IMP
IMPO
IMP - Implats - Joint Announcement
Impala Platinum Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1957/001979/06)
ISIN: ZAE000083648
JSE Share Code : IMP
LSE Share Code : IPLA
ADR Code : IMPUY
("Implats" or "the Company")
Royal Bafokeng Nation
("RBN")
Royal Bafokeng Holdings (Pty) Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/006906/07)
("RBH")
JOINT ANNOUNCEMENT REGARDING THE FULFILLMENT OF THE CONDITIONS PRECEDENT
RELATING TO THE EMPOWERMENT TRANSACTION WITH THE ROYAL BAFOKENG NATION AND
THE FINALISATION OF THE FAIR MARKET VALUE OF THE RBN ROYALTY
1. The Royalty Transaction
Shareholders of Implats approved the empowerment transaction with the RBN
on 29 November 2006 (the "Royalty Transaction"), conditional on:
- the signature by the Minister of Land Affairs of the Notarial Royalty
Payment Agreement; and
- the enactment of the necessary legislation to allow for the tax
deductibility, on a life-of-mine basis, of the pre-payment of all
royalties due and payable to the RBN for the 31-year period from 1
July 2007 ("Royalties").
The Minister of Land Affairs signed the Notarial Royalty Payment Agreement
on 28 February 2007. Based on the Draft Taxation Laws Amendment Bill, 2007,
released for comment on 27 February 2007, and representations made by
National Treasury, Implats has agreed to waive the second condition
precedent.
The Royalty Transaction has therefore become unconditional and will be
implemented in accordance with its terms. Accordingly, 75 115 200 new
Implats shares will be issued to Royal Bafokeng Impala Investment Holding
Company (Pty) Limited ("RBIIH") and Royal Bafokeng Tholo Investment Holding
Company (Pty) Limited ("RBTIH") on 6 March 2007 (the "Effective Date").
These shares will rank for the dividend declared by the Company on 15
February 2007, being the interim dividend of 275 cents per Implats share,
in respect of the half-year ended 31 December 2006.
2. Fair Market Value
International Financial Reporting Standards require that the Royalties be
reflected at fair market value as at the Effective Date ("FMV"). In light
of the improved market conditions in the platinum sector, as reflected in
the Implats share price, and in order to align the transaction documents
and the tax and accounting treatment with the FMV, the parties to the
Royalty Transaction have agreed to amend the Royalty Transaction to reflect
the FMV of the Royalties at R12 483 million (the "Revised Transaction").
3. The Revised Transaction
3.1 Key terms
The Revised Transaction provides that:
- Impala Platinum Limited ("Impala") will pay an additional amount of
approximately R1 898 million, being the difference between the FMV of
the Royalties of R12 483 million at the Effective Date and the R10 585
million determined at the time the Royalty Transaction was entered
into; and
- The RBN, through RBTIH and RBIIH, will subscribe for four shares in
Implats at an aggregate subscription price of R1 898 million (the
"Adjustment Shares").
If the Revised Transaction is approved by shareholders of Implats, the RBN
group will have subscribed for 75 115 204 Implats shares for an amount of
R12 483 million ("the Royalty Payment"). In the event that the Revised
Transaction is not approved by Implats shareholders, the Royalty
Transaction will remain unaffected and RBTIH and RBIIH will continue to
hold 75 115 200 Implats shares, for a subscription amount of R10 585
million.
The Adjustment Shares will be subject to the same terms as the shares
issued under the Royalty Transaction, and will be issued five days after
the fulfillment of the condition precedent set out in paragraph 3.2 below.
3.2 Condition precedent
The Revised Transaction is subject to approval by the shareholders of
Implats by 30 April 2007, or such later date as the Parties may agree in
writing.
4. Implats General Meeting
Implats will seek shareholder approval for the specific issue of the
Adjustment Shares and the Revised Transaction contemplated in the
agreements between the parties. RBH, RBTIH and RBIIH are existing
shareholders in Implats and, because they have an interest in the Revised
Transaction, will not vote on any resolutions at the general meeting.
5. Effects of the Revised Transaction
5.1 Effects on shareholding
RBH, RBIIH and RBTIH would, in terms of the Royalty Transaction, hold 13.4%
of the fully diluted issued ordinary share capital of Implats. If the
Revised Transaction is implemented, these parties will still hold 13.4% of
the fully diluted issued ordinary share capital of Implats.
5.2 Financial effects of the Revised Transaction
The unaudited pro-forma financial effects of the Revised Transaction for
the six months ended 31 December 2006 are set out in the table below to
assist Implats` ordinary shareholders to assess the impact of the Revised
Transaction on Implats` basic earnings per share, headline earnings per
share, fully diluted earnings and headline earnings per share, net asset
value per share and tangible net asset value per share, based on the
unaudited results for the six months ended 31 December 2006.
These unaudited pro-forma financial effects have been presented for
illustrative purposes only and may not give a fair reflection of Implats`
financial position nor the effect on future earnings post the
implementation of the Revised Transaction. The directors of Implats are
responsible for the preparation of the unaudited pro-forma financial
effects.
Before (1) After (2) % change
Basic EPS (cents) 824 482 (42%)
Diluted EPS (cents) 821 481 (41%)
Basic HEPS (cents) 824 482 (42%)
Diluted HEPS (cents) 821 481 (41%)
NAV per share (cents) 3,247 4,813 51%
NTAV per share (cents) 3,235 2,768 (13%)
1. Extracted from the unaudited Implats consolidated interim
results for the six months ended 31 December 2006.
2. Earnings and headline earnings per share after the Revised
Transaction have been determined on a pro forma basis
assuming that the Revised Transaction was implemented on 1
July 2006, as follows:
- Eliminating the annual royalty charge under the Notarial
Mineral Lease between the RBN and Impala amounting to
R825,6 million before tax and R586,2 million after tax
at 29%;
- Amortising the Royalty Payment of R12,5 billion using
the units of production basis (assuming a straight line
charge over 31 years for the purposes of the pro-forma
financial effects), amounting to R201,3 million before
tax and R143,0 million after tax at 29% for the six
month period. For statutory financial statement
purposes, this amortisation will commence in financial
year 2008, being the first year covered by the Royalty
Payment. For purposes of the financial effects, the
accounting and tax treatments are considered aligned. If
not, deferred tax will be recognized on the difference;
- Charging an amount of R1,8 billion, being the difference
between the value of the new ordinary shares issued
(R14,3 billion) and the value of the Royalty Payment
(R12,5 billion), as a BEE compensation charge;
- Creating an expense of R87,5 million (the present value
of the estimated future payments) for the liability
relating to the commitment to contribute up to R170
million up to 30 June 2017 to the Bafokeng Impala
Development Trust;
- Charging R5,4 million, representing the impact of
unwinding the discounted community development liability
of R87.5 million noted above;
- Charging R8 million, representing the estimated
transaction costs before tax (assumed that these costs
will be tax deductible); and
- Issuing 75 115 204 new ordinary shares, increasing the
weighted average number of shares in issue during the
year to 602,967 million for basic earnings and headline
earnings per share and to 604,334 million for diluted
earnings and diluted headline earnings per share.
Net asset and tangible net asset value per share after the
Revised Transaction have been determined assuming that the
Revised Transaction was implemented on 31 December 2006, as
follows:
- Raising a royalty asset of R12,5 billion, being the
agreed value of the Royalties;
- Raising additional share capital at R14,3 billion, being
the issue of 75 115 204 new ordinary shares at a price
of R190 per share;
- Charging an amount of R1,8 billion to retained income,
being the difference between the value of the new
ordinary shares issued (R14,3 billion) and the value of
the Royalty Payment (R12,5 billion), as a BEE
compensation charge;
- Raising a R87,5 million community development liability
relating to the commitment with regards to the Bafokeng
Impala Development Trust (present value of estimated
future payments) with a corresponding "community
development expense" to retained earnings;
- Reducing "cash and equivalents" by R8 million and
charging retained earnings with R5,7 million after tax,
representing the estimated transaction costs;
- Issuing 75 115 204 new ordinary shares, increasing the
total number of ordinary shares in issue to 613,270
million; and
- Treating the royalty asset of R12,5 billion as an
intangible asset for the purposes of calculating the
tangible net asset value per share.
6. Circular to shareholders
A circular setting out full details of the Revised Transaction, including a
notice of general meeting, will be posted to shareholders by the end of
March.
Johannesburg
6 March 2007
Financial adviser and transaction sponsor to Implats
Morgan Stanley South Africa (Pty) Limited
Legal and tax adviser to Implats
Deneys Reitz
Reporting accountants to Implats
PricewaterhouseCoopers Advisory Services (Pty) Limited
Corporate Tax Advisor to Implats
Dianne Dobson
Sponsor to Implats
Deutsche Securities (SA) (Pty) Limited
Legal adviser to RBH
Bell Dewar Hall
Date: 06/03/2007 17:00:00 Produced by the JSE SENS Department. |