand Bank Limited.
Companies Act means the Companies Act 1981 of Bermuda as amended from
time to time.
Company and Aquarius means Aquarius Platinum Limited.
Conversion Price means the Base Conversion Price as adjusted from time
to time. The number of Shares to be issued and transferred and
delivered on exercise of a conversion right under the Convertible Bond
shall be determined by dividing the principle amount of the relevant
Convertible Bond by the conversion price in effect on the conversion
date. The initial conversion price is the Base Conversion Price. The
conversion price shall be adjusted upon the occurrence of certain
events including, but not limited to, any alteration to the nominal
value of the Shares as the result of consolidation or subdivision, any
rights or bonus issues and any distribution of capital, including
special dividends. Shares to be allotted or transferred, as the case
may be, on conversion will be issued or transferred and delivered, as
the case may be, credited as fully paid and will rank equally with all
other Shares, save that they will not rank for any dividend or other
distribution declared or paid or made by reference to a record date
for the payment of a dividend or other distribution with respect to
the Shares prior to the relevant date of conversion.
Convertible Bond Issue means the issue of convertible bonds which
raised ZAR650 million.
Convertible Bonds means the convertible bonds issued in accordance
with the Convertible Bond Issue and the terms of which are summarised
in the Schedule to this Explanatory Memorandum.
Directors means the directors of the Company from time to time.
Excluded Territory means the United States, Canada and Japan.
Existing Shares means Shares on issue on the Record Date.
Explanatory Memorandum means this explanatory memorandum.
FirstPlats means First Platinum (Pty) Ltd, a company incorporated in
the Republic of South Africa.
FirstPlats Mining Area means the geographical area comprising of
mining authorisation in the form of mining licences to mine for PGMs.
JSE means the JSE Limited, a public company incorporated with limited
liability under the laws of the Republic of South Africa, with
registration number 2005/022939/06 and licensed as an exchange under
the South African Securities Services Act, No. 36 of 2004 as amended,
often referred to as the Johannesburg Stock Exchange.
LSE means the London Stock Exchange plc.
Impala Platinum means Impala Platinum Holdings Limited registration
number 1597/001979106, a company incorporated in the Republic of South
Africa.
Meeting and General Meeting means the general meeting of Shareholders
to be held at 2 Clarendon House, 2 Church Street, Hamilton HM11,
Bermuda at 9.00 am on Friday, 21 August 2009 or any adjournment
thereof.
Notice and Notice of General Meeting means the notice of general
meeting which accompanies this Explanatory Memorandum.
PGM means platinum group metals.
Placee means persons who subscribed for Placing Shares pursuant to the
Placing.
Placing means the placing of Placing Shares as described in the
Explanatory Memorandum.
Placing and Rights Issue Underwriting Agreement means the placing and
rights issue underwriting agreement dated 26 March 2009 between the
Company, Merrill Lynch International and Euroz relating to the Placing
and Rights Issue.
Placing Shares means the Shares issued to Placees pursuant to the
Placing as defined in section 1.1(a) of the Explanatory Memorandum.
Record Date means the record date in Australia, the UK and South
Africa, being the close of business on 9 April 2009, 31 March 2009 and
9 April 2009 respectively.
Resolution means a resolution in the Notice of General Meeting.
Rights Issue means the offer by the Company of Shares by way of rights
to all Shareholders, other than (subject to certain exceptions),
Shareholders with a registered address in an Excluded Territory.
Salene Mining Area the geographical area comprising of mining
authorisation in the form of mining licences to mine for PGMs.
Securities means any securities including, without limitation, Shares,
or options, warrants or other rights to subscribe for or purchase or
acquire Shares.
Shareholder means a registered holder of Shares.
Share means a fully paid common share of US$0.05 in the capital of the
Company.
ZAR means South African Rand, the official currency of South Africa.
Schedule - Terms and Conditions of the Convertible Bonds
Issuer Aquarius Platinum Limited, an exempted
company
duly incorporated in Bermuda under the
Companies
Act 1981 of Bermuda with Exempted Company
Number
EC 26290 on 8 April 1999 and registered as an
external company in accordance with the
company
laws of South Africa with Registration Number
2009/005763/10.
Guarantor Aquarius Platinum (South Africa)
(Proprietary)
Limited, a private company duly incorporated
in
accordance with the company laws of South
Africa
with Registration Number 2002/000341/07.
Security SPV Lexshell 548 Investments (Proprietary)
Limited, a private company duly incorporated
in accordance with the company laws of South
Africa with Registration Number
2002/006432/07.
Description of Bonds Floating Rate Senior Secured Convertible
Registered Bonds due 30 April 2012.
Issue Price The Convertible Bonds have been issued at
100%
(one hundred percent) of their Principal
Amount.
Authorised Denomination ZAR10,000. Convertible Bonds were only
purchased or transferred in integral
multiples of ZAR10,000.
Issue Date 11 May 2009 (Issue Date).
Final Maturity Date Unless previously converted, redeemed or
repurchased and cancelled, and other than in
the case of an Event of Default, the
Convertible Bonds will be redeemed on 30
April 2012 (Final Maturity Date) at their
Principal Amount together with accrued and
unpaid interest.
Redemption by Issuer During the period from the Issue Date and up
to
the day prior to the first anniversary of the
Issue Date, the Issuer may redeem all but not
some of the Bonds then outstanding at 115% of
their Principal Amount together with accrued
interest up to but excluding the date on
which such redemption occurs.
The Issuer may redeem all but not some of the
Bonds on the date specified in the relevant
notice of redemption at their Principal
Amount together with accrued interest up to
but excluding such date -
(a) at any time on or after the first anniversary
of the Issue Date, if on more than 20
consecutive dealing days the ZAR Volume
Weighted Average Price for each such Dealing
Day exceeds 128% of the Conversion Price in
effect on such Dealing Day; or
(b) at any time, if prior to the date on which
the relevant notice of redemption is given
Conversion Rights shall have been exercised
and/or purchases effected in respect of 85%
or more in Principal Amount of the Bonds
originally issued.
The Issuer also has the right to redeem all
but not some of the Bonds in the event of
certain changes affecting taxation in respect
of payments of the Bonds.
Redemption at option Following the occurrence of change of control event
of Bond holder the holder of each Bond will have the right to
require the Issuer to redeem, in cash, that Bond at
-
(a) if the change of control occurs prior to the
first anniversary of the Issue Date, 115% of its
Principal Amount; and
(b) if the change of control occurs on or after the
first anniversary of the Issue Date, its Principal
Amount together with accrued but unpaid interest.
Interest The Convertible Bonds bear interest from (and
including) the Issue Date at the rate which is the
aggregate for each Interest Period of 3-month JIBAR
plus a margin of 3% (three percent) per annum.
Interest on the Convertible Bonds will be
compounded quarterly in arrear and be paid semi-
annually in arrear on 30 October and 30 April in
each year commencing on 30 October 2009.
Conversion Right The holder of each Convertible Bond shall have the
right to convert such Convertible Bond into new
and/or existing (as determined by the Issuer)
Shares of US$0.05 each in the capital of the
Issuer, credited as fully paid up.
A Bondholder may exercise its Conversion Right only
in respect of the Principal Amount of a Convertible
Bond that has not already been redeemed or
repurchased and cancelled and by delivering a
Conversion Notice to the Conversion Agent together
with payment of all applicable taxes. Only one
Conversion Notice may be delivered by a Bondholder
during each calendar month during the Conversion
Period. The Conversion Date will be the
Johannesburg Business Day after the date of such
delivery and payment.
Conversion Period The Conversion Right in respect of any Convertible
Bond shall be exercisable at any time from the
first anniversary of the Issue Date and, except
following an Event of Default or unless previously
redeemed, converted or purchased and cancelled, up
to close of business on the 10th (tenth) day prior
to the Final Maturity Date. The Conversion Right
in respect of any Convertible Bond may not be
exercised where the resulting Conversion Date would
fall during a closed period for Common Shares or
during the period commencing on a day which is 10
(ten) days prior to an Interest Payment Date, and
ending on the Interest Payment Date, both days
inclusive.
Base Conversion Price The Base Conversion Price is ZAR38.13 (Base
Conversion Price).
Conversion Price The number of Common Shares to be issued or
transferred and delivered on exercise of a
Conversion Right shall be determined by dividing
the Principal Amount of the relevant Bond by the
Conversion Price in effect on the Conversion Date.
The initial Conversion Price is the Base Conversion
Price.
The Conversion Price shall be adjusted upon the
occurrence of certain events including but not
limited to the following:
- a consolidation, reclassification or subdivision in relation to Shares
in which case the Conversion Price shall be adjusted proportionally for the
change in issued share capital;
- an issue of Shares, credited as fully paid, to Shareholders by way of
capitalisation of profits or reserves (including any share premium account
or capital redemption reserve) other than where the Shareholder could have
elected to receive a cash dividend instead of the Shares, in which case the
Conversion Price shall be adjusted proportionally for the change in issued
share capital;
- an issue or payment of a capital distribution including any dividends
in a financial year in excess of 5% of the volume weighted average price of
a Share, or any special dividend and similar distributions, in which case
the Conversion Price shall be adjusted by a fraction to reflect the current
market price of the Shares before the issue of such distribution less the
fair market value of such distribution;
- an issue of Shares to Shareholder by way of rights issue or issue or
grant to Shareholders of options, warrants or other rights to Shares at a
price less than 90% of the then current market price of the Shares in which
case the Conversion Price shall be adjusted by a fraction to reflect the
current market price of the Shares before the issue of such Securities or
rights less the fair market value of such Securities or rights;
- an issue of any Securities (other than Shares or options, warrants or
other rights to Shares) to Shareholders as a class by way of rights or the
grant to Shareholders by way of rights of options, warrants or other rights
to such Securities in which case the Conversion Price shall be adjusted by
a fraction to reflect the current market price of the Shares before the
issue of such Securities or rights less the fair market value of such
Securities or rights;
- an issue wholly for cash or no consideration of any Shares (other than
under (d) above) or options, warrants or other rights to Shares at a price
per Share less than 90% of the then current market price of the Shares in
which case the Conversion Price shall be adjusted proportionally for the
change in issued share capital;
- the issue, wholly for cash or no consideration of any Securities
convertible to, exchangeable with or which may be redesignated as Shares at
a conversion or exchange price per Share less than 90% of the then current
market price of the Shares at the time of issue of the Securities in which
case the Conversion Price shall be adjusted proportionally for the change
in issued share capital that would occur on conversion or exchange of the
Securities at that market price compared to the conversion price;
- if there is a modification of the rights of conversion, exchange or
subscription attaching to any Securities referred to at (g) above which
reduces the consideration received below 90% of the current market price of
the Shares at the date of announcing such modification, in which case the
Conversion Price shall be adjusted proportionally for the change in issued
share capital that would occur on conversion or exchange of the Securities
at that market price compared to the modified price;
- any offer of Securities by the Company, a subsidiary or other company
in connection with which Shareholders as a class are entitled to
participate whereby such Securities may be acquired by them (and where the
Conversion Price is not adjusted under other adjustment clauses) the
Conversion Price shall be adjusted by a fraction to reflect the current
market price of Shares before the announcement of the relevant offer or
issue of Securities and the fair market value of the portion of the offer
attributable to each Share;
- if the Company determines an adjustment should be made to the
Conversion Price as a result of circumstances not referred to in paragraphs
(a) to (i) above, the Company shall request an independent expert to
determine a fair and reasonable adjustment to the Conversion Price.
In addition to the above adjustments, which are each
intended to protect the holder of the Convertible Bond
from the potential dilutionary effect of other issues
of Shares or Securities or adjustments to the rights
under other instruments, the Conversion Price will
also be adjusted for a Change of Control event.
If an offer is made to all (or nearly all)
Shareholders, to acquire all or the majority of the
issued share capital of the Company or any persons
propose a scheme of arrangement with respect to such
an acquisition and more than 50% of the voting rights
of the issued Shares will become vested in the
offeror, then if the holder of the Convertible Bond
exercises their conversion rights within 60 days of
the change of control event then the Conversion Price
shall be adjusted -
(a) if the change of control event is during the
second year of the term of the Convertible
Bond, between 30 April 2010 and 30 April
2011, then to 90% of the previous Conversion
Price; and
(b) if the change of control event is during the
third and final year of the term of the
Convertible Bond, between 30 April 2011 and
30 April 2012, then to 95% of the previous
Conversion Price.
Common Shares to be allotted or transferred, as the
case may be, on conversion will be issued or
transferred and delivered, as the case may be,
credited as fully paid and will rank pari passu
with all other Common Shares, save that they will
not rank for any dividend or other distribution
declared or paid or made by reference to a record
date for the payment of a dividend or other
distribution with respect to the Common Shares
prior to the relevant Conversion Date.
Use of Proceeds The Issuer has used the proceeds to partially fund
the advance of an interest bearing shareholder loan
(Serviced Shareholder Loan) to the Guarantor
pursuant to a Shareholder Loan Agreement dated on
or about 2 April 2009 between the Issuer and the
Guarantor (Serviced Shareholder Loan Agreement) and
for general corporate purposes. The Guarantor
has used the amount advanced under the Serviced
Shareholder Loan Agreement towards repayment of the
Bridge Loan Facility.
Negative Pledge The Conditions of the Bonds contain negative pledge
provisions which restrict the Guarantor`s ability
to create security interests and incur financial
indebtedness except in certain limited
circumstances. The Issuer and Guarantor are also
restricted from paying distributions, advancing
loans or making payments unless after such payments
certain minimum levels of cash on hand are
achieved.
Status of the Bonds The Bonds are direct, senior, unconditional and
secured indebtedness of the Issuer and rank pari
passu amongst themselves. To the extent the
proceeds of the Transaction Security provided by
the Issuer are insufficient to discharge the
Issuer`s obligations under the Bonds, the claims of
the Bondholders in respect of such shortfall will
at all times rank at least equally with all other
present and future unsecured and unsubordinated
obligations of the Issuer from time to time
outstanding, save for such obligations as may be
preferred by provisions of law that are both
mandatory and of general application.
Subsidiary Guarantee The Guarantor, which is a Wholly Owned Subsidiary
of the Issuer, has irrevocably guaranteed to the
Trustee for the benefit of the Bondholders the due
and punctual payment by the Issuer of all amounts
owing by the Issuer in respect of the Bonds
(Subsidiary Guarantee).
Status of the Subsidiary Guarantee The Subsidiary Guarantee is an
irrevocable senior and secured obligation of the
Guarantor. To the extent the proceeds of the
Transaction Security provided by the Guarantor are
insufficient to discharge the Guarantor`s
obligations under the Subsidiary Guarantee, the
claims of the Bondholders (subject to the Security
SPV Guarantee, the Counter Indemnity Agreements and
the Transaction Security provided by the Guarantor
for its obligations under the Counter Indemnity
Agreements) in respect of such shortfall will, at
all times, rank at least equally with all other
present and future unsecured and unsubordinated
obligations of the Guarantor from time to time
outstanding, save for such obligations as may be
preferred by provisions of law that are both
mandatory and of general application.
Security SPV Guarantee The Security SPV has irrevocably guaranteed to the
Trustee for the benefit of the Bondholders the due
and punctual payment by the Guarantor of all
amounts owing by the Guarantor under the Subsidiary
Guarantee on a limited recourse basis (Security SPV
Guarantee).
Counter Indemnity AgreementsThe Guarantor has agreed to indemnify the
Security SPV in respect of any claims made against
the Security SPV under the Security SPV Guarantee
pursuant to written counter indemnity agreements
entered into between the Security SPV and the
Guarantor (Counter Indemnity Agreements). The
Guarantor has also, in terms of the Counter
Indemnity Agreements, agreed to indemnify the
Security SPV against claims made against the
Security SPV under a guarantee (FNB Guarantee)
issued to FirstRand Bank Limited (acting through
its First National Bank division) FNB as security
for the obligations of the Guarantor under a
guarantee facility (FNB Guarantee Facility) and the
Additional Guarantees (as defined below).
Status of the Counter The Counter Indemnity Agreements are irrevocable
Indemnity Agreements senior and secured obligations of the Guarantor.
To the extent the proceeds of the transaction
security provided by the Guarantor for its
obligations under the Counter Indemnity Agreements
are insufficient to discharge the Guarantor`s
obligations under the Counter Indemnity Agreements,
the claims of the Security SPV (subject to the
Issuer Guarantee and the transaction security
provided by the Issuer for its obligations under
the Issuer Guarantee) in respect of such shortfall
will, at all times, rank at least equally with all
other present and future unsecured and
unsubordinated obligations of the Guarantor, from
time to time outstanding, save for such obligations
as may be preferred by provisions of law that are
both mandatory and of general application.
Issuer Guarantee The Issuer has irrevocably guaranteed to the
Security SPV the due and punctual payment by the
Guarantor of all amounts owing by the Guarantor in
respect of the Counter Indemnity Agreements.
Intercreditor AgreementThe Security SPV has issued the Security SPV
Guarantee and the FNB Guarantee, and will be
permitted by the terms of an Intercreditor
Agreement dated on or about the Issue Date between
the Issuer, the Guarantor, the Security SPV, the
Trustee and FNB to issue the Security SPV Guarantee
and additional guarantees securing indebtedness of
the Guarantor up to a maximum aggregate principal
amount of indebtedness from time to time of
ZAR900,000,000 (inclusive of the amount outstanding
under the Convertible Bonds from time to time and
the amounts payable under the FNB Guarantee
Facility from time to time) (Additional
Guarantees). The Intercreditor Agreement, inter
alia, governs the relationship between the
Bondholders, FNB and the additional lenders to whom
such additional guarantees are issued.
Trust Deed The Convertible Bonds are constituted by a Trust
Deed dated 26 March 2009 between the Issuer, the
Guarantor, the Security SPV and Maitland Trust
Limited as Trustee.
Events of Default Certain events defined as Events of Default in the
terms of the Convertible Bonds permit acceleration
of the Convertible Bonds. These events are
considered relatively standard for convertible
bonds of this type and include a failure to pay
principal or interest under the Convertible Bond
terms or associated transaction documents, non-
payment or acceleration of other financial
indebtedness above certain thresholds, enforcement
proceedings occurring, insolvency events occurring
and similar events. Upon acceleration for any such
event, the Convertible Bonds will become
immediately due and repayable at their Principal
Amount, together with accrued and unpaid interest.
Manager FirstRand Bank Limited (acting through its Rand
Merchant Bank division), a public company and
registered bank duly incorporated with limited
liability in accordance with the company and
banking laws of South Africa with Registration
Number 1929/001225/06 (RMB).
Underwriter RMB.
Paying Agent RMB or such other paying agent as may be appointed
by the Issuer from time to time.
Conversion Agent RMB or such other conversion agent as may be
appointed by the Issuer from time to time.
Calculation Agent RMB or such other calculation agent as may be
appointed by the Issuer from time to time.
Currency South African Rand (ZAR).
Governing Law The Bonds and the Trust Deed will be governed by,
and construed in accordance with, the laws of South
Africa.
Listing and Trading The Convertible Bonds are listed on the JSE.
Transaction Security The Issuer will provide direct and indirect
security for its obligations under the Convertible
Bonds over its entire shareholding in, and its
claims on loan account under the Serviced
Shareholder Loan against, the Guarantor (including,
without limitation, its claims in respect of the
Serviced Shareholder Loan under the Serviced
Shareholder Loan Agreement). The Guarantor will
create a sinking fund (in the form of cash and/or
Permitted Investments (as defined in the Trust
Deed)) (Required Sinking Fund Security) in
prescribed amounts and by no later than prescribed
dates (in accordance with the terms of the Trust
Deed). The Guarantor will provide security in
favour of the Security SPV for its obligations
under the Counter Indemnity Agreements.
Date: 28/07/2009 10:18:01 Produced by the JSE SENS Department.
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completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
