| Tue 5 Apr 2005, 15:11 | | CAPITAL RAISING AND CAUTIONARY ANNOUNCEMENT |
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DRDGOLD Limited - Capital Raising And Cautionary Announcement
DRDGOLD Limited
(Formerly Durban Roodepoort Deep, Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1895/000926/06)
Share code: DRD
ISIN: ZAE000058723
ARBN number: 086 277 616
NASDAQ trading symbol: DROOY
(`DRDGOLD` or `the company`)
CAPITAL RAISING AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that, on 5 April 2005, DRDGOLD entered into an
underwriting agreement and a subscription agreement with Baker Steel Capital
Managers LLP (`BSCM`) on behalf of its clients (`BSCM clients`), in terms of
which DRDGOLD will raise, in aggregate, R180.4 million through the issue of new
ordinary no par value shares in the stated capital of DRDGOLD (`new DRDGOLD
shares`) to BSCM clients through:
- a claw-back offer; and
- a specific issue of shares for cash, (collectively, `the capital raising`).
BSCM is a specialist investment manager based in London and Sydney, managing
investments in the natural resources, base metals and precious metals sectors.
2. PURPOSE OF THE CAPITAL RAISING
In DRDGOLD`s interim results, prepared in accordance with South African
Statements of Generally Accepted Accounting Practice, released on 24 February
2005, KPMG Inc. (`KPMG`), without qualifying their review opinion, drew
attention to the section in the overview headed `Going Concern`, which indicated
that DRDGOLD and its subsidiaries (`the group`) had incurred significant losses
for the six months to 31 December 2004 and continued to incur losses thereafter
and that, at 31 December 2004, the group`s current liabilities exceeded its
current assets.
The main purpose of the capital raising is to address KPMG`s concerns, and
redress the balance between current assets and current liabilities.
DRDGOLD intends to use the proceeds from the capital raising to:
- provide working capital;
- restructure its operations;
- acquire other synergistic assets in South Africa; and /or
- fund necessary capital expenditure.
3. THE CLAW-BACK OFFER
3.1 Terms of the underwriting agreement
In terms of the underwriting agreement, BSCM clients will pay DRDGOLD R86.9
million against the conditional allotment of 15 804 116 new DRDGOLD shares (`the
claw-back shares`) at a subscription price of R5.50 per claw-back share (`the
offer price`), which is equivalent to the volume-weighted average price of
DRDGOLD shares on the JSE Securities Exchange South Africa (`the JSE`) for the
ten trading days immediately prior to the signing of the underwriting agreement.
The offer price represents an eight percent discount to the volume-weighted
average price of DRDGOLD American Depositary Receipts on NASDAQ for the ten
trading days immediately prior to the signing of the underwriting agreement.
3.2 Terms of the claw-back offer
In recognition of the pre-emptive rights enjoyed by DRDGOLD shareholders over
the claw-back shares, such claw-back shares are to be offered to DRDGOLD
shareholders in terms of a renounceable claw-back offer at the offer price and
in proportion to their existing shareholding in DRDGOLD on the basis of 6 new
DRDGOLD shares per 100 DRDGOLD shares held (`the claw-back offer`). Claw-back
shares not subscribed for by DRDGOLD shareholders or their renouncees in terms
of the claw-back offer will be issued to BSCM clients in terms of the
underwriting agreement. Cash paid by DRDGOLD shareholders will be paid on to the
BSCM clients.
DRDGOLD intends to register the proposed claw-back offer in the United States
with the U.S. Securities and Exchange Commission.
3.3 Conditions precedent
The claw-back offer is conditional upon, inter alia, the receipt of the
necessary regulatory approvals, including that of the JSE.
4. SPECIFIC ISSUE OF SHARES FOR CASH
4.1 Terms of the specific issue of shares for cash
In terms of the subscription agreement, BSCM clients will subscribe for 17
million new DRDGOLD shares at an issue price of R5.50 for an aggregate
consideration of R93.5 million. In terms of the Listings Requirements of the
JSE, BSCM is considered to be a related party and, accordingly, the board of
DRDGOLD has appointed EY Corporate Finance (Proprietary) Limited as independent
expert to provide advice on the terms of the specific issue of shares for cash.
4.2 Conditions precedent
The specific issue of shares for cash is conditional, inter alia, upon the
receipt of the necessary shareholder and regulatory approvals.
5. CIRCULARS AND CAUTIONARY ANNOUNCEMENT
Circulars containing full details of the claw-back offer and the specific issue
of shares for cash will be posted to DRDGOLD shareholders in due course.
Accordingly, shareholders are advised to exercise caution when dealing in the
company`s securities until a further announcement is made.
Johannesburg
5 April 2005
Financial Adviser
QuestCo (Pty) Ltd
Sponsor
Standard Bank
Lawyers to DRDGOLD
Bowman Gilfillan
This release is not an offer of securities for sale in the United States. These
securities may not be offered or sold in the United States absent registration
or an exemption from registration. Any public offering of securities to be made
in the United States will be made by means of a prospectus that may be obtained
from DRDGOLD, which will contain detailed information about DRDGOLD and its
management, as well as financial statements.
Date: 05/04/2005 03:11:03 PM
Produced by the JSE SENS Department
