Impala Platinum : Implats - launch of convertible bonds

Implats - launch of convertible bonds

25 May 2017

Implats announces the launch of a dual offering of up to R2 600 million unsecured convertible bonds due 2022 (the '2022 ZAR Convertible Bonds') and up to USD300 million unsecured convertible bonds due 2022 (the '2022 UDS Convertible Bonds' and together with the 2022 ZAR Convertible Bonds, the '2022 Convertible Bonds' or the '2022 Convertible Bond Offerings').

Implats intends to use the net proceeds from the 2022 Convertible Bond Offerings to refinance the 2018 Convertible Bonds (as defined below) thereby significantly enhancing Implats' short-to- medium term liquidity in line with its strategy to maintain a strong financial position.

The 2018 Convertible Bonds
*Outstanding USD200 million 1% convertible bonds with a maturity date of 21 February 2018 (ISIN: XS0891408469/Common Code:089140846 (the '2018 USD Convertible Bonds'); and
*Outstanding R2 672 million 5% convertible bonds with a maturity date of 21 February 2018 (ISIN: ZAE000175873) (the '2018 ZAR Convertible Bonds' and together with the 2018 USD Convertible Bonds, the '2018 Convertible Bonds').

In conjunction with the 2022 Convertible Bond Offerings, Implats is inviting the holders of the 2018 Convertible Bonds to sell to Implats for cash any and all of their 2018 Convertible Bonds (the 'Invitation'). The purchase price per USD200 000 principal amount of 2018 USD Convertible Bonds offered and accepted for purchase will be USD200 000. The purchase price per R10 000 minimum denomination of 2018 ZAR Convertible Bonds offered and accepted for purchase will be R10 000. Implats will also make payment of an amount in respect of accrued and unpaid interest in respect of the 2018 Convertible Bonds accepted for purchase, as further described in the Invitation Term Sheet (as defined below).

The acceptance for purchase of the 2018 Convertible Bonds validly tendered pursuant to the Invitation is subject, without limitation, to, and conditional upon, the issuance by Implats of the 2022 Convertible Bonds in a combined aggregate principal amount equivalent to approximately USD400 million, as discussed below.

The 2022 Convertible Bond Offerings
The 2022 Convertible Bonds are expected to be issued and repayable at par. The 2022 ZAR Convertible Bonds are expected to bear interest at an annual rate of between 6.00% and 6.75% and the 2022 USD Convertible Bonds are expected to bear interest at an annual rate of between 2.875% and 3.625%. The 2022 Convertible Bonds, subject to the approval of Implats' shareholders, will be convertible into ordinary shares of the Company (the 'Ordinary Shares') in accordance with, and subject to, the terms and conditions of the 2022 Convertible Bonds. Absent such approval, holders of the 2022 Convertible Bonds will on conversion receive a cash amount equal to the value of the underlying Ordinary Shares. The respective initial conversion prices are expected to be set at a premium of between 30% and 35% above the reference share price, being the volume weighted average price of an Ordinary Share on the Johannesburg Stock Exchange ('JSE') between launch and pricing.

Each of the 2022 ZAR Convertible Bonds and the 2022 USD Convertible Bonds will permit Implats to call such bonds at par plus accrued interest at any time on or after the fourth (4th) anniversary +21 days of the settlement date, if (i) in the case of the 2022 USD Convertible Bonds, the aggregate value of the underlying Ordinary Shares for a specified period of time is 130% or more of the principal amount of the relevant bonds or (ii) in the case of the 2022 ZAR Convertible Bonds, if the volume weighted average price of an Ordinary Share exceeds 130% of the conversion price for a specified period of time.

The aggregate issue size of the 2022 Convertible Bond Offerings is not expected to exceed approximately USD450 million, with the Ordinary Shares underlying the 2022 Convertible Bond Offering not expected to exceed approximately 15% of the Ordinary Shares currently
outstanding.

The 2022 Convertible Bonds will be offered through an accelerated book-building process to qualifying institutional investors only. The final terms of the 2022 Convertible Bonds will be announced after pricing, which is expected to be Friday, 25 May 2017.

In 2016, Implats put in place four bilateral bank facilities with aggregate capacity of R4.5 billion, which each mature in June 2021. These facilities were structured to allow Implats to be able to refinance the 2018 Convertible Bonds and are not currently drawn. As originally structured, these facilities would not be able to be drawn following the issue of the 2022 Convertible Bonds, however, in line with the strategy to retain a robust liquidity position, Implats is seeking to retain all or a portion of these facilities. Discussions are therefore well underway with relationship banks, with R4.0 billion of these facilities already amended to allow them to remain in place following the issue of the 2022 Convertible Bonds.

It is expected that settlement of the 2022 Convertible Bonds will take place on or about 6 June 2017. Implats intends to apply for admission of the 2022 ZAR Convertible Bonds for trading on the Main Board of the JSE and the 2022 USD Convertible Bonds for trading on a European stock exchange, in each case within 90 days following settlement of the 2022 Convertible Bonds.

Following settlement, Implats shareholders will be requested to grant specific authority for the board of Implats to issue Ordinary Shares to satisfy conversion of the 2022 Convertible Bonds and for certain amendments to be made to the Company's Memorandum of Incorporation to implement the foregoing. If the shareholder authority has not been granted by 30 November 2017, Implats may, by giving notice no later than 15 dealing days after such date, elect to redeem all but not some only of the 2022 Convertible Bonds at the greater of (i) 102% of the principal amount of the 2022 Convertible Bonds and (ii) 102% of the fair bond value of the 2022 Convertible Bonds, as defined in the terms and conditions of the 2022 Convertible Bonds.

The Invitation
The Invitation is being made upon the terms and subject to the conditions set forth in the invitation term sheet dated 25 May 2017 (the 'Invitation Term Sheet'). Copies of the Invitation Term Sheet may be obtained from the relevant Tender Agent, whose contact details are set out at the end of this announcement. Bondholders are requested to read the Invitation Term Sheet in full before making any decision with respect to the Invitation. Bondholders may wish to obtain independent professional advice before making any such decision. Capitalised terms used but not otherwise defined in this announcement have the meaning ascribed to them in the Invitation Term Sheet.

The Invitation is expected to expire at 4.00 p.m. (London time) on 31 May 2017 (the 'Expiration Deadline'). Holders of 2018 Convertible Bonds must validly submit tender instructions prior to the Expiration Deadline in order for such Bonds to be eligible for purchase. Tender instructions may be submitted (i) in relation to the 2018 USD Convertible Bonds, to the relevant Tender Agent via Euroclear Bank SA/NV or Clearstream Banking, S.A. and (ii) in relation to the 2018 ZAR Convertible Bonds, to the relevant Tender Agent and, if such bonds are held in uncertificated form, to participants of Strate (Pty) Ltd in addition to submission to the Tender Agent. Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold 2018 Convertible Bonds whether such intermediary would require receipt of instructions to participate in or revoke their instructions to participate in the Invitation before the Expiration Deadline.

Tender instructions will be irrevocable, except in the limited circumstances described in the Invitation Term Sheet. Any 2018 Convertible Bonds that are not successfully offered for purchase pursuant to the Invitation will remain outstanding, subject to the Company's right to redeem such bonds at their principal amount, at any time, if 85% or more of the applicable aggregate principal amount of such bonds originally issued shall have been previously redeemed, exchanged or purchased. Any 2018 Convertible Bonds repurchased pursuant to the Invitation will be cancelled. Subject to applicable law and as provided in the Invitation Term Sheet, the Company may, in its sole discretion, extend, reopen, amend, waive any condition of, or terminate the Invitation at any time. Details of any such extension, reopening, amendment, waiver or termination will be announced as soon as reasonably practicable after the relevant decision is made and as required by applicable law.

The acceptance for purchase of the 2018 Convertible Bonds validly tendered pursuant to the Invitation is subject, without limitation, to, and conditional upon, the issuance by Implats of the 2022 Convertible Bonds in a combined aggregate principal amount equivalent to approximately USD400 million. Please see 'The 2022 Convertible Bond Offerings' above.