| Thu 6 Apr 2006, 13:07 | | DRDGOLD Limited - Completion of Emperor transactio |
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DRD
DRDD
DRDGOLD Limited - Completion of Emperor transaction and issue of shares for cash
under general authority
DRDGOLD 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")
CONSOLIDATION OF THE OFFSHORE OPERATIONS OF DRDGOLD INTO EMPEROR MINES LIMITED
("EMPEROR") AND GENERAL ISSUE OF SHARES FOR CASH
1. COMPLETION OF THE RESTRUCTURING AND THE EMPEROR TRANSACTION
Shareholders are referred to the announcements published on SENS on 17 November
2005, 13 January 2006 and 17 February 2006 regarding:
- the restructuring of DRDGOLD"s offshore operations, which required DRDGOLD
shareholder approval in terms of section 228 of the South African Companies Act,
1973 (Act 61 of 1973) as amended,("the restructuring"); and
- the sale by DRDGOLD"s wholly owned subsidiary, DRD (Offshore) Limited ("DRD
Offshore"), of its shares in DRD (Isle of Man) Limited ("DRD Isle of Man") to
Emperor ("the Emperor transaction").
DRDGOLD shareholders are advised that all conditions precedent to the
restructuring and the Emperor transaction have been fulfilled, including the
establishment by the Emperor group of companies of a US$42 million debt facility
with Australia and New Zealand Banking Group Limited.
In terms of the Emperor transaction, the purchase consideration payable by
Emperor to DRDGOLD was subject to certain completion adjustments to reflect the
change in the capital positions of the respective companies.
DRDGOLD and Emperor have agreed that, as at 24 March 2006, Emperor will be
liable to pay DRD Offshore an additional US$7.33 million. Further, Emperor is
liable to refund to DRDGOLD any additional transaction costs payable by DRDGOLD
in terms of the Emperor transaction, which additional transaction costs are not
expected to be significant.
The purchase price adjustment results, for the most part, from DRDGOLD having
advanced working capital to the offshore operations over the period between
signature of agreement and completion of the Emperor transaction.
2. ISSUES OF SHARES FOR CASH UNDER A GENERAL AUTHORITY
On 10 December 2004 and 3 March 2005, respectively, DRDGOLD and DRD (Isle of
Man) ("the Group") entered into two separate loan agreements with financial
institutions (collectively, "the agreements"), in terms of which loan facilities
of R100 million and US$50 million ("the facilities") were provided to the Group.
The agreements provide that the financial institutions may call for the
repayment of any drawn down portion of the facilities and that DRDGOLD may elect
to repay the facilities either in cash or through an issue of new DRDGOLD shares
or a combination thereof.
In the current financial year, the Group has cumulatively drawn down R163
million of the facilities. DRDGOLD has settled this drawn down portion of the
facilities through the issue of, in aggregate, 17 815 945 new DRDGOLD shares
("the new shares") under its general authority to issue shares for cash, which
general authority was granted to the directors of DRDGOLD at the company"s
annual general meetings held on Friday, 26 November 2004 and Friday, 4 November
2005, respectively.
The new shares were issued at an average price of R9.20 per new share, which
represents an average discount of 0.7% to the 30-day trade-weighted average
price per DRDGOLD share calculated from the date of issue of the new shares in
respect of each draw down.
Funds advanced under the agreements have been utilised to fund capital
expenditure directed towards improving infrastructure, to fund group
restructuring costs, including the restructuring of the company"s offshore
operations, and for general working capital purposes.
As detailed in paragraph 1 above, US$7.33 million (approximately R44.2 million)
of the funds advanced to the offshore operations will be paid as a purchase
price adjustment by Emperor to DRD Offshore.
3. PRO FORMA FINANCIAL EFFECTS
The Directors are responsible for the preparation of the pro forma financial
effects set out below, which have been prepared for illustrative purposes only,
to assist shareholders to assess the impact of the issues of the new shares
("the issues") on the earnings, headline earnings, net asset value and tangible
net asset value per DRDGOLD share. The material assumptions are set out in the
notes following the table. These pro forma financial effects have been
disclosed in terms of the Listings Requirements of the JSE Limited and do not
constitute a representation of the future financial position, changes in equity,
results of operations or cash flows of DRDGOLD.
Before After the
the issues the issues Change
(cents) (cents) (%)
Earnings per share (200) (1) (187) (2) 6.5%
Headline earnings per share (114) (1) (107) (2) 6.1%
Net asset value per share 210 (3) 250 (4) 19.0%
Tangible net asset value
per share 210 (3) 250 (4) 19.0%
Notes:
1. The earnings and headline earnings per share, as set out in the "Before the
issues" column of the table are based on the audited financial results of
DRDGOLD for the twelve months ended 30 June 2005 and 257 695 796 weighted
average number of shares in issue.
2. The earnings per share and headline earnings per share, as set out in the
"After the issues" column of the table, are based on 275 511 741 weighted
average number of shares in issue and the assumptions that:
- the issues were effective on 1 July 2004; and
- the new shares were issued at an average price of R9.20 per new share.
3. The net asset value per share and tangible net asset value per share as set
out in the "Before the issues" column of the table are based on the audited
balance sheet of DRDGOLD at 30 June 2005 and 296 206 048 shares in issue.
4. The net asset value per share and tangible net asset value per share as set
out in the "After the issues" column of the table are based on a total of 314
021 993 shares in issue and the assumption that the new shares were issued on 30
June 2005 at an average issue price of R9.20 per new share.
The pro forma financial information included in this announcement does not
purport to be in compliance with Regulation S-X of the rules and regulations of
the US Securities Exchange Commission.
Johannesburg
6 April 2006
Corporate Adviser
QuestCo
Sponsor
Standard Bank
Date: 06/04/2006 01:07:37 PM Produced by the JSE SENS Department
