| Tue 31 May 2011, 8:51 | | MND/MNP - Mondi - Company announcement |
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MND MNP
MND MNP
MND/MNP - Mondi - Company announcement
Mondi Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1967/013038/06)
JSE share code: MND ISIN: ZAE000097051
Mondi plc
(Incorporated in England and Wales)
(Registration number: 6209386)
JSE share code: MNP ISIN: GB00B1CRLC47
LSE share code: MNDI
THIS DOCUMENT IS NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
As part of the dual listed company structure, Mondi Limited and Mondi plc
(together "Mondi Group") notify both the JSE Limited ("JSE") and the London
Stock Exchange of matters required to be disclosed under the JSE Listings
Requirements and/or the Disclosure and Transparency and Listing Rules of the
United Kingdom Listing Authority.
Announcement to shareholders of Mondi Group regarding:
- The proposed demerger of Mpact Limited (the proposed new name for Mondi
Packaging South Africa Limited) by Mondi Limited to the ordinary shareholders of
Mondi Limited ("Mondi Limited Shareholders"), (the "Demerger");
- The proposed conversion of Mondi Limited Ordinary Shares and Mondi Limited
Special Converting Shares with a par value of R0.20 per share to shares of no
par value (the "Mondi Limited Conversion"); and
- The proposed consolidation of the Mondi Limited Ordinary Shares (the "Mondi
Limited Consolidation").
The proposed Demerger of Mpact (the proposed new name for Mondi Packaging South
Africa Limited)
1. Introduction
On Thursday, 7 April 2011, Mondi Group announced its intention to demerge Mondi
Packaging South Africa Limited and separately list it, under a new name, on the
JSE. Its new name will be Mpact Limited ("Mpact"). The Demerger will be
implemented by way of a dividend in specie from Mondi Limited to Mondi Limited
Shareholders on Monday, 18 July 2011 on the basis of one Mpact Share for every
one Mondi Limited Ordinary Share held by each such shareholder, such that Mondi
Limited`s entire shareholding in Mpact Limited will be distributed to Mondi
Limited Shareholders.
Mondi plc Shareholders will not be entitled to Mpact Shares; rather, they will
receive the benefit of an appropriate adjustment, a "matching action" (for the
purposes of the Dual Listed Companies ("DLC") Agreements), to reflect the value
distributed by Mondi Limited to Mondi Limited Shareholders. The Boards have
determined that a consolidation of the existing Mondi Limited ordinary shares
("Existing Mondi Limited Ordinary Shares") is the most appropriate form of
adjustment in the circumstances. The effect of the Mondi Limited
Consolidation will be that Mondi plc Shareholders will collectively hold an
increased interest in the Mondi Group.
After the Demerger and Mondi Limited Consolidation, Mondi Limited Shareholders
will hold new Mondi Limited ordinary shares ("New Mondi Limited Ordinary
Shares") as well as the newly listed Mpact Shares. The New Mondi Limited
Ordinary Shares will, as a result of the Mondi Limited Consolidation, replace
the Existing Mondi Limited Ordinary Shares and will represent, in aggregate, a
correspondingly decreased proportionate interest in the Mondi Group. The
Demerger and Mondi Limited Consolidation will not affect the "Equalisation
Ratio" used to determine the economic and voting interests represented by Mondi
plc Ordinary Shares relative to the economic and voting interests of Mondi
Limited Ordinary Shares, which will remain 1:1.
2. Conditions precedent
In terms of the Mondi Limited Articles of Association, Mondi Limited
Shareholders are required to approve the Demerger, as a dividend in specie, by
way of an ordinary resolution. Also, in terms of the SA Companies Act, the Mondi
Limited Consolidation will require approval by special resolution of the Mondi
Limited Shareholders. These approvals will be sought at the Mondi Limited
General Meeting. The Boards have determined that the Demerger and the
accompanying matching action (being the Mondi Limited Consolidation) should also
be subject to the approval of Mondi plc Shareholders. These approvals are by way
of a Class Rights Action and, accordingly, will not be effective unless passed
by independent votes in favour by Mondi plc Shareholders and Mondi Limited
Shareholders, respectively. To facilitate the Mondi Limited Consolidation, the
Mondi Limited Ordinary Shares and Mondi Limited Special Converting Shares will,
at the same time, be converted to shares with no par value.
Each resolution must be approved in order for the Demerger and Mondi Limited
Consolidation to be implemented.
3. Rationale for the Demerger
Mpact is essentially southern African focused, with most of its operations
located throughout South Africa and with single plants in Namibia, Mozambique
and Zimbabwe. It is an integrated producer of corrugated packaging products, has
a growing rigid plastics packaging business, and is also involved in the
production of cartonboard.
Mpact is unique within the Mondi Group as no other part of the Mondi Group
produces rigid plastics or cartonboard. Mpact`s primary growth opportunities
going forward are expected to be in expanding the rigid plastics business,
thereby diverging further from the Mondi Group`s core strategic focus. The
primary rationale for seeking a separate JSE listing for Mpact is that it will
allow it to pursue its own growth strategy without the constraint of a
shareholder that has differing strategic priorities. It is considered that a
separate listing for Mpact, with the ability to independently access capital in
support of its strategic objectives, is in the best interests of Mpact, the
Mondi Group and related stakeholders, including employees. The Demerger
thereby endorses Mpact`s own strategy and provides a clear benefit, as both
the Mondi Group and Mpact will be able to take better advantage of their
respective growth opportunities.
4. The Demerger
The Demerger will be implemented by way of a dividend in specie from Mondi
Limited. Mondi Limited Shareholders` entitlement to the dividend in specie will
be on the basis that each such shareholder will receive one Mpact Share for
every one Mondi Limited Ordinary Share held on the Demerger Record Date. Prior
to the Demerger, it is intended that: (i) Mondi Limited and Shanduka will
subscribe for new Mpact Shares; (ii) certain shareholder loans made to Mpact
will be repaid using the cash proceeds received from the new share subscription
as well as newly arranged borrowing facilities; and (iii) the Mpact Shares held
by Mondi Limited`s employee share ownership trust will be acquired by the Mondi
Group, such that the Mondi Group`s shareholding in Mpact will increase to 89.55%
of the total number of Mpact Shares in issue following these steps and
Shanduka`s shareholding will reduce to 10.45%. It is the totality of this
resulting interest in Mpact held by the Mondi Group which will be distributed to
Mondi Limited Shareholders by way of the Demerger.
5. The Mondi Limited Consolidation
A consolidation of the Mondi Limited Ordinary Shares owned by Mondi Limited
Shareholders, the effect of which will be to reduce their proportionate interest
in the Mondi Group as a result of the reduction in the number of Mondi Limited
Ordinary Shares, will be undertaken in order to compensate Mondi plc
Shareholders for the value distributed to Mondi Limited Shareholders under the
Demerger.
The Mondi Limited Consolidation is intended to have, as far as practicable, an
equivalent but not necessarily identical economic effect on Mondi plc
Shareholders as the economic effect that the Demerger will have on Mondi Limited
Shareholders. The total number of New Mondi Limited Ordinary Shares held by
Mondi Limited Shareholders after the Mondi Limited Consolidation will be
determined by reference to the volume weighted average price ("VWAP") of Mpact
Shares traded on the JSE, the VWAP of Existing Mondi Limited Ordinary Shares
traded on the JSE and the VWAP of Mondi plc Ordinary Shares traded on the London
Stock Exchange and JSE, in each case during the applicable VWAP determination
period. A formula for determining the number of New Mondi Limited Ordinary
Shares is set out in the Appendix to this announcement. The formula has been
designed to ensure that the benefit per Mondi plc Ordinary Share received by
each Mondi plc Shareholder as a result of the Mondi Limited Consolidation
matches as closely as possible the value per Mondi Limited Ordinary Share
received (in the form of Mpact Shares) by each Mondi Limited Shareholder
pursuant to the Demerger. Because Mondi Limited Ordinary Shares will trade in
pre-consolidated form until Monday, 1 August 2011 (the intended date for
consolidation into the New Mondi Limited Ordinary Shares), the formula
calculates a theoretical post-consolidation price based on the VWAP of Existing
Mondi Limited Ordinary Shares and Mondi plc Ordinary Shares, as well as Mpact
Shares.
It is expected that the New Mondi Limited Ordinary Shares will begin trading on
Monday, 1 August 2011 and the Mondi Limited Consolidation will become effective
on Monday, 8 August 2011.
As a result of the Mondi Limited Consolidation, it will be necessary to make
certain adjustments to the Mondi plc Special Converting Shares to ensure that,
in accordance with the principles of the DLC Structure, the relevant equivalent
number of Mondi plc Special Converting Shares issued by Mondi plc (by reference
to the number of New Mondi Limited Ordinary Shares) remains in issue and that
the Mondi plc Special Converting Shares issued by Mondi plc have the appropriate
par value.
6. The Mondi Limited Nominal Value Conversion
The SA Companies Act, which came into effect on 1 May 2011, inter alia, limits
Mondi Limited`s ability to restructure its par value share capital, subject to
certain transitional arrangements. In order to enable the Mondi Limited
Consolidation, having regard to the provisions of the SA Companies Act, it is
proposed that resolutions be passed (in the case of Mondi Limited, as special
resolutions) converting the issued as well as the authorised but unissued Mondi
Limited Ordinary Shares and Mondi Limited Special Converting Shares to shares
with no par value.
As required by the SA Companies Act and the regulations promulgated thereunder,
the directors of Mondi Limited have caused a report to be prepared setting out
the effects, if any, of the Mondi Limited Conversion, which is incorporated into
the Circulars referred to in paragraph 14 below. A related amendment to the
Mondi Limited Articles of Association is also being made, as set out in the
respective notices of General Meeting. Other than having no par value, the Mondi
Limited Conversion will have no effect on the trading of or rights attaching to
Mondi Limited Ordinary Shares or Mondi Limited Special Converting Shares. The
Mondi Limited Conversion will not affect the "Equalisation Ratio" used to
determine the economic and voting interests represented by Mondi plc Ordinary
Shares relative to the economic and voting interests of Mondi Limited Ordinary
Shares, which will remain 1:1, or Mondi Limited`s tax position.
7. Salient dates and times
Assuming the Resolutions in respect of the Demerger, the Mondi Limited
Conversion and the Mondi Limited Consolidation are approved, set out below is an
expected timetable of principal events. Each of the times and dates in the table
below is indicative only and may be subject to change.
The General Meetings
Latest time and date for receipt of Mondi
plc and Mondi Limited 11.00 a.m. (UK) / 12.00 p.m.
General Meetings Forms of Proxy (South Africa) on Tuesday,
28 June 2011
Mondi plc General Meeting and Mondi
Limited General Meeting 11.00 a.m. (UK) / 12.00 p.m.
(South Africa) on Thursday,
30 June 2011
The Demerger
Last day to trade in Mondi Limited Ordinary
Shares on the JSE to participate in the Demerger Friday, 8 July 2011
Mondi Limited Ordinary Shares trade "ex" the
entitlement to Mpact Shares Monday, 11 July 2011
Mpact Shares listed and commence trading on
the JSE Monday, 11 July 2011
Demerger Record Date Friday, 15 July 2011
Demerger effected Monday, 18 July 2011
The Mondi Limited Conversion and Mondi Limited
Consolidation
VWAP determination period from 8.00 a.m. (UK) /
9.00 a.m. (South Africa)
on Monday, 11 July 2011 to
4.00 p.m. (UK) / 5.00 p.m.
(South Africa) on
Thursday, 21 July 2011
Announcement of the Consolidation Ratio Friday, 22 July 2011
Last day to trade in Existing Mondi Limited
Ordinary Shares Friday, 29 July 2011
New Mondi Limited Ordinary Shares listed
and commence trading on the JSE Monday, 1 August 2011
Conversion and Consolidation Record Date Friday, 5 August 2011
Conversion and Consolidation effected Monday, 8 August 2011
Note: A full timetable of events in connection with the Demerger is set out in
the Mpact pre-listing statement and in the Circulars. Only the key dates in
relation to the Demerger, the Mondi Limited Conversion and Mondi Limited
Consolidation and the Mondi plc and Mondi Limited General Meetings are set out
here. If any of the above times and/or dates change, the revised timetable
and/or dates will be notified to Mondi plc Shareholders and Mondi Limited
Shareholders by announcement through a Regulatory Information Service and SENS.
8. Effect of the Demerger and Mondi Limited Consolidation on Mondi
The Demerger and Mondi Limited Consolidation are not expected to have a material
impact on Mondi`s earnings per share and gearing and the Mondi Limited
Conversion will have no effect on Mondi`s earnings per share and gearing. For
the 12 months ended 31 December 2010, Mpact made up EUR 51 million
(approximately 10%) of Mondi`s underlying operating profit and EUR 278 million
(approximately 9%) of Mondi`s net assets.
The Mondi Limited Consolidation is intended to reduce the number of issued Mondi
Limited Ordinary Shares by approximately the same value as the value of the
Mpact Shares received by Mondi Limited Shareholders. There will be no effect on
the number of Mondi plc Ordinary Shares held by Mondi plc Shareholders,
although, as described above, the proportionate shareholding interest in the
Mondi Group following the Demerger represented by the Mondi plc Ordinary Shares
will increase and, accordingly, there will be an increase in the Mondi plc
Shareholders` aggregate proportionate economic and voting interest in the Mondi
Group. The Mondi Limited Consolidation, accordingly, will compensate Mondi plc
Shareholders for the value of Mpact Shares received only by Mondi Limited
Shareholders which, as far as practicable, will have an equivalent but not
necessarily identical economic effect on Mondi plc Shareholders to the economic
effect of the Demerger on Mondi Limited Shareholders.
The Demerger and Mondi Limited Consolidation will not affect the "Equalisation
Ratio" used to determine the economic and voting interests represented by Mondi
plc Ordinary Shares relative to the economic and voting interests of Mondi
Limited Ordinary Shares, which will remain 1:1. This means, for example, that
the amount of any cash dividend paid in respect of each Mondi plc Ordinary Share
will normally be matched by an equivalent cash dividend in respect of each Mondi
Limited Ordinary Share, and vice versa.
The Demerger and Mondi Limited Consolidation will not affect the status of Mondi
plc`s listings on the London Stock Exchange and the JSE or Mondi Limited`s
listing on the JSE, other than that Mondi Limited Ordinary Shares will trade on
the JSE under a new ISIN following the Mondi Limited Consolidation.
In compliance with the JSE Listings Requirements, the Mondi Group has obtained
the approval of the Exchange Control Department of the South African Reserve
Bank in respect of the Demerger and the Mondi Limited Consolidation.
Mondi Group has a dividend policy that reflects its strategy of disciplined and
value creating investment and growth with the aim of offering shareholders long-
term dividend growth. Mondi targets a dividend cover range of two to three times
on average over the cycle, although the payout ratio in each year will vary in
accordance with the business cycle and is subject to Mondi having sufficient
distributable reserves. This policy will not change as a result of the Demerger
and Mondi Limited Consolidation.
Mondi Limited currently has a "Level 3 Contributor" rating in terms of the Codes
of Good Practice on Black Economic Empowerment in South Africa ("the BBBEE
Codes"). Following the Demerger, Mondi anticipates retaining an acceptable and
competitive BBBEE rating. Given the broad based nature of the scorecard in terms
of the BBBEE Codes, with ownership being only one of seven elements used to
measure compliance, it is not considered necessary to pursue any equity related
initiatives to maintain an acceptable BBBEE rating.
9. Employee Share Plans
Options and awards will continue to subsist over Mondi plc Ordinary Shares and
Mondi Limited Ordinary Shares and their value is expected to be largely
preserved by the Mondi Limited Consolidation, with the result that it is not
considered necessary to adjust their terms.
As a result of the Demerger, all Mpact employees will cease to participate in
Mondi`s Employee Share Plans.
10. Related party transaction
Prior to the Demerger and listing of Mpact, certain Mondi Group and Shanduka
shareholder loans will be repaid using the cash proceeds received from a new
share subscription by Mondi Limited and Shanduka. The value of the Shanduka
shareholder loans to be repaid is R168m. Shanduka Group, the holding company of
Shanduka, is a related party of the Mondi Group for the purpose of the "Listing
Rules" of the London Stock Exchange as Cyril Ramaphosa, joint chairman of the
Mondi Group, has a 33.1% shareholding in Shanduka Group, which, being in excess
of 30%, results in Shanduka Group being an "associate" of Mr Ramaphosa and
therefore a related party for the purposes of those rules. For the purpose of
the JSE Listings Requirements, Shanduka is not treated as a related party.
11. Pro Forma financial effects of the Demerger for the financial year ended 31
December 2010
The pro forma financial effects of the Mondi Limited Consolidation will be
disclosed to shareholders in a subsequent announcement once the exact details of
the Mondi Limited Consolidation are available.
In accordance with the provisions of the JSE Listings Requirements, the
unaudited pro forma financial effects set out below are included for the purpose
of illustrating the effects of the Demerger on Mondi`s underlying earnings,
diluted underlying earnings, basic earnings, diluted earnings, headline
earnings, diluted headline earnings, net asset value and net tangible asset
value, per Mondi Ordinary Share, for the year ended 31 December 2010 as if such
transaction had occurred on 1 January 2010 for income statement purposes and 31
December 2010 for balance sheet purposes. The pro forma effects are the
responsibility of the directors and have been prepared in accordance with the
guidelines issued by the South African Institute of Chartered Accountants.
These unaudited pro forma financial effects of the Demerger are presented for
illustrative purposes only and because of their nature, may not give a fair
reflection of Mondi Group`s position, changes in equity, results of operations
or cash flows following implementation of the Demerger. For the avoidance of
doubt, these financial effects do not include the impact of the Mondi Limited
Consolidation. The Mondi Limited Consolidation will result in a reduction in the
number of Mondi Limited Ordinary Shares in issue and therefore reduce the
dilutive impact of the Demerger on a per share basis. The actual impact on the
per share figures will be incorporated in a subsequent announcement.
Per Mondi Ordinary Share(Euro cents)1 Before the After the Percentage
Demerger4 Demerger5 Change
Underlying earnings 2 47.0 42.6 (9.4)
Basic earnings 44.1 48.8 10.7
Headline earnings 3 47.0 42.7 (9.1)
Diluted underlying earnings 2 46.5 42.1 (9.5)
Diluted earnings 43.6 48.2 10.6
Diluted headline earnings 3 46.5 42.2 (9.2)
Net asset value 6.33 5.94 (6.2)
Tangible net asset value 5.71 5.47 (4.2)
Notes:
1. Full details of the pro forma financial effects of the Demerger are contained
in the Circulars referred to in paragraph 14.
2. Underlying earnings per share excludes the impact of special items.
3. The presentation of headline earnings per share is mandated under JSE
Listings Requirements. Headline earnings has been calculated in accordance with
Circular 3/2009, `Headline Earnings`, as issued by the South African Institute
of Chartered Accountants.
4. The Group financial information has been extracted, without adjustment, from
the Group`s audited results for the year ended 31 December 2010.
5. The adjustments include the following main items:
- The exclusion of Mpact`s financial contribution to the Group including the
reversal of all related consolidation adjustments;
- The impact of the recapitalisation of Mpact, as described in section 4 of this
announcement;
- The dividend in specie declared to Mondi Limited Shareholders, recognised at
the estimated fair market value of those Mpact Shares distributed; and
- Estimated transaction costs.
12. Mondi plc and Mondi Limited General Meetings
The Mondi plc General Meeting will be held on Thursday, 30 June 2011 at 11.00
a.m. (UK time) at One Silk Street, London EC2Y 8HQ, UK.
The Mondi Limited General Meeting will be held on Thursday, 30 June 2011 at
12.00 p.m. (South African time) at 10 Fricker Road, Illovo, 2196, Gauteng, South
Africa.
Shareholders of both Mondi plc and Mondi Limited will be asked to vote on
various resolutions (set out more fully in the notices convening the respective
General Meetings) to approve the Demerger, the Mondi Limited Conversion, the
Mondi Limited Consolidation and make amendments to the Mondi Limited Articles of
Association and adjustments to the Mondi plc Special Converting Shares
consequent thereon.
13. Restricted Shareholders
Mondi Limited Shareholders with registered addresses in any of Australia, Canada
or Japan (each an "Excluded Territory") or who are located or resident in an
Excluded Territory ("Restricted Shareholders") and, subject to certain
exceptions, Mondi Limited Shareholders with registered addresses in the United
States or who are located or resident in the United States ("US Shareholders")
will not receive any Mpact Shares pursuant to the Demerger. A mechanism will be
put in place so that the Mpact Shares due to such Restricted Shareholders and,
subject to certain exceptions, the US Shareholders will not be delivered to such
shareholders personally, but rather will be delivered, following the Demerger,
to a third party in South Africa nominated by Mondi Group, which will hold such
Mpact Shares on behalf of such Restricted Shareholders and US Shareholders.
Mondi Limited or the third party shall co-ordinate the disposal of the Mpact
Shares due to such Restricted Shareholders and US Shareholders for cash in South
Africa and distribute the cash proceeds therefrom (translated into the relevant
local currency or US dollars (as the case may be) from South African rand at the
ruling exchange rate at the relevant time net of applicable fees, expenses,
taxes and charges) to such Restricted Shareholders and US Shareholders, in
proportion to such shareholders` entitlement to Mpact Shares. There can be no
assurance as to what price such Restricted Shareholders or US Shareholders will
receive from the disposal of such Mpact Shares or the timing of such receipt or
the exchange rate that is achieved in converting the proceeds of the disposal of
such Mpact Shares from South African rand into the relevant local currency. The
disposal of Mpact Shares due to such Restricted Shareholders and US Shareholders
will be pursuant to Regulation S under the US Securities Act of 1933 (the "US
Securities Act").
14. Circulars
Mondi plc and Mondi Limited Circulars, including the notices convening General
Meetings of each company, which documents contain full details of the Demerger,
Mondi Limited Conversion and Mondi Limited Consolidation are being posted to
Mondi plc and Mondi Limited Shareholders today, Tuesday, 31 May 2011. The Mpact
pre-listing statement will also be posted today to Mondi Limited Shareholders
entitled to receive Mpact Shares, and will be available on the Mondi Group`s
website (other than to Restricted Shareholders and, subject to certain
exceptions, US Shareholders).
15. Documents available for inspection
A copy of the Mondi plc Articles of Association, Mondi Limited`s Memorandum of
Incorporation, the Circulars, incorporating the notices of the Mondi plc and
Mondi Limited General Meetings, and the Mpact pre-listing statement will be
available for inspection at the registered offices of Mondi Limited and Mondi
plc and at One Silk Street, London EC2Y 8HQ, UK during normal business hours on
any business day (excluding public holidays) from the date of this announcement
until the close of the General Meeting.
16. Boards` recommendation and Directors` intentions
The Boards consider the Demerger, the Mondi Limited Conversion, the Mondi
Limited Consolidation, the amendments to the Mondi Limited Articles of
Association and the adjustments to the Mondi plc Special Converting Shares to be
in the best interests of Mondi and its shareholders as a whole. Accordingly, the
Boards recommend that Mondi plc Shareholders and Mondi Limited Shareholders vote
in favour of the resolutions to be proposed at the General Meetings of Mondi plc
and Mondi Limited, as the Directors intend to do in respect of their own
beneficial holdings, being in aggregate 694,218 Mondi plc Ordinary Shares and
44,756 Mondi Limited Ordinary Shares, which represent 0.19% of Mondi plc`s
issued ordinary share capital and 0.03% of Mondi Limited`s issued ordinary share
capital, respectively, as at Thursday, 19 May 2011. Mr Ramaphosa, as executive
chairman of the Shanduka Group and a shareholder in the Shanduka Group, did not
take part in the Boards` consideration of the Demerger and the Mondi Limited
Consolidation.
17. Further cautionary announcement
Further to the announcement on 7 April 2011, the outcome of the proposed
Demerger may have a material effect on the price of Mondi Group`s securities.
Accordingly, shareholders are advised to continue to exercise caution when
dealing in their Mondi Group shares until a further announcement is made.
Rothschild is acting as financial adviser and transaction sponsor to the Mondi
Group and Rand Merchant Bank is acting as financial adviser and transaction
sponsor to Mpact.
/ends
Contact:
Mondi Group
Lora Rossler
Group Corporate Affairs Manager
Tel: +27 (0)31 451 2040 or +27 (0)83 627 0292
E-mail: lora.rossler@mondigroup.co.za
Kerry Crandon
Group Communications Manager
Tel: +27 (0)11 994 5425 or +27 (0)83 389 3738
E-mail: kerry.crandon@mondigroup.com
Andrew King
Group CFO
Tel: +27 (0)11 994 5415
E-mail: andrew.king@mondigroup.com
Appendix
Mondi Limited Consolidation formula
The Mondi Limited Consolidation will be implemented in accordance with the
formula set out below. The total number of New Mondi Limited Ordinary Shares
which will be held by Mondi Limited Shareholders will be determined by reference
to the price of Mpact Shares (as measured by the VWAP of Mpact Shares traded on
the JSE during the VWAP period), the price of Existing Mondi Limited Ordinary
Shares (as measured by the VWAP of Existing Mondi Limited Ordinary Shares traded
on the JSE during the VWAP period) and the price of Mondi plc Ordinary Shares
(as measured by the VWAP of Mondi plc Ordinary Shares traded on the London Stock
Exchange and the JSE during the VWAP period).
The total number of New Mondi Limited Ordinary Shares which will be held by
Mondi Limited Shareholders will be determined by the following formula:
(CxD)
A=B -
E
where:
A= Number of New Mondi Limited Ordinary Shares which will be held by Mondi
Limited Shareholders;
B = Number of Existing Mondi Limited Ordinary Shares in issue one day prior to
the intended date of the Mondi Limited Consolidation;
C= VWAP of Mpact Shares traded on the JSE during the VWAP period;
D= Number of Mpact Shares to which Mondi Limited Shareholders are entitled1;
and
E= Theoretical post-consolidation price calculated based on the VWAP of Mpact
Shares traded on the JSE, the VWAP of Existing Mondi Limited Ordinary Shares
traded on the JSE and the VWAP of Mondi plc Ordinary Shares traded on the London
Stock Exchange and the JSE, in each case during the VWAP period. E will be
determined by the following formula:
(CxD)+(FxB)+(GxH)
E=
(B+H)
where:
F= VWAP of Existing Mondi Limited Ordinary Shares traded on the JSE during the
VWAP period;
G= VWAP of Mondi plc Ordinary Shares traded on the London Stock Exchange and the
JSE during the VWAP period2; and
H= Number of Mondi plc Ordinary Shares in issue one day prior to the intended
date of the Mondi Limited Consolidation.
Notes:
1. This number does not include the Mpact Shares that are owned by Shanduka.
2. The VWAP of Mondi plc Ordinary Shares traded on the London Stock Exchange
will be converted from pounds sterling to South African rand on a daily basis
using the South African rand/pounds sterling exchange rate provided by the South
African Reserve Bank.
For illustrative purposes only, should the equity value of Mpact attributable to
Mondi Limited Shareholders during the VWAP period be between R2 billion and R3
billion, using the Mondi Limited Ordinary Share and Mondi plc Ordinary Share
VWAPs of R65.02, R67.82 and 607.7p, respectively (being the VWAPs on Thursday,
19 May 2011), following the Mondi Limited Consolidation, the number of New Mondi
Limited Ordinary Shares in issue would reduce to between approximately 117 and
102 million from the current 147 million Existing Mondi Limited Ordinary Shares.
This equates to a consolidation of between approximately 20.3 and 30.4% of the
Existing Mondi Limited Ordinary Shares. Based on these assumptions, following
the Demerger and Mondi Limited Consolidation, the ordinary share capital of
Mondi Limited would represent between 24.2 and 21.8% of the aggregate combined
ordinary share capital of the Mondi Group, as compared to the current 28.6%. The
actual number of New Mondi Limited Ordinary Shares to be derived from Existing
Mondi Limited Ordinary Shares will depend on the actual VWAPs of Mpact Shares,
Mondi Limited Ordinary Shares and Mondi plc Ordinary Shares at the relevant time
and may be higher or lower than these indicative figures.
Editors` notes
About Mondi:
Mondi is an international paper and packaging group, with production operations
across 31 countries and revenues of EUR 6.2 billion in 2010. The Mondi Group`s
key operations are located in central Europe, Russia and South Africa and as at
the end of 2010, Mondi employed approximately 29,000 people.
Mondi is fully integrated across the paper and packaging process, from the
growing of wood and the manufacture of pulp and paper (including recycled
paper), to the conversion of packaging papers into corrugated packaging,
industrial bags and coatings.
The Mondi Group is principally involved in the manufacture of packaging paper,
converted packaging products and uncoated fine paper (UFP).
Mondi has a dual listed company structure, with a primary listing on the JSE
Limited for Mondi Limited under the ticker code MND and a premium listing on the
London Stock Exchange for Mondi plc, under the ticker code MNDI. The Mondi Group
has been recognised for its sustainability through its inclusion in the
FTSE4Good UK, Europe and Global indices in 2008, 2009 and 2010 and the JSE`s
Socially Responsible Investment (SRI) Index in 2007, 2008, 2009 and 2010.
About Mpact:
Turnover: R5.7 billion in 2010 from continuing operations
EBITDA: R794 million in 2010 from continuing operations
PBT: R86 million in 2010 from continuing operations
Gross assets: R5.1 billion in 2010 from continuing operations
Employees: approximately 3,500
Operations: 22 manufacturing operations, 29 operating sites
Revenue mix: Plastics 23%, Paper 77% in 2010 from continuing operations
Notice to Shareholders
This announcement does not constitute an offer to sell nor a solicitation to buy
securities as such terms are defined under the US Securities Act.
The securities referenced herein have not been and will not be registered under
the US Securities Act or under any securities laws of any state or other
jurisdiction of the United States and may not be offered, sold or taken up,
directly or indirectly, within the United States except pursuant to an
applicable exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act and in compliance with any applicable
securities laws of any state or other jurisdiction of the United States. There
will be no public offer of Mpact Shares in the United States.
The securities referenced herein have not been and will not be registered under
the securities laws of Australia, Canada or Japan and may not be offered, sold,
taken up or renounced, directly or indirectly, within such jurisdictions except
pursuant to an applicable exemption from and in compliance with any applicable
securities laws.
31 May 2011
Sponsor: UBS South Africa (Pty) Ltd
Date: 31/05/2011 08:00:06 Produced by the JSE SENS Department.
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