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PALABORA MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1956/002134/06)
Share code: PAM
ISIN: ZAE000005245
("the company")
ANNOUNCEMENT OF A RIGHTS OFFER
1. Introduction
Shareholders are referred to previous communications relating to the financing
requirements of the company and are advised that the board of directors has
resolved to raise additional capital by way of a rights offer of floating rate
partially subordinated unsecured redeemable convertible debentures ("convertible
debentures") to shareholders of the company ("the rights offer"). Subject to
South African Reserve Bank and other regulatory approvals, the rights offer will
be underwritten by the company"s major beneficial shareholder, Rio Tinto plc,
and sub-underwritten by Anglo American plc, through their nominated
subsidiaries.
2. The purpose of the rights offer
The purpose of the rights offer is to raise approximately R849 million (before
expenses), which will be utilised to service existing debt commitments as well
as to allow completion of the underground project and other fixed capital
commitments, including enhancements to various plants.
3. Salient dates relating to the rights offer
The last day to trade in order to participate in the rights offer will be
Friday, 15 August 2003.
Shareholders who are recorded in the company"s share register at the close of
business on Friday, 22 August 2003, will be entitled to participate in the
rights offer.
4. Salient features of the rights offer
Number of convertible 849 465
debentures to be offered:
Ratio of entitlement: 3 convertible debentures for
every 100 ordinary shares
held on the record date
Rights offer price per R1 000
convertible debenture:
Interest payments: Semi annual interest payments
in arrears at an interest
rate of six month JIBAR plus
5%
Conversion: Convertible into 33,33333
ordinary shares per
convertible debenture after
the second anniversary of the
issue date but before the
final maturity date at the
option of the debenture
holder provided that no
redemption notice has been
issued.
Redemption: Redeemable at par in whole
(to the extent that
conversion has not taken
place) but not in part at the
option of the company at any
time after the first
anniversary of issue. The
company shall fully redeem at
par all outstanding
convertible debentures on the
third anniversary of the
issue.
5. Conditions precedent
The rights offer is conditional upon, inter alia:
- the granting by the JSE Securities Exchange South Africa of listings for the
letters of allocation pertaining to the convertible debentures and the
convertible debentures to be issued pursuant to the rights offer;
- the registration by the Registrar of Companies of all documents required in
respect of the rights offer; and
- the underwriting agreement becoming irrevocable.
6. Further announcement
A further announcement setting out the finalisation information relating to the
rights offer will be published on or about Friday, 8 August 2003.
For further information please contact the Managing Director, David Sadler, on
(015) 780 2802.
Phalaborwa
29 July 2003
Corporate adviser and sponsor Merchant bank
Barnard Jacobs Mellet Standard Corporate and Merchant
Corporate Finance (Pty) Bank
Limited
Legal adviser Independent reporting accountants
Webber Wentzel Bowens PricewaterhouseCoopers Inc.
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