| Thu 5 Feb 2004, 17:54 | | PROPOSED RIGHTS OFFER |
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WESTERN AREAS LIMITED - PROPOSED RIGHTS OFFER
WESTERN AREAS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1959/003209/06)
JSE Share code: WAL
ISIN: ZAE000016549
("WAL")
PROPOSED RIGHTS OFFER
Shareholders are advised that the directors of WAL have resolved to proceed
with a renounceable rights offer of ordinary shares to raise R400 million
("the rights offer").
The proceeds of the rights offer will be used by WAL to fund its share of the
completion of the South Deep Twin Shaft Complex ("South Deep"), scheduled for
commissioning by the end of this year. As previously announced by Placer Dome
Inc ("Placer Dome"), the installation of the shaft steelwork will take a year
longer to complete than originally planned owing to the tight tolerances of
the suspended steelwork sections and the necessity to ensure precise
alignment, adherence to design specifications and operating safety criteria.
Currently the directors anticipate that approximately R400 million (assuming a
gold price of R90,000/kg) will be required by WAL in 2004 in order to meet the
Company"s obligations in that regard. The R400 million estimate is based on
the anticipated performance of South Deep, including WAL"s portion of the
South Deep capital expenditure of R260 million for 2004.
A total review of the South Deep project has been initiated jointly with
Placer Dome to ensure the timeous achievement of the South Deep commissioning
and the future mine development plan. The scope of the review specifically
covers the South Deep residual capital programme and the future mine
development programme. In addition, owing to the announced delay in the
commissioning of the South Deep Twin Shafts in October 2003 by Placer Dome, a
review of the Placer Dome Western Areas Joint Venture operating structures and
performance, will be undertaken for the future.
JCI Limited ("JCI") has undertaken to provide a bridging loan of R400 million
to WAL, on the basis that the bridging loan will be repaid out of the funds
raised from the rights offer. The loan will be for a period of up to six
months, pending the rights offer, carrying an interest rate of 1,5% above
prime, and will be unsecured.
JCI, the holder of 35,6% of WAL"s issued ordinary share capital has, subject
to the conditions detailed below, undertaken to follow its rights offer
entitlement, and Allan Gray Ltd acting on behalf of certain clients who own
24,5% of WAL, has undertaken to follow the rights accruing to these clients.
JCI proposes to underwrite the balance of the rights offer shares not
subscribed for by WAL shareholders and/or their renouncees.
The rights offer price will be determined not less than seven days before
the last day to register for the rights offer.
The rights offer is subject to, inter alia:
* the JSE Securities Exchange South Africa granting listings for the shares
and letters of allocation to be issued in terms of the rights offer;
* the Registrar of Companies registering the rights offer circular and the
letter of allocation in terms of section 146A of the Companies Act, 1973
(Act 61 of 1973), as amended;
* WAL shareholders, in general meeting, passing ordinary resolutions to
proceed with the rights offer and placing the unissued shares under the
control of the directors in terms of section 221(2) of the Companies Act,
for the purposes thereof;
* all other regulatory approvals and exemptions as may be required; and
* the underwriting agreement becoming unconditional.
WAL shareholders holding in excess of 50% of WAL"s issued ordinary share
capital have indicated that they will provide irrevocable undertakings to vote
in favour of the ordinary resolutions referred to above.
Further details, including the terms of the rights offer and salient dates
thereof, will be announced in due course.
Johannesburg
5 February 2004
Corporate adviser:
NEWFOUND
Sponsor:
Sasfin
Coporate Finance
A Division of Sasfin Bank Limited
Corporate law Advisers:
TABACKS
Date: 05/02/2004 05:20:03 PM
Produced by the JSE SENS Department
