| Thu 28 Jun 2001, 0:00 | | Randgold - Proposed Mandatory Repurchase Of Shares |
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Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Nasdaq trading symbol: Rangy
("Randgold & Exploration")
PROPOSED MANDATORY REPURCHASE OF SHARES BY RANDGOLD RESOURCES
Randgold Resources Limited, a company which is listed on the London Stock
Exchange and in which Randgold & Exploration has a 61.3% interest, today
announced a proposed mandatory repurchase of part of its issued shares. For
the information of Randgold & Exploration shareholders, the text of the
Randgold Resources announcement is published below.
Shareholders are advised that the board of Randgold & Exploration has
resolved to vote in favour of the proposed transaction, which will be
submitted to members for approval at an extraordinary general meeting of
Randgold Resources on 23 July 2001. Subject to the necessary resolutions
being passed at that meeting, and once the new loan facility secured by
Randgold Resources has become unconditionally available for drawdown,
Randgold & Exploration will use the proceeds of the share repurchase to
repay the US$48 million convertible bond, which is due for settlement in
September 2001.
"Proposed Mandatory Repurchase of up to 11 831 915 Randgold Resources Shares
and posting of Circular to Shareholders
The Board of Randgold Resources announced today that Randgold Resources is
proposing to return a maximum amount of US$82.83 million to Shareholders
through a mandatory repurchase of up to 11 831 915 Randgold Resources Shares
(representing 34.08 per cent. of Randgold Resources' share capital in issue
on the Record Date assuming that all exercisable options in respect of
Randgold Resources shares are exercised prior to that date) at a price of
US$7 per Share ("the Repurchase"). The proposal requires Shareholder
approval, which will be sought at an Extraordinary General Meeting, and is
subject to certain financing conditions. Randgold Resources is today
posting a Circular to its Shareholders relating to the Repurchase. The
Repurchase is intended to be funded out of existing cash resources and the
proceeds of a new facility (the "New Loan Facility").
Definitions used in this announcement shall, unless the context otherwise
requires, have the meanings given in the Circular.
Reasons for the Repurchase
As Shareholders are aware from previous quarterly reports of the Company,
since early 2000, the Randgold Resources Board has considered a number of
options to deal with corporate issues, including a merger between Randgold
Resources and Randgold & Exploration Company Limited ("Randgold &
Exploration") and a return to Shareholders of surplus cash. However,
applications to the South African regulatory authorities to proceed with a
merger have been declined.
Accordingly, your Board has concluded that, given the circumstances, the
most appropriate course of action is to recommend a return of cash on equal
terms to all Shareholders. In considering the amount of cash to be
returned, the Board has taken into account the possible impact on Randgold
Resources' Share price of a forced sale by Randgold & Exploration of its
interest in Randgold Resources' shares to address its indebtedness position.
The Board has also taken into account confirmation given by Randgold &
Exploration that it will apply its share of the proceeds of any return of
cash against its indebtedness. Your Board has decided, in the light of the
Company's projected current and forecast cash flows, that the Company is
able to fund such a return of cash through a combination of the proceeds
from the Company's existing cash resources and the New Loan Facility.
Details of the Repurchase
Resolutions will be put to Shareholders at the Extraordinary General Meeting
seeking their approval for the Repurchase and for the amendment of the Share
Option Scheme Rules. Provided that the Resolutions are approved by
Shareholders, the Company will write to Shareholders asking them to return
their share certificate(s) and/or any other document(s) of title in respect
of their entire holding(s) of Shares to the Registrars for cancellation.
The Repurchase involves the following:
* the mandatory repurchase by the Company of, in aggregate, up to 11 831 915
Randgold Resources Shares for cancellation;
* Shares acquired by means of the Repurchase will be acquired from
Shareholders on a pro rata basis such that the Company will purchase from
each Shareholder 34.08 per cent. of the Shares registered in their name on
the Record Date, expected to be 5pm on 27 September, 2001;
* Randgold Resources Shares will be purchased by the Company at the
Repurchase Price of US$7 per Share; and
* upon completion of the Repurchase which is expected to take place on 28
September, 2001:
- the issued share capital of the Company will be reduced by the total
number of Shares acquired by Randgold Resources;
- the Register will be amended to record the fact that the Company will have
acquired by mandatory repurchase 34.08 per cent. of each Shareholder's
holding of Shares in the Company;
- the Repurchase Price paid by the Company for all shares acquired by means
of the Repurchase will be deposited by the Company into the Escrow Account.
Subject to the passing of the Resolutions and the Repurchase taking place,
each Shareholder will be entitled to receive a new share certificate for the
balance of their holding(s) of Shares.
Full details of the Repurchase, including the terms and conditions on which
it may be made, are set out in
Part II of the Circular to be posted to Shareholders today.
Current trading and outlook
The Syama Mine care and maintenance programme is progressing according to
plan. Staff levels have been reduced, and the remaining US$15 million of
the International Finance Corporation syndicated project finance facility,
together with accrued interest, has been repaid. The Morila Mine continues
to perform well and the Board expects that the nine month period up to and
including 31 December, 2001 will continue to produce results in line with
the operating budget with total cash costs estimated at approximately
US$100/oz. Morila SA has to date accumulated approximately US$44 million in
cash, after taking into account project finance commitments. The
shareholders in Morila SA have agreed upon a dividend policy that provides
for the distribution of available cash on a quarterly basis once the project
finance completion tests have been passed. These completion tests commenced
on 1 June, 2001, and will run until 31 August, 2001. Managed exploration
programmes have continued on the Company's asset portfolio in Mali, C te
d'Ivoire, Burkina Faso and Senegal.
Significant change
As previously announced the Syama Mine is being placed on a care and
maintenance programme. This has resulted in the repayment of US$15 million,
together with accrued interest, in relation to the Syama project financing,
with a consequential reduction in both the Randgold Resources Group's
indebtedness and cash balances in the quarter to 30 June, 2001. In
addition, the close out of the Syama hedge position has resulted in a US$7
million gain which has been recognised in the quarter to 30 June, 2001.
Other than the foregoing, there has been no significant change in the
financial or trading position of the Randgold Resources Group since 31
March, 2001 being the date to which the last published quarterly financial
statements of the Company were prepared.
Extraordinary General Meeting
The Repurchase is conditional, inter alia, upon the approval of
Shareholders. Set out at the back of the Circular is the notice of the
Extraordinary General Meeting of Randgold Resources to be held in the
conference room of The Atlantic Hotel, St. Brelade, Jersey, JE3 8HE, Channel
Islands at 9:00am (United Kingdom time) or so soon thereafter as the annual
general meeting of the Company convened for the same day shall have been
concluded or adjourned on Monday 23 July, 2001, at which Shareholder
approval for the Repurchase and for the amendment of the Share Option Scheme
Rules will be sought.
Expected timetable
Latest date for receipt of proxy
cards from GDR holders 16 July, 2001
Latest time and date for
receipt of Forms of
Proxy 4:30pm on Friday 20 July, 2001
Annual General Meeting 8:30am on Monday 23 July, 2001
Extraordinary General
Meeting 9:00am on Monday 23 July, 2001 #
Letter sent to
Shareholders confirming
decision to proceed
with the Repurchase 17 September, 2001
Record Date
for the Repurchase 5:00pm on 27 September, 2001
Completion Date 8:30am on 28 September, 2001
# To commence at the time fixed or, if later, immediately following the
conclusion or adjournment of the annual general meeting of the Company.
Each of the times and dates in this timetable is subject to change.
Reference to time in this announcement is to United Kingdom time.
If any of the above times and/or dates change, the revised times and/or
dates will be notified to shareholders by announcement through the Company
Announcements Office of the London Stock Exchange.
General
HSBC Investment Bank plc is acting for Randgold Resources and no-one else in
connection with the Repurchase, and will not be responsible to anyone other
than Randgold Resources for providing protections afforded to customers of
HSBC Investment Bank plc, nor for providing advice in relation to the
Repurchase nor any other matter referred to in this announcement or the
Circular.
Full details of the Repurchase including the terms and conditions on which
it may be made are set out in the Circular and the Form of Proxy.
This announcement should be read in conjunction with the Circular and the
Form of Proxy.
HSBC Investment Bank plc has approved this announcement solely for the
purposes of section 57 of the Financial Services Act 1986."
Enquiries :
David Haddon
Tel: +27(11) 309 6043
E-mail : haddond@randgold.co.za
Johannesburg
28 June 2001
For further details please contact:
(Chairman) Roger Kebble +27 (11) 309-6037 or +27 (0) 83-444-3030
(Randgold Resources CEO) Mark Bristow +44 (0) 779-775-2288
RANDGOLD - PRESS RELEASE
RANDGOLD RESOURCES TO PAY OUT UP TO US$82.8 MILLION TO SHAREHOLDERS
Share buyback will fund parent company's bond repayment, clear way for group
restructuring
London, 28 June 2001 - Randgold Resources is planning to return up to
US$82.83 million to its shareholders by way of a compulsory buyback of some
34% of its issued share capital, the company announced today.
Chairman Roger Kebble said the sale last year of 50% of Randgold Resources'
interest in the Morila gold mine in Mali had left the company with a
substantial cash surplus, and its share of the cash flow generated by Morila
was expected to be well in excess of its future working capital
requirements.
"After reviewing all options, our major shareholders have confirmed that
they wish Randgold Resources to continue as a distinctively profiled niche
operator in the gold industry, capable of creating value and of sustaining
superior returns on equity. In line with this strategy, and in keeping with
our tradition of using our balance sheet efficiently, the board has
therefore decided to return value equally to all shareholders through the
proposed buyback," said chief executive Dr Mark Bristow.
The buyback is based on a price of US$7 per share. Randgold Resources shares
are currently trading at US$5.25 on the London stock exchange. Bristow -
who has long contended that the holding structure has created a value gap
between the company's market rating and its net asset value - said the
buyback price was based on a realistic view of the shares' underlying net
asset value.
Since early 2000, Randgold Resources has considered a number of options to
deal with its structural issues, including a merger with Randgold &
Exploration and a return to shareholders of surplus cash. The South African
regulatory authorities have, however, refused to approve a merger.
Bristow said under these circumstances the board concluded that the most
appropriate course of action was to recommend a return of cash on equal
terms to all shareholders. In considering the amount of the payout, the
board took into account the possible impact on Randgold Resources' share
price of a forced sale by Randgold & Exploration of its interest in the
company in order to pay back a $48 million convertible bond which falls due
in September this year. The board has received confirmation from Randgold &
Exploration that it will use its share of the payout to settle the bond.
Randgold Resources' internal funds will not cover the full amount of the
proposed payout, and to supplement these, the company has secured a US$35
million facility from a consortium of banks. The facility consists of a
US$25 million loan repayable over three years and a revolving credit of
US$10 million. Projected dividends from Morila will be enough to service
the debt as well as the company's working capital requirements without its
prejudicing future growth prospects
"The return of cash is a tangible demonstration of Randgold Resources'
ability to create wealth for investors, even at a time of weakness for the
gold industry. Having rewarded our shareholders, we are still strongly
placed to continue with the pursuit of our strategy of hunting down value-
adding resource opportunities, driving them up the value curve, and
realising the added value at the right time. In this context, it's worth
noting again that we have a very substantial portfolio of promising
development and exploration projects," Bristow said.
Bristow said that as a result of the payout, Randgold & Exploration would be
able to settle the bond which had been a major obstacle to the
rationalisation of the company's holding structure. "The way will then be
cleared for the resolution of this issue."
The proposed buyback will be submitted for shareholder approval at an
extraordinary general meeting on 23 July.
Issued on behalf of Randgold Resources by du Plessis Associates.
dPA contact Kathy du Plessis: Tel +27 (11) 728 4701, Fax +27 (11) 728-2547
mobile (0) 83-266-5847, e-mail randgoldresources@dpapr.com
Website: www.randgoldresources.com
