IMPALA PLATINUM HOLDINGS LIMITED - Distribution of22 Jun 2017
IMP IMPCB 201706220035A
Distribution 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)
JSE Share code: IMP
ISIN: ZAE000083648
ADR code: IMPUY
JSE Convertible Bond ISIN: ZAE000175873
JSE Convertible Bond Code: IMPCB
FSE Convertible Bond ISIN: XS0891408469
FSE Convertible Bond Code: [TBC]
(˘Implats÷ or ˘Company÷)


DISTRIBUTION 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÷) of the JSE Limited (˘JSE÷) on 25 May 2017 relating to the
invitation in terms of which Implats offered to purchase, for cash, the 2018 US$ and ZAR
convertible bonds (the ˘2018 Convertible Bonds÷) (the ˘Invitation÷) and the simultaneous
launch of a dual offering of the 2022 US$ and ZAR convertible bonds (collectively the ˘2022
Convertible Bonds÷ or the ˘Convertible Bond Offerings").

Subsequent announcements were released on 26 May 2017 regarding the pricing of the 2022
Convertible Bonds Offering and on 1 June 2017 giving the results of the Invitation and details of
the settlement of the 2018 Convertible Bonds.

The 2022 Convertible Bonds are currently cash-settled instruments. In order for Implats to settle
the 2022 Convertible Bonds through the issue of new Implats ordinary shares (˘Ordinary
Shares÷) for bondholders exercising their conversion rights, a general meeting of Shareholders
will be convened on Monday, 24 July 2017 at 11:00 (the ˘General Meeting÷) for Shareholders
to vote on the following resolutions, which propose to authorise:

- the conversion of the CompanyĂs entire authorised and issued share capital from par value
  shares to no par value shares (the ˘Ordinary Share Conversion÷);
- an increase in the CompanyĂs authorised share capital from 844 008 000 Ordinary Shares to
  944 008 000 Ordinary Shares (the ˘Authorised Share Capital Increase÷);
- the amendment of the CompanyĂs Memorandum of Incorporation (˘MOI÷) to take account of
  the Ordinary Share Conversion and Authorised Share Capital Increase (the ˘MOI
  Amendment÷); and
- the specific authority to issue a maximum of new 175 million Ordinary Shares upon conversion
  of the 2022 Convertible Bonds, including to parties classified as related parties (the ˘Specific
  Authority÷) in terms of the JSE Limited Listings Requirements (the ˘Listings Requirements÷);

(collectively the ˘Proposed Resolutions÷).

2. Use of proceeds and rationale for the issue of 2022 Convertible Bonds

Prior to the Invitation, the full principal amount of the 2018 Convertible Bonds was US$200
million and ZAR2 672 million. The proceeds of the 2022 Convertible Bond offerings were utilised
in the repurchase of ZAR2 429 million 2018 ZAR Convertible Bonds and US$170 million 2018
US$ Convertible Bonds. A total of US$30 million 2018 US$ Convertible Bonds remain in issue
and listed on the Frankfurt Stock Exchange and a total of ZAR243 million 2018 ZAR Convertible
Bonds remain in issue and listed on the JSE. The residual proceeds from the 2022 Convertible
Bond issue will be used to fund the redemption of the remainder of the 2018 Convertible Bonds
in February 2018 and otherwise for general corporate purposes.

3. Rationale for the Proposed Resolutions

A General Meeting will be held in order for Shareholders to approve the Proposed Resolutions.
If Shareholders do not approve the Proposed Resolutions, the 2022 Convertible Bonds will
remain subject to cash settlement.

Cash settlement of the 2022 Convertible Bonds will require significant cash reserves, which
could constrain ImplatsĂ 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 position.

Subject to the approval of the Specific Authority, each 2022 Convertible Bond will be convertible
into one (1) Ordinary Share at an initial conversion price of US$3.8907 and ZAR50.0092 for the
2022 US$ and 2022 ZAR-denominated Convertible Bonds respectively, representing a 32.5%
premium to the reference share price of US$2.9364 and ZAR37.7428, respectively. At the initial
conversion price, the number of Ordinary Shares to be issued upon the conversion of the 2022
US$ Convertible Bonds and the 2022 ZAR Convertible Bonds will be 129 243 832 Ordinary
Shares, representing 17.6% of the number of existing Ordinary Shares in issue (the ˘Specific
Issue÷).

4. Related party transaction

Allan Gray Proprietary Limited (˘Allan Gray÷) is regarded as a related party (˘Related Party÷)
in terms of the Listings Requirements as it held, directly or indirectly, more than a 10%
beneficial interest in the Ordinary Shares on the launch date of the offering of the 2022
Convertible Bonds, being 25 May 2017. Allan Gray participated in the 2022 ZAR Convertible
Bond offering, on the same terms as all other participants, and were allocated 2022 ZAR
Convertible Bonds with a nominal amount of ZAR270 million following a bookbuilding process.

In terms of the Listings Requirements, 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 2022
ZAR Convertible Bonds. Furthermore, any Related Party that was allocated and issued bonds
pursuant to the 2022 Convertible Bond offering is excluded from voting on the Ordinary
Resolution to be proposed at the ShareholdersĂ Meeting.

5. Independent fairness opinion and recommendation

PricewaterhouseCoopers Corporate Finance Proprietary Limited was appointed by the board of
directors of Implats (the ˘Board÷) as the 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 2022 ZAR Convertible Bonds to the Related Party, and is
of the opinion that such terms and conditions are fair to Shareholders on the basis set out in the
fairness opinion included in the circular to Shareholders dated 22 June 2017 (the ˘Circular÷).

The Board has considered the terms and conditions, including the participation of the Related
Party, 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 ExpertĂs opinion is included in Annexure 1 of the
Circular as mentioned below.

6. Pro forma financial effects

The pro forma financial information of Implats as set out in this Circular consists of the pro forma
financial effects, the pro forma consolidated statement of financial position as at 31 December
2016 and the pro forma consolidated statement of profit and loss and comprehensive income for
the six months ended 31 December 2016. The pro forma financial information is the responsibility
of the Directors and has been prepared to illustrate the effects of:
(i) the Invitation and the issue of the 2022 Convertible Bonds; and
(ii) the subsequent approval for the issue of Ordinary Shares upon conversion of the 2022
Convertible Bonds,

assuming that the Invitation, the issue of the 2022 Convertible Bonds and the subsequent
approval for the issue of Ordinary Shares upon conversion of the 2022 Convertible Bonds took
place on 1 July 2016 for purposes of the pro forma consolidated statement of profit and loss and
comprehensive income and on 31 December 2016 for purposes of the pro forma consolidated
statement of financial position.

The 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 Invitation, the issue of the 2022 Convertible Bonds and the
subsequent approval for the issue of Ordinary Shares upon conversion of the 2022 Convertible
Bonds.

The pro forma financial information has been prepared using accounting principles that are
consistent with International Financial Reporting Standards (˘IFRS÷) and the accounting policies
adopted by Implats in the reviewed consolidated interim financial statements for the six months
ended 31 December 2016. The pro forma financial information is presented in accordance with the
Listings Requirements and the Guide on Pro Forma Financial Information issued by the South
African Institute of Chartered Accountants.

The pro forma financial information should be read in conjunction with the Independent
Reporting AccountantĂs assurance report presented in Annexure 2 of the Circular.
The pro forma financial effects illustrate the effects accounting for both the 2022 US$ and
the 2022 ZAR Convertible Bonds as cash-settled instruments versus accounting for the
2022 ZAR Convertible Bonds as a compound instrument. (Refer t o notes 4, 5 and 7 to
the pro forma consolidated statement of financial position below set out in the Circular.)

Pro forma financial effects based on the reviewed consolidated interim financial statements of Implats for the six months
ended 31 December 2016

                                                                              Pro forma        Pro forma
                                                                               Invitation            after
                                                                            and issue of        Invitation
                                                                                    2022              and
                                                                             Convertible     approval for
                                                                                Bonds (2)    the issue of
                                                                                                  Implats    Change (4)
                                                                                               Shares on
                                                                Before(1)                                            %
                                                                                            conversion(3)
 Net asset value per share (cents)                                 7 691           7 682            7 750           0.8
 Tangible net asset value per share (cents)                        6 236           6 226            6 294           0.9
 Basic earnings per share (cents)                                    (52)            (40)            (40)          22.3
 Diluted earnings per share (cents)                                  (52)            (40)            (40)          22.3
 Basic headline earnings per share (cents)                           (65)            (59)            (59)           8.6
 Diluted headline earnings per share                                 (65)            (59)            (59)           8.6
 Weighted average number of Implats Shares in issue                717.5           717.5            717.5
 (millions)
 Weighted average number of diluted Implats Shares in issue        720.7           720.7            785.7           9.0
 (millions)
 Number of Implats Shares in issue (millions)                      718.5           718.5            718.5

Notes and assumptions:

1. Extracted from the reviewed consolidated interim financial statements of Implats for the six
   months ended 31 December 2016.

The Invitation and the issue of the 2022 Convertible Bonds prior to approval for the issue of Implats
Shares on conversion.

2. The ˘Pro forma after Invitation and issue of 2022 Convertible Bonds÷ column reflects the pro
   forma impact of the purchase by Implats of the 2018 Convertible Bonds and the issue of the
   2022 Convertible Bonds prior to shareholder approval for the issue of Implats Shares upon
   conversion of the 2022 Convertible Bonds.

The effects on basic earnings per share, diluted earnings per share, headline earnings per
share, and diluted headline earnings per share are calculated on the basis that the Invitation
and the issue of the 2022 Convertible Bonds took place on 1 July 2016, while the effects on
net asset value per share and net tangible asset value per share are calculated on the basis that
the Invitation and the issue of 2022 Convertible Bonds took place on 31 December 2016 for
purposes of presenting the pro forma financial effects thereof on Implats, based on the
following assumptions:
 - 88.6% of the 2018 ZAR Convertible Bonds and 85.3% of the 2018 US$ Convertible Bonds are
    settled in terms of the Invitation.
- The 2022 Convertible Bonds are cash-settled instruments.
- At initial recognition, the embedded derivative is valued using option pricing methodologies
    with fair value movements recognised through profit and loss.
- The balance of the cash received is classified as a financial liability at amortised cost.

It should be noted that the pro forma financial effects do not include the earnings effect of the
application of the proceeds from the issue of the 2022 Convertible Bonds in excess of the cash
required to settle the 2018 Convertible Bonds.

The Invitation and the issue of the 2022 Convertible Bonds after approval for the issue of Implats
Shares on conversion.

3. The ˘Pro forma after Invitation and approval for the issue of Implats Shares on conversion÷
   column reflects the pro forma impact of the purchase by Implats of the 2018 Convertible
   Bonds and the issue of the 2022 Convertible Bonds and subsequent approval for the issue
   of Implats Shares upon conversion of the 2022 Convertible Bonds.

The effects on basic earnings per share, diluted earnings per share, headline earnings per
share, and diluted headline earnings per share are calculated on the basis that the Invitation,
the issue of the 2022 Convertible Bonds and the subsequent approval for the issue of Implats
Shares upon conversion of the 2022 Convertible Bonds took place on 1 July 2016, while the
effects on net asset value per share and net tangible asset value per share are calculated on
the basis that the Invitation, the issue of the 2022 Convertible Bonds and the subsequent
approval for the issue of Implats Shares upon conversion of the 2022 Convertible Bonds took
place on 31 December 2016 for purposes of presenting the pro forma effects thereof on

Implats, based on the following assumptions:
 - The 2022 ZAR Convertible Bonds constitutes a compound financial instrument of which the
     liability component is initially recognised at amortised cost.
 - The balance of the cash received is classified as equity.
 - The 2022 US$ Convertible Bonds remain cash-settled instruments with the embedded
   derivative valued using option pricing methodologies with fair value movements recognised
   through profit and loss and the liability component recognised and subsequently measured
   at amortised cost.

 The diluted earnings per share and headline diluted earnings per share does not decrease with
 the issue of the approved 130 million Implats Shares, as the impact is antidilutive on the loss
 per share.

 Refer to the pro forma consolidated statement of financial position and the pro forma consolidated
 statement of profit and loss and comprehensive income for the detailed notes and assumptions
 to the pro forma financial effects in the Circular.

 4. The percentage change represents the impact of the Invitation and the issue and
    conversion of the 2022 Convertible Bonds after shareholder approval.

7. Distribution of Circular and notice of general meeting

The Circular containing the notice of the General Meeting and resolutions regarding the
Ordinary Share Conversion, the Authorised Share Capital Increase, the MOI Amendment and
the Specific Issue, as set out above, has been distributed today, Thursday, 22 June 2017 to
Shareholders recorded on the CompanyĂs share register on Thursday, 15 June 2017, subject to
regulatory restrictions in certain jurisdictions. The Circular will also be available on the
CompanyĂs website at www.implats.co.za subject to regulatory restrictions.

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

                                                                                     2017
  Last day to trade in Ordinary Shares in order to be recorded in the     Tuesday, 11 July
  register of Shareholders to vote at the General meeting
  General Meeting record date                                               Friday, 14 July
  Form of proxy for the General Meeting to be received by 11:00             Friday, 21 July
  General Meeting to be held at 11:00 at the CompanyĂs registered          Monday, 24 July
  office, 2 Fricker Road, Illovo, Gauteng, South Africa
  Results of General Meeting released on SENS                              Monday, 24 July
 
Notes:
The dates and times are subject to amendment. Any amendment will be released on SENS and
published in the South African press.

Queries:

Johan Theron
E-mail: johan.theron@implats.co.za
T: +27 (0) 11 731 9013/43
M: +27 (0) 82 809 0166

Alice Lourens
E-mail: alice.lourens@implats.co.za
T: +27 (0) 11 731 9033/43
M: +27 (0) 82 498 3608

22 June 2017
Johannesburg

Sponsor to Implats
Deutsche Securities (SA) Proprietary Limited

Date: 22/06/2017 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.