IMPALA PLATINUM HOLDINGS LIMITED - Specific issue8 Apr 2013
IMP 201304080015A
Specific issue of shares, posting of circular to shareholders and notice of general meeting

Impala Platinum Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1957/001979/06
ISIN: ZAE000083648 JSE share code: IMP
ADR code: IMPUY
(Implats or the Company)

SPECIFIC ISSUE OF SHARES FOR THE PURPOSE OF THE CONVERSION OF CONVERTIBLE BONDS, POSTING OF CIRCULAR TO SHAREHOLDERS
AND NOTICE OF GENERAL MEETING 
                                         
1. Introduction
                                                              
Implats shareholders (Shareholders) are referred to the announcement released on the Stock Exchange News Service
(SENS) on Friday, 15 February 2013 relating to the placement of Implats US$ and ZAR convertible bonds (the Convertible
Bonds) for total gross proceeds of approximately US$200 million and R2 672 million respectively, by way of concurrent
accelerated bookbuild offerings ("the Offering"), as follows: 

- Implats issued 1.0% convertible bonds due February 2018 ("US$ Bonds") in a nominal amount of US$200 million.                                                                                                                           
- Implats issued 5.0% convertible bonds due February 2018 ("ZAR Bonds") in a nominal amount of R2 672 million.                                                               
                                                                                
The Convertible Bonds are currently cash-settled instruments. In order for Implats to settle the Convertible Bonds
through the issue of new Implats ordinary shares (Ordinary Shares), a specific authority is being sought from
Shareholders for the issue of a maximum of 30 000 000 new Ordinary Shares upon conversion of the Convertible Bonds 
(the Proposed Resolution). 
                                                     
2. Application of proceeds and rationale of the Offering
                                    
Implats intends to use the net proceeds from the issue of the Convertible Bonds for general corporate purposes with a
primary focus on funding strategic projects in the Rustenburg Lease Area. The issue of the Convertible Bonds forms part
of Implats strategy to maintain a strong financial position and secure funding given the current global economic
environment and the operating environment in the South African mining sector.

3. Rationale for the Proposed Resolution

A general meeting of Shareholders (the General Meeting) will be held in order for Shareholders to approve the
Proposed Resolution.  If Shareholders do not approve the Proposed Resolution, the Convertible Bonds will remain subject to
cash settlement.

Cash settlement of the Convertible Bonds will require significant cash reserves, which could constrain Implats ability to 
pursue new business opportunities, invest in existing and new projects, fund ongoing business activities, retire or
service outstanding debt and pay dividends, all of which could adversely affect its results of operations and financial
condition.

Subject to the approval of the Proposed Resolution, the Convertible Bonds will be convertible into Ordinary Shares at
an initial conversion price of US$24.13 and R214.90 for the US$- and ZAR-denominated Convertible Bonds respectively,
representing a 35% premium to the reference share price of US$17.8684 and R159.1792, respectively. At the initial
conversion price, the number of Ordinary Shares to be issued upon the conversion of the US$ Convertible Bonds and the ZAR
Convertible Bonds will be 20 724 429 Ordinary Shares, representing 3.28% of the number of existing Ordinary Shares 
(the Specific Issue).

4. Related party transaction

The Public Investment Corporation (SOC) Limited (the PIC) participated in the Offering. The PIC is regarded as a
related party in terms of the Listings Requirements of the JSE Limited (JSE) as it held, directly or indirectly, more
than a 10% beneficial interest in the Ordinary Shares on the date of the Offering being Thursday, 14 February 2013. 
Accordingly, in terms of the Listings Requirmements of the JSE, an independent fairness opinion is required given the
potential issue of Ordinary Shares to a Related Party as a result of the conversion of the ZAR Convertible Bond. Furthermore,
the PIC is excluded from voting on the Proposed Resolution at the General Meeting.

5. Independent fairness opinion 
 
PricewaterhouseCoopers Corporate Finance Proprietary Limited was appointed by the board of directors of Implats (the Board) 
as independent professional expert (the Independent Professional Expert) to determine whether the terms and conditions of the 
Specific Issue are fair to Shareholders. The Independent Professional Expert has considered the terms and conditions, including 
the allocation of ZAR Convertible Bonds to PIC, and is of the opinion that such terms and conditions are fair to Shareholders.  

The Board has considered the terms and conditions, including the participation of PIC, together with the opinion of the Independent 
Professional Expert and is of the opinion that the Specific Issue is fair insofar as Shareholders are concerned.

A copy of the Independent Professional Experts opinion is included in the circular to Shareholders, as mentioned in
paragraph 7 below.

6. Unaudited pro forma financial effects 

The unaudited pro forma financial information of Implats is the responsibility of the directors and has been prepared
to illustrate the effects of the Offering and the Specific Issue, assuming that the Offering and the Specific Issue took
place on 1 July 2012 for purposes of the statement of comprehensive income and on 31 December 2012 for purposes of the
statement of financial position.

The unaudited pro forma financial information has been prepared for illustrative purposes only and may not give a fair
reflection of the financial position, changes in equity, results of operations or cash flows of Implats following the
Offering and the Specific Issue.

It should be noted that the pro forma financial effects do not include the earnings effects of the application of the
proceeds from the Offering, resulting in the apparent dilution in earnings. The pro forma effects of the Specific Issue
illustrates the effects of the charges to income relating to the accounting for both the US$ and the ZAR Convertible
Bonds as cash-settled instruments versus accounting for the ZAR Convertible Bonds as a compound instrument (Refer note 4
below).               
            

                                                                                  Pro forma unaudited
		                                            Pro forma unaudited    after the Specific         
                                                  Before     after the Offering                 Issue      Change (%)                               
                                                 (Note 1)               (Note 2)              (Note 3)       (Note 5)                                                              
  Earnings per share                                                                                                                                                
  Basic (cents)                                      134                    117                   118              1   
  Diluted (cents)                                    134                    116                   118              1   
  Headline earnings per share                                                                                                                                       
  Basic (cents)                                      128                    110                   112              1   
  Diluted (cents)                                    128                    110                   112              1   
  Net asset value per share (cents)                8 374                  8 374                 8 426              1   
  Tangible net asset value per share (cents)       8 207                  8 207                 8 258              1   
  
Notes and assumptions:
1. Extracted from the reviewed consolidated interim financial information of Implats for the six months ended 31 December 2012.

2. Adjusted for the Offering as follows:
2.1 Earnings and headline earnings:
- Assumes that the Convertible Bonds were issued on 1 July 2012.
- Effective interest expense on financial liability of R147 million (before tax at 28%).
- Transaction costs (including the costs of the issue and listings of the Convertible Bonds) amounting to R93 million are 
capitalised and effectively expensed as part of the effective interest (noted above) over the term of the Convertible Bonds.
- It should be noted that for the purposes of these pro forma financial effects, it has been assumed that there are no
movements in foreign exchange rates or in the fair value of the embedded derivative.
- Refer to note 4 below for additional information relating to the accounting for the Offering.
2.2 Net assets and tangible net assets:
- Assumes that the Convertible Bonds were issued on 31 December 2012.
- Increase in financial liabilities of R4.4 billion (being cash received from the Offering net of transaction costs of
R93 million) and assuming an exchange rate of US$1 = ZAR8.91.
- Increase in cash balances of R4.4 billion (being cash received from Offering net of transaction costs of R93 million)
- Refer to note 4 below for additional information relating to the accounting for the Convertible Bonds.

3. Adjusted for the Specific Issue as follows:
3.1 Earnings and headline earnings:
- Assumes that the Specific Issue was effective on 1 July 2012.
- A reduction of R11 million (before tax at 28%) in the effective interest expense on the ZAR Convertible Bonds as a portion 
of this instrument is reclassified to equity.
- For the purpose of calculating diluted earnings and headline earnings per share, the weighted average number of shares in issue 
was increased by 20.7 million shares and the earnings for the period was adjusted to reverse the effective interest on the Convertible 
Bonds.
- It should be noted that for the purposes of these pro forma financial effects, it has been assumed that there are no movements in 
foreign exchange rates or in the fair value of the embedded derivative.
- Refer to note 4 below for additional information relating to the accounting for the Convertible Bonds.
- It should be noted that no dilution has been shown in the diluted earnings per share and diluted headline earnings per share as the 
impact of the conversion into Ordinary Shares is anti-dilutive (refer to the detailed calculations below the pro forma unaudited 
consolidated statement of comprehensive income for more information).
3.2 Net assets and tangible net assets:
- Assumes that the Specific Issue was effective on 31 December 2012.
- A decrease in financial liabilities and a corresponding increase in equity of R313 million, being the reclassification of a portion 
of the ZAR Convertible Bonds between debt and equity (net of transaction costs), based on a fair value calculation of the loan.
- Refer to note 4 below for additional information relating to the accounting for the Convertible Bonds.

4. Accounting policy for the Convertible Bonds:
4.1 Convertible Bonds (prior to the Specific Issue) 
Prior to approval of the Proposed Resolution, the Convertible Bonds are cash-settled instruments. These instruments
are accounted for as two separate instruments as follows:
- a financial liability at amortised cost; and
- an embedded derivative at fair value through profit and loss.
At initial recognition, the embedded derivative is valued using option pricing methodologies. The balance of the cash
received is classified as a financial liability at amortised cost.
The embedded derivative is revalued at every reporting period, with gains or losses being accounted for as part of
other income/expenses in the statement of comprehensive income.
The financial liability increases at every reporting period by an effective interest charge that is accounted for as
part of finance costs in the statement of comprehensive income.
The US$ Convertible Bonds are also subject to the impact of foreign exchange movements between the ZAR and the US$.
Foreign exchange gains or losses will be accounted for as part of finance costs in the statement of comprehensive income.
4.2 Convertible Bonds (after the Specific Issue)
The accounting treatment of the US$ Convertible Bonds will not change after the Specific Issue.
The accounting treatment of the ZAR Convertible Bonds will change in that it will be treated as a compound financial
instrument with two separate instruments as follows:
- a financial liability at amortised cost; and
- an equity portion.
At initial recognition, the financial liability linked to the ZAR Convertible Bonds is valued by calculating the
present value of future cash flows at an effective interest rate for a similar bond without a conversion option. The balance
of the cash received is classified as equity.
The financial liability linked to the ZAR Convertible Bonds increases at every reporting period by an effective
interest charge that is accounted for as part of finance costs in the statement of comprehensive income.
The equity portion linked to the ZAR Convertible Bonds is not revalued or restated after initial recognition.

5. Represents the percentage change between the revised before position, reflecting the pro forma after the issue of
the Convertible Bonds, and the pro forma after the Specific Issue.
                                                             
7. Posting of circular and notice of general meeting

A circular to Shareholders setting out full details of the Proposed Resolution and the Specific Issue, incorporating a
notice convening a General Meeting of Shareholders to consider and approve the Proposed Resolution has been posted to
Shareholders today.

Salient dates and times for the General Meeting are set out below:

            
                                                                                                            2013   
  Last day to trade in Ordinary Shares in order to be recorded in the 
  register of Shareholders to vote at the General Meeting                                       Friday, 19 April   
  General Meeting record date                                                                   Friday, 26 April   
  Form of proxy for the General Meeting to be received by 11:00                                    Monday, 6 May   
  General Meeting to be held at 11:00 at the Companys registered office, 
  2 Fricker Road, Illovo, Gauteng, South Africa                                                   Tuesday, 7 May   
  Results of General Meeting released on SENS                                                     Tuesday, 7 May   
            
Notes:

1. These dates and times are subject to amendment. Any amendment will be released on SENS and published in the South
African press.

Johannesburg
8 April 2013

Sponsor: 
Deutsche Securities (SA) Proprietary Limited

Independent reporting accountants: 
PricewaterhouseCoopers Inc.

Independent professional expert: 
PricewaterhouseCoopers Corporate Finance Proprietary Limited



Date: 08/04/2013 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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