| Mon 26 Apr 2010, 7:05 | | HML - Hulamin - Proposed rights offer cautionary announcement and notice of |
|
HLM
HLM
HML - Hulamin - Proposed rights offer, cautionary announcement and notice of
annual general meeting
Hulamin Limited
Incorporated in the Republic of South Africa
(Registration number: 1940/013924/06)
ISIN: ZAE000096210
Share Code: HML
("Hulamin" or "the Company")
PROPOSED RIGHTS OFFER, CAUTIONARY ANNOUNCEMENT AND NOTICE OF ANNUAL GENERAL
MEETING
1. Introduction
In conjunction with the release of its annual results for the year ended 31
December 2009, Hulamin announced on 11 February 2010 that the board of directors
("the Board") was assessing various opportunities to optimise the Company`s
capital structure in order to support its medium-term growth target. The Board
has resolved to raise R750 million equity capital by way of a rights offer of
ordinary shares to Hulamin ordinary shareholders (the "Rights Offer").
2. Rationale for the Rights Offer
Following the significant expansion of its rolled products facilities in 2000,
Hulamin`s rolled products sales grew from 50 000 tons per annum to 190 000 tons
per annum in 2008. The global recession in 2008 and 2009 resulted in sales
reducing sharply and have since recovered strongly. The Company has completed a
further expansion of its rolled products capacity, which was opened in November
2009, and this will enable it to increase sales volumes, particularly of higher
margin products, to around 250 000 tons per annum in the medium term. The
increased capacity is expected to result in growth in sales in the period from
2010 to 2014 which will require higher investment in working capital.
Hulamin produces the majority of its rolling slab requirements from its own
facilities, with the balance sourced from BHP Billiton Plc ("BHP Billiton").
The Company intends expanding its slab casting facilities, which will coincide
with the exit by BHP Billiton from the production of rolling slab.
In recent years the increased volatility in the price of aluminium has caused
significant movements in the level of Hulamin`s borrowings. This has created the
need for increased levels of available funding facilities.
Hulamin`s current funding structure is not well aligned with its growth and
operational objectives, and the Company therefore proposes applying the proceeds
of the Rights Offer to reducing its current short term debt and to repay long
term debt falling due in the next two years. This will enable the Company to
fund the expected growth in sales volumes from the already installed capacity,
cater for increased slab casting facilities, and reduce borrowing costs and
liquidity risks.
3. Shareholder Support
Shareholders holding approximately 79% of the listed ordinary shares in Hulamin
have indicated their support for the Rights Offer.
4. Cautionary announcement
Hulamin ordinary shareholders are advised that once the terms of the Rights
Offer are finalised, a detailed terms announcement will be released on SENS and
published in the press. Hulamin ordinary shareholders are accordingly advised to
exercise caution when dealing in the Company`s securities until a further
announcement is made.
6. Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of shareholders of
Hulamin will be held at the Company`s registered offices, Moses Mabhida Road,
Pietermaritzburg at 14h00 on Wednesday, 19 May 2010 to consider and, if deemed
fit, to pass with or without modification, the ordinary and special resolutions
proposed thereat.
26 April 2010
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 26/04/2010 07:05:04 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
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.
