| Mon 4 Nov 2002, 18:11 | | Durban Roodepoort Deep, Limited - Convertible Note |
|
Durban Roodepoort Deep, Limited - Convertible Note Issue ("the Issue")
Durban Roodepoort Deep, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
NASDAQ trading symbol: DROOY
JSE Code: DUR
ISIN: ZAE000015079
("DRD")
Convertible Note Issue ("the Issue")
Introduction
Rand Merchant Bank, a division of FirstRand Bank Limited ("RMB"), Financial
Advisor to DRD in relation to the Issue, and CIBC World Markets ("CIBC"),
Manager to the Issue, are authorised to announce the private placement by DRD of
a principal amount of US$ 60 million of 6% Senior Convertible Notes due 2006
("the Notes"). The private placement is expected to close on 12 November 2002
("the Issue Date"). DRD has also granted CIBC an over-allotment option to
purchase up to an additional principal amount of $6 million of the Notes for a
period of 30 days following closing of the private placement.
The Notes were offered to qualified institutional buyers in the United States
("US"), in reliance on Rule 144A of the Securities Act of 1933, as amended ("the
Securities Act"), and to non-US persons, in reliance on Regulation S of the
Securities Act. The Notes were offered to public shareholders in terms of the
Listing Requirements of the JSE Securities Exchange South Africa ("JSE"). The
Notes have not been registered under the Securities Act and may not be offered
or sold in the US absent of registration under the Securities Act or an
exemption from the registration requirements of the Securities Act and other
applicable securities laws.
This news release does not constitute an offer to sell or the solicitation of an
offer to buy the Notes in the US, nor shall there be any sale of the Notes in
any state in which any such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such
state.
Terms of the Notes
The Notes have been issued at par and bear a coupon of
6% per annum payable semi-annually in arrear in equal installments. The Notes
are convertible into ordinary shares of DRD ("the Shares") at the option of the
Noteholders. The conversion price has been set at 375 US cents per Share,
subject to adjustment in certain events, representing a 21.4% premium to the
closing price of DRD`s American Depository Receipts ("ADRs") on NASDAQ on 1
November 2002. The Notes are senior and unsecured obligations of DRD.
Application will be made for the Shares issuable upon conversion of the Notes to
be listed on the JSE, the Australian Stock Exchange, the London Stock Exchange,
the Brussels Bourse and the Paris Bourse. There is no intention for the Notes
to be listed on any exchange.
DRD is entitled to redeem the Notes at their accreted value plus accrued
interest, if any, subject to certain prescribed conditions being fulfilled,
after the third anniversary of the Issue Date. If not converted or previously
redeemed, the Notes will be repaid at 102.5%
of their principal amount plus accrued interest on the fifth business day
following their maturity date of
12 November 2006.
Use of proceeds
The net proceeds of the Issue will be used by DRD for various purposes
including, but not limited to:
upgrading existing metallurgical plants and expanding mining operations;
mineral exploration and resource evaluation on currently owned mineral rights;
selected acquisitions of gold producing businesses or companies;
capital expenditures designed to reduce administrative and production costs; and
general corporate purposes, including the funding of working capital
requirements.
Fair and Reasonable opinion
RMB has reported to the board of directors of DRD that the terms of the Issue
are fair and reasonable to the shareholders of DRD. A copy of RMB`s opinion in
this regard is available for inspection at the offices of DRD during normal
business hours.
Financial effects of the Issue
The pro-forma financial effects of the Issue are set out in the table below.
Note Before the After the
Issue Issue Change
(cents) cents) (%)
Headline earnings per share 1 -306 -265 +13.6
Fully diluted headline 1
earnings per share -296 -225 +24.1
Net asset value per share 2 247 512 +107.0
Diluted net asset value 3
per share 227 469 +107.0
Notes:
1. The headline earnings per share and fully diluted headline earnings per share
set out in the "Before the Issue" column are based on the audited financial
statements for the financial year ended 30 June 2002 and calculated using a
weighted average shares in issue of 161 664 648 and 167 307 436, respectively.
The headline earnings per share and fully diluted headline earnings per share
set out in the "After the Issue" column are based on the audited financial
statements for the year ended 30 June 2002, adjusted for the assumptions that:
the Notes were issued on 1 July 2001; and
the net proceeds of the Issue earned a pre-tax rate of
return of 15% for the 12-month period ended 30 June
2002.
The fully diluted headline earnings per share set out in the "After the Issue"
column has been based on the assumption that the Notes are converted into 16 000
000 shares, representing approximately 9% of DRD`s current shares in issue,
resulting in a pro-forma fully diluted weighted average shares in issue of 183
307 436.
2. The net asset value per share in the "Before the Issue" column is based on
the audited financial statements for the financial year ended 30 June 2002 and
177 173 485 shares in issue at that date. The net asset value per share set out
in the "After the Issue" column is based on the audited financial statements for
the year ended 30 June 2002, adjusted for the assumption that the Notes were
issued on 30 June 2002.
3. The diluted net asset value per share in the "Before the Issue" column is
based on the audited financial statements for the financial year ended 30 June
2002. The diluted net asset value per share set out in the "After the Issue"
column is based on the audited financial statements for the year ended 30 June
2002, adjusted for the assumption that the Notes were issued and converted into
16 000 000 shares on 30 June 2002, resulting in 193 173 485 shares in issue on a
fully diluted basis at that date.
Registration
DRD has agreed to file a registration statement with the Securities and Exchange
Commission of the United States ("SEC") covering the resale of the Notes and the
resale of the Shares issuable upon conversion of the Notes, as represented by
ADRs trading on NASDAQ, within 90 days of the issue of the Notes. DRD has
agreed to use its reasonable best efforts to cause such registration statement
to become effective within 180 days of the issue of the Notes. Noteholders will
be entitled to liquidated damages if such deadlines are not met.
General
This announcement appears as a matter of record only in accordance with the
Listings Requirements of the JSE and does not constitute an offer to sell or the
solicitation of an offer to acquire any Notes.
Johannesburg
4 November 2002
Lead Manager
CIBC World Markets
Financial Advisor
Rand Merchant Bank
(A division of FirstRand Bank Limited)
Counsel to CIBC
Blake, Cassels & Graydon LLP
United States Counsel
Fulbright & Jaworski LLP
Sponsor
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
South African Counsel
Bowman Gilfillan Inc.
Date: 04/11/2002 05:56:30 PM Produced by the JSE SENS Department
