Questions and Answers about the Rights Issue. November 2015

Transcription

1 Questions and Answers about the Rights Issue November 2015

2 Disclaimer This presentation, which is personal to the recipient, has been issued by Lonmin plc ( Lonmin ). This presentation includes forward-looking statements. All statements other than statements of historical fact included in this announcement, including without limitation those regarding Lonmin's plans, objectives and expected performance, are forward-looking statements. Lonmin has based these forward-looking statements on its current expectations and projections about future events, including numerous assumptions regarding its present and future business strategies, operations, and the environment in which it will operate in the future. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "could", "would", "expect", "intend", "estimate", "anticipate", "believe", "plan", "aim" or "continue", or, in each case, their negative, or other variations or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors related to Lonmin, including, among other factors: (1) material adverse changes in economic conditions generally or in relevant markets or industries in particular; (2) fluctuations in demand and pricing in the mineral resource industry and fluctuations in exchange rates; (3) future regulatory and legislative actions and conditions affecting Lonmin's operating areas; (4) obtaining and retaining skilled workers and key executives; and (5) acts of war and terrorism. By their nature, forward-looking statements involve risks, uncertainties and assumptions and many relate to factors which are beyond Lonmin's control, such as future market conditions and the behaviour of other market participants. Actual results may differ materially from those expressed in forward-looking statements. Given these risks, uncertainties, and assumptions, you are cautioned not to put undue reliance on any forward-looking statements. In addition, the inclusion of such forward-looking statements should under no circumstances be regarded as a representation by Lonmin that Lonmin will achieve any results set out in such statements or that the underlying assumptions used will in fact be the case. This presentation speaks as at the date hereof and, other than as required by applicable law or the applicable rules of any exchange on which Lonmin's securities may be listed, Lonmin has no intention or obligation to update or revise any forward-looking statements or other information included in this presentation after the publication of this presentation. 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This communication is for distribution only to, and directed only at: (i) persons who are existing members of Lonmin; (ii) persons who are entitled whether conditionally or unconditionally, to become a member of Lonmin; or (iii) persons who are entitled whether conditionally or unconditionally to have transferred to them title to shares issued by Lonmin (all together, "Existing Members"), in terms of Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended. Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. This communication must not be acted on or relied by persons who are not Existing Members. This announcement is not an offer to sell or a solicitation of any offer to buy any Lonmin securities ("Securities") in the United States, Australia, Canada, Japan or in any other jurisdiction where such offer or sale would be unlawful or to any person to whom it would be unlawful to make such offer or solicitation. The Securities have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), or with any securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, taken up, exercised, renounced or otherwise delivered, distributed or transferred, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any State or other jurisdiction of the United States. No public offering of the Securities is being made in the United States. No statement in this presentation is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per share for the current or future financial years would necessarily match or exceed the historical published earnings per share. Prices and values of, and income from, shares may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser. By accepting this document, the recipient agrees unconditionally to be bound by the foregoing limitations. 2

3 Summary Fully underwritten Rights Issue to strengthen Lonmin s financial position New shares in Lonmin will be offered to existing Lonmin shareholders at a discount to the market price on announcement Rights Issue is conditional on all resolutions being passed at the General Meeting The General Meeting will be held at the Lincoln Centre, 18 Lincoln s Inn Fields, London WC2A 3ED, United Kingdom at 9:30 a.m. (London time) on 19 November 2015 A prospectus is available on the Company s website which shareholders and potential investors should read before making any investment decision 3

4 Selected Questions and Answers about the Rights Issue 1. What is a Rights Issue? A rights issue is a way for companies to raise money by giving their existing shareholders the right to subscribe for further shares in proportion to their existing holdings, usually at a discount to the market price as at the date of announcement 2. Is the Rights Issue underwritten? Yes. The Rights Issue is underwritten by HSBC, JP Morgan Cazenove and Standard Bank 3. Why is Lonmin undertaking the Rights Issue? As described more fully in Part I Letter from the Chairman of Lonmin of the Prospectus, the Directors are confident in the long-term potential of the Lonmin Group, with its high-quality asset base and long-term mining rights, and continue to believe in the medium to longterm fundamentals of the Platinum Group Metals ( PGM ) industry. The Lonmin Group s primary focus continues to be on preserving and enhancing value for all shareholders Despite actions to reduce costs, improve productivity and minimise capital expenditure, the Lonmin Group s profitability and cash flows are under pressure and remain highly geared to the PGM pricing environment and Rand/US dollar exchange rate movements. Against this background the Directors have concluded that raising equity now, by way of the Rights Issue, is in the best interests of the Company and all stakeholders The Rights Issue is expected to raise approximately US$407 million (in gross proceeds). The Rights Issue and amended bank facilities, taken together, are expected to strengthen the Lonmin Group s financial position and are expected result in immediate and long-term benefits to the Lonmin Group, and in particular are expected to: enable the Lonmin Group to execute and deliver on the new business plan, thereby improving the Lonmin Group s ability to withstand potential adverse movements in external factors, specifically a continuation of the weak PGM pricing environment, and repositioning the Lonmin Group on the South African PGM industry cost curve; and strengthen the balance sheet, allow the Lonmin Group to meet its obligations and commitments as they fall due and reduce the Lonmin Group s borrowings Shareholders should consider the effect of the proposed 100:1 share consolidation on their shareholding and whether they should participate in the Rights Issue. Holders of fewer than 3 Lonmin shares on 17 November 2015 will find that they would only hold a fractional share following consolidation, which would be sold with the proceeds paid to the shareholder. Therefore, if you hold fewer than 3 Lonmin shares on 17 November 2015, it is recommended that you do not seek to participate in the Rights Issue For further information shareholders should refer to Part II information In Relation To The Rights Issue of the Prospectus issued on 9 th November

5 Selected Questions and Answers about the Rights Issue (cont.) 4. What are the terms of the Rights Issue? The Rights Issue will be on the basis of: 46 new Lonmin Shares for every 1 existing Lonmin Share Shareholders will have the right to buy 46 new shares for every share they hold at close of business on 17 November 2015 The new Lonmin shares ( New Shares ) will, when issued and fully paid, be ordinary shares ranking equally in all respects with the Lonmin shares currently in issue, including the right to receive all future dividends and other distributions declared, made, paid or declared after the date of their issue The Rights Issue, which is conditional on, amongst other things, shareholder approval, will result in the issue of 26,997,717,400 New Shares (representing per cent. of the issued share capital of Lonmin following completion of the Rights Issue) 5. What price will the New Shares be issued at? New Shares will be issued at a price of 1.00 pence each, in respect of qualifying shareholders who hold shares on the LSE or, in the case of qualifying shareholders who hold shares on the JSE, ZAR each The UK Issue Price of 1.00 pence per New Share represents: a per cent. discount to the closing price of an existing share; and a per cent. discount to the theoretical ex-rights price of an existing share, in each case based on the closing middle-market price of pence on the London Stock Exchange on 6 November 2015, the last business day prior to the publication of the Prospectus The SA Issue Price of ZAR0.214 per New Share represents: a per cent. discount to the closing price of an existing share; and a per cent. discount to the theoretical ex-rights price of an existing share, in each case based on the closing price of ZAR3.74 on the JSE on 6 November 2015, the last business day prior to the publication of the Prospectus The purchase price will be payable at the time shareholders accept the offer Shareholders should consider the effect of the proposed 100:1 share consolidation on their shareholding and whether they should participate in the Rights Issue. Holders of fewer than 3 Lonmin shares on 17 November 2015 will find that they would only hold a fractional share following consolidation, which would be sold with the proceeds paid to the shareholder. Therefore, if you hold fewer than 3 Lonmin shares on 17 November 2015, it is recommended that you do not seek to participate in the Rights Issue For further information shareholders should refer to Part II information In Relation To The Rights Issue of the Prospectus issued on 9 th November

6 What are my choices and what should I do with the Provisional Allotment Letter? (Shareholders who hold shares listed on the LSE) a) If you want to take up all of your rights If you want to take up all of the rights to acquire the new Lonmin shares to which you are entitled ( Rights ), all you need to do is send the Provisional Allotment Letter together with your cheque or banker s draft to Lonmin s registrar, Equiniti (for details, see page 108 of the Prospectus) This must be received by no later than 11:00 a.m. (London time) on 10 December 2015 Existing Shares Full amount payable (GBP) Illustrative worked examples Intermediate Shares (post Rights Issue, pre consolidation) Shares post consolidation Fractional entitlement 3 (1.38) (45.54) 4, (69.00) 7, ,000 (460.00) 47, ,521 (21,399.66) 2,186,487 21, (b) If you do not want to take up any of your Rights If you do not want to take up your Rights, you do not need to do anything If you do not return your Provisional Allotment Letter subscribing for new Lonmin shares by 11:00 a.m. (London time) on 10 December 2015, the Company has made arrangements under which the underwriters will endeavour to find investors to take up your Rights and the Rights of others who have not taken them up If the underwriters do find investors who agree to pay a premium above the UK Issue Price (or its equivalent in Rand at the time of the sale), you will be sent a cheque for your share of the amount of that premium provided that this is 5.00 or more (after related expenses of procuring those investors) 3 Proceeds from sale of rights dependent ,000 on market value at the 1, ,521 time 46, If the underwriters cannot find investors who agree to pay a premium over the UK Issue Price you will not receive any payment, and any amounts of less than 5.00 will be retained for the benefit of Lonmin Please note that there is no guarantee that purchasers will be found for any rights you do not take up 6

7 What are my choices and what should I do with the Provisional Allotment Letter? (Shareholders who hold shares listed on the LSE) c) If you want to take up some but not all of your rights If you want to take up some but not all of your rights and wish to sell some or all of those you do not want to take up, see page 109 of the Prospectus for details of the actions you should take d) If you want to sell all of your rights If you want to sell all of your rights, see page 109 of the Prospectus for details of the actions you should take 7

8 What are my choices and what should I do with my rights? (Shareholders who hold shares listed on the JSE) a) If you want to take up all of your rights If you hold certificated shares and you want to take up all of the rights to subscribe for the new shares to which you are entitled, all you need to do is complete the Form of Instruction and send it together with your cheque or banker s draft, to Lonmin s South African registrar, Link (for details, see page 110 of the Prospectus). This must be done by no later than 12:00 p.m. (Johannesburg time) on 10 December 2015 If you hold uncertificated shares and you want to take up all of your rights to subscribe for new shares, you must contact your broker or CSDP to arrange for your rights to be taken up and for payment to be made on your behalf. This must be done in accordance with the Custody Agreement between you and your CSDP or broker Existing Shares Full amount payable (ZAR) Illustrative worked examples Intermediate Shares (post Rights Issue, pre consolidation) Shares post consolidation Fractional entitlement 3 (29.53) (974.56) 4, (1,476.60) 7, ,000 (9,844.00) 47, ,521 (457,952.72) 2,186,487 21, (b) If you do not want to take up any of your rights If you do not want to take up any of your rights, you do not need to do anything The Company has made arrangements under which the underwriters will endeavour to find investors to take up your rights and the rights of others who have not taken them up If the underwriters do find investors who agree to pay a premium above the UK Issue Price (or its equivalent in Rand at the time of the sale), you will be sent a cheque for your share of the amount of that premium provided that this is the Rand equivalent of 5.00 or more (on spot rate on the date of payment; less the related expenses of procuring those investors) 3 Proceeds from sale of rights dependent ,000 on market value at the 1, ,521 time 46, If the underwriters cannot find investors who agree to pay a premium over the UK Issue Price you will not receive any payment, and any amounts of less than the Rand equivalent of 5.00 will be retained for the benefit of Lonmin (on spot rate on the date of payment, less expenses) Please note that there is no guarantee that purchasers will be found for any rights you do not take up 8

9 What are my choices and what should I do with my rights? (Shareholders who hold shares listed on the JSE) c) If you want to take up some but not all of your rights If you want to take up some but not all of your rights and wish to sell or renounce those rights which you do not want to take up, see page 111 of the Prospectus for details of the actions you should take d) If you want to sell all of your rights If you want to sell all of your rights, see page 111 of the Prospectus for details of the actions you should take e) If you want renounce all of your rights If you want to renounce all of your rights, see page 112 of the Prospectus for details of the actions you should take 9

10 Selected Questions and Answers about the General Meeting and shareholder vote Why is a General Meeting being held? To implement the Rights Issue, the company requires a number of resolutions to be approved by shareholders. Details of those resolutions are set on the next slide, on pages 94 and 95 of the Prospectus, and in the Chairman s letter of the circular mailed to shareholders on 2 November 2015 The Rights Issue is conditional on, among other things, the passing of all of the resolutions. If any of the resolutions are not approved at the General Meeting, the Company will be unable to complete the rights issue When and where is the General Meeting being held? A notice convening the General Meeting to be held at the Lincoln Centre, 18 Lincoln s Inn Fields, London WC2A 3ED, United Kingdom at 9:30 a.m. (London time) on 19 November 2015 was sent to Shareholders together with the explanatory circular A copy of the circular to shareholders is available at 10

11 Resolutions to be proposed at the General Meeting The Rights Issue is conditional on, among other things, the passing of all of the resolutions. If any of the resolutions are not approved at the General Meeting, the Company will be unable to complete the Rights Issue and the amended bank facilities will not come into effect Resolution % of vote required to pass 1. To approve the sub-division and consolidation 50% + 1 vote 2. To amend the Company s Articles of Association to facilitate the proposed sub-division 75% 3. To approve the placing of shares to the Bapo ba Mogale Traditional Community 50% + 1 vote 4. To authorise Lonmin s directors to allot shares for the purposes of the Rights Issue 50% + 1 vote 5. To disapply pre-emption rights 75% 11