| Wed 13 Feb 2002, 0:00 | | Black Empowerment Joint Venture With Khumo Bathong |
|
Limited ("Kbh") In Respect Of Crown Gold Recoveries (Proprietary) Limited
("Crown") And Acquisition By Kbh Of A Strategic Equity Stake In Drd
Durban Roodepoort Deep, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
(Share code: DUR)
(ISIN: ZAE 000015079)
(ARBN number 086 277 616)
(NASDAQ Trading Symbol: DROOY)
("DRD" or "the Company")
BLACK EMPOWERMENT JOINT VENTURE WITH KHUMO BATHONG HOLDINGS (PROPRIETARY)
LIMITED ("KBH") IN RESPECT OF CROWN GOLD RECOVERIES (PROPRIETARY) LIMITED
("CROWN") AND ACQUISITION BY KBH OF A STRATEGIC EQUITY STAKE IN DRD
Introduction
The Board of Directors of DRD is pleased to announce that DRD has reached
agreement with KBH, the mining company led by Dr Paseka Ncholo, and The
Industrial Development Corporation of South Africa Limited ("the IDC"),
regarding:
(i) the sale of 60% of the issued share capital of and the cession of
certain claims against Crown in return for a cash consideration of R105 531
000; and
(ii) the subscription by KBH for 4 794 889 new DRD ordinary shares ("the new
DRD shares") for a cash consideration of R68 027 000,
referred to collectively henceforth as "the Transaction".
The IDC's Board of Directors has given its approval to finance
the Transaction.
Rationale for the Transaction
The Transaction establishes an empowerment partnership between DRD and KBH.
DRD has determined synergies between itself and KBH due to the contiguous
nature of their respective operations, Crown and East Rand Proprietary Mines
Limited. In addition, DRD believes that the value of Crown will be enhanced
by this transaction. The Transaction provides KBH with exposure to assets
that generate significant cash flows and, through an equity stake in DRD, to
DRD's other strategic assets. While DRD will continue to manage Crown,
skills transfer to KBH will take place. Dr Ncholo has been invited to join
the DRD Board.
Issue of shares for cash
DRD is to issue to KBH, in terms of a general issue of shares for cash, 4
794 889 new DRD ordinary shares for a cash consideration of R68 027 000. The
issue price of R14.19 represents a 10 percent discount to the 30-day trade-
weighted average price per DRD ordinary share on The JSE Securities Exchange
South Africa at the close of trade on 18 January 2002, being the date agreed
to by DRD, KBH and the IDC.
Conditions precedent to the Transaction
The implementation of the Transaction is subject to, inter alia, the
fulfilment of the following conditions precedent:
(i) DRD, KBH and the IDC concluding formal agreements to give effect to the
Transaction; and
(ii) the requisite approvals of the South African Competition Commission
and other relevant regulatory bodies being obtained.
Financial effects
The financial effects of the Transaction on the basic loss, headline loss,
net asset value and tangible net asset value per DRD share are set out in
the table below.
Before the After the Change
Transaction Transaction (%)
(rands) (rands)
Basic loss per share (Note 1) (1.75) (0.91) 48
Headline loss per share (Note 1) (2.01) (1.63) 19
Net asset value per share (Note 2) 2.84 3.84 35
Tangible net asset value per share
(Note 2) 2.84 3.84 35
Notes:
1. The basic loss and headline loss per DRD share, as set out in the "Before
the Transaction" column of the table, are based upon the audited financial
results of DRD for the year ended 30 June 2001 and 154 529 578 shares in
issue. The basic loss and headline loss per DRD share, as set out in the
"After the Transaction" column of the table, are based upon the assumptions
that the Transaction was effective on 1 July 2000, that the new DRD shares
were issued in full on that date (resulting in a weighted average of 142 555
051 DRD shares in issue) and that the Transaction proceeds earned interest
at the prime interest rate as quoted by The Standard Bank of South Africa
Limited.
2. The net asset value and tangible net asset value per DRD share, as set
out in the "Before the Transaction" column of the table, are based upon the
audited balance sheet of DRD at 30 June 2001. The net asset value and
tangible net asset value per DRD share, as set out in the "After the
Transaction" column of the table, have been based on the assumptions that
the Transaction was effective on 30 June 2001 and that the new DRD shares
were issued in full on that date at an issue price of R14.19 per new DRD
share, resulting in a total of 159 324 467 DRD shares in issue at 30 June
2001.
Application of the cash proceeds of the Transaction
DRD intends to use the cash proceeds to further enhance its balance sheet
and to accelerate its hedge buyback programme.
Johannesburg
13 February 2002
Corporate adviser Attorneys Sponsor
The Corner House Bowman Gilfillan Standard Corporate
(Pty) Limited Inc & Merchant Bank
(Registration (Registration number (A division of The
number 1978/01915/21) Standard Bank of
1997/08185/07 South Africa
Limited)
(Registration number
1962/000738/06)
