South AfricaNortham Platinum is proceeding with the implementation of a share offer in line with its R6.6 billion fully funded broad based black economic empowerment (BEE) transaction approved by its shareholders in March 2015.

The Northam Platinum BEE deal, in addition to a previously concluded equity raising of R4.6-billion, will increase the ownership levels by historically disadvantaged South Africans (HDSA) in the company to 35.4%.

Structure of the transaction

Northam outlined that the transaction would see the company issue 112 195 122 new ordinary shares, which represents 22% of the company’s issued share capital (after the issue), to a special purpose vehicle (SPV) representing all the HDSA parties – called Zambezi Platinum – at a subscription price of R41 per share.

This amounts to an aggregate consideration of R4.6 billion

The HDSA participants, through Zambezi Platinum, will acquire an additional 47 710 331 existing ordinary shares from anchor shareholders, the Public Investment Corporation (PIC), also at an acquisition price of R41 per share.

This amounts to a total purchase consideration of R1.9 billion.

A 10-year security of HDSA ownership, which is supported by the Department of Mineral Resources, will ensure that Northam exceeds the minimum Mining Charter equity requirements, and is well-positioned in the sector as a potential HDSA partner for further transactions.

Implementation

The company announced on Friday (10 April 2015) Northam and Zambezi Platinum have agreed to jointly undertake a capital raising to be implemented by way of a renounceable offer by Northam, on behalf of Zambezi Platinum, of 112 195 122 preference shares in the share capital of Zambezi Platinum, which will be listed on the exchange operated by the JSE Limited

The announcement outlined that qualifying shareholders will be granted the renounceable right  to subscribe for 28.21 Zambezi Platinum preference shares for every 100 Northam shares held at the close of business on April 24, 2015.

The Zambezi Platinum preference shares will be issued to offer participants on Monday May 18, 2015.

The offer is fully subscribed for by the PIC and Coronation Asset Management, of which the PIC has committed to subscribe for up to 75 609 756 Zambezi Platinum preference shares, while Coronation has committed to subscribe for up to 36 585 366 Zambezi Platinum preference shares.

Qualifying Shareholders may apply to subscribe for excess offer shares on the same terms and conditions as those applicable to the subscription for Zambezi Platinum preference shares pursuant to the exercise of their rights.

The entire proceeds of the offer will be used by Zambezi Platinum to subscribe for the BEE subscription shares at the BEE subscription amount.

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