ANGLOGOLD LIMITED ASHANTI GOLDFIELDS COMPANY LIMITED
(Registration number 1944/017354/06) (Registration number 7094, ARBN
074370862)
(Incorporated in the Republic of
South Africa) (Incorporated in Ghana)
ISIN : ZAE000043485 ISIN : GH0000000029
JSE Share Code : ANG GSE Share Code : AGC
("AngloGold") ("Ashanti")
This announcement does not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale or distribution of securities in
any jurisdiction in which such offer, sale or distribution is not permitted
5 August 2003
PROPOSED MERGER OF ANGLOGOLD LIMITED AND ASHANTI GOLDFIELDS COMPANY LIMITED
1. Introduction
Further to the announcements made by AngloGold and Ashanti on 16 May 2003 and
13 June 2003, the boards of directors of AngloGold and Ashanti are pleased to
announce today that they have agreed the terms of a recommended merger of the
two companies (the "Merger") to create a growth focused, leading global gold
producer. AngloGold and Ashanti have therefore entered into a transaction
agreement ("Transaction Agreement") to implement the Merger. The combined group
will be known as AngloGold Ashanti Limited and will trade as Ashanti AngloGold
in Ghana.
The combined group will have the largest reserve base of any gold company, a
significant and well diversified production base, a highly attractive
development and exploration portfolio and the financial and technical resources
to maximise organic growth from the existing asset base as well as to
capitalise on further acquisition opportunities.
Under the terms of the Merger:
Each holder of an Ashanti ordinary share ("Ashanti Share") and each holder of
an Ashanti Global Depositary Security ("Ashanti GDS") (together the "Ashanti
Shareholders") will be entitled to elect to receive, either:
0.26 AngloGold ordinary shares ("AngloGold Shares"); or
0.26 AngloGold American Depositary Shares ("AngloGold ADSs")
for each Ashanti Share or Ashanti GDS ("Exchange Ratio").
In addition, Ashanti Shareholders resident in Ghana will have the option of
receiving AngloGold Ghanaian Depositary Shares ("AngloGold GhDSs"), 100 of
which will represent one AngloGold Share, at an exchange ratio of 26 AngloGold
GhDSs per Ashanti Share or Ashanti GDS held by any such Ghanaian residents.
Based on the closing market price of AngloGold ADSs on the New York Stock
Exchange on 1 August 2003, the last practicable trading day prior to this
announcement, of US$32.15, the Merger values each Ashanti Share (and each
Ashanti GDS) at US$8.36 and amounts to aggregate consideration for Ashanti's
issued ordinary shares of US$1,089 million. This represents a premium of
approximately 4% to the closing market price of Ashanti GDSs on the New York
Stock Exchange on 1 August 2003, the last practicable trading day prior to this
announcement, of US$8.00 and, on the bases of closing prices for AngloGold ADSs
and Ashanti GDSs on the New York Stock Exchange on 15 May 2003, the day prior
to the announcements of discussions, of US$30.63 and US$7.10 respectively, a
premium of 12%. Based on the average closing prices of Ashanti GDSs and
AngloGold ADSs on the New York Stock Exchange over the 30 trading days up to
and including 15 May 2003 these terms represent a premium of 34%.
On completion of the Merger and based on the issued ordinary share capital of
each company, existing holders of AngloGold Shares and AngloGold ADSs
(together, the "AngloGold Shareholders") will own approximately 87% and
existing Ashanti Shareholders will own approximately 13% of the combined group.
The board of directors of Ashanti ("Ashanti Board") has approved the Merger.
Lonmin Plc, which owns 27.6% of Ashanti's issued ordinary share capital, has
agreed to support the Merger.
As described in paragraph 4 below, the Merger is conditional on the receipt of
certain approvals and undertakings from the Government of Ghana. A full list of
the conditions to the obligations of AngloGold and/or Ashanti to consummate the
Merger is set out in Appendix I.
2. Terms and Structure of the Merger
The Merger will be effected by means of a scheme of arrangement between Ashanti
and its shareholders (the "Scheme") under Section 231 of the Ghana Companies
Code and take account of the required disclosure provisions of the Ghana Stock
Exchange. Under the terms of the Merger:
* Each holder of an Ashanti Share resident in Ghana will be entitled to elect
to receive, in exchange therefor, either:
* 0.26 AngloGold Shares;
* 0.26 AngloGold ADSs; or
* 26 AngloGold GhDSs, 100 of which will represent one AngloGold Share
If no election is made, such holder will be deemed to have elected to receive
its scheme consideration in the form of AngloGold GhDSs
* Each holder of an Ashanti Share resident outside Ghana (other than the
depositary for the Ashanti GDSs and holders of Ashanti Shares resident in
the United States) will be entitled to elect to receive in exchange
therefor, either:
- 0.26 AngloGold Shares; or
- 0.26 AngloGold ADSs
If no election is made, such holder will be deemed to have elected to receive
its scheme consideration in the form of AngloGold Shares
* Each holder of an Ashanti GDS or of an Ashanti Share resident in the United
States will be entitled to elect to receive in exchange therefor, either:
- 0.26 AngloGold Shares; or
- 0.26 AngloGold ADSs
If no election is made, such holder will be deemed to have elected to receive
its scheme consideration in the form of AngloGold ADSs
* Ashanti Shareholders will be entitled to receive all dividends declared by
AngloGold with a registration date after the completion of the Merger.
However, the Merger will not be implemented prior to the registration date
for the payment of AngloGold's final dividend. AngloGold has agreed to use
reasonable endeavours to set a registration date for the 2003 final
dividend so as not to delay the consummation of the Merger. Consequently,
Ashanti shareholders will not be entitled to receive AngloGold's 2003
interim or final dividends
* No fractional AngloGold Shares or AngloGold ADSs will be issued in respect
of any fractional entitlement to an AngloGold Share or AngloGold ADS
("fractional interest"). Each holder of a fractional interest resident in
Ghana will have the right to elect to receive either (i) cash (in US
dollars) or (ii) AngloGold GhDSs in lieu of such fractional interest.
Holders of a fractional interest resident outside Ghana will be paid an
amount in cash (in US dollars) in lieu of such fractional interest. The
amount of cash (in US dollars) paid in lieu of such fractional interest
will be equal to the product obtained by multiplying (i) the fractional
interest to which such holder (after taking into account all fractional
interests then held by such holder) would otherwise be entitled by (ii) the
volume-weighted average of the per share closing price on the New York
Stock Exchange of AngloGold ADSs during the ten consecutive trading days
ending on (and including) the trading day immediately preceding the
effective time of the Scheme
3. Background to and key benefits of the Merger
The Merger will allow the shareholders of AngloGold and Ashanti to benefit from
the establishment of a leading global gold producer, enhancing the strengths of
both groups. The Merger will produce a combined group with the following
attributes:
* Growth/Upside potential - an enhanced production profile is expected from
existing brownfields opportunities and a strong exploration and land
holding portfolio
- AngloGold's proven ability in the development of deep level projects will
maximise the opportunity for the development of deep level mining at Obuasi
("Obuasi Deeps"), where a scoping study has been undertaken to review the
mine's potential down to 100 Level as well as alternative production rates,
infrastructure options and operating and capital cost projections
* A dedicated project team will undertake a feasibility study regarding
Obuasi Deeps with anticipated exploration expenditure of US$44 million over
the next five years. Including this amount, the total capital expenditure
for Obuasi Deeps is estimated to be US$570 million in real terms over the
expected life of mine
* The combined group also intends to invest an additional US$110 million in
real terms over the next five years on underground equipment,
infrastructure, environmental and planning systems for the existing Obuasi
Mine. This amount is in addition to capital expenditure already planned by
Ashanti. AngloGold management anticipates that these initiatives will
improve underground working conditions and mine planning thereby increasing
efficiencies with the objective of reducing anticipated cash operating
costs at Obuasi by US$20 per ounce in real terms over the next five years
- The combined group intends to accelerate exploration programmes, particularly
at Obuasi
- The combined group will have extensive land positions in some of the most
prospective regions in the world
* Synergies - the combination will generate tangible synergy benefits with
approximately US$15 million per annum, before transaction expenses,
expected from the first full year after completion of the Merger
- Reduced financing costs
- Reduced administrative and procurement costs
- Consolidation of Geita ownership
- Breadth of technical capabilities to ensure the optimal development of
organic growth opportunities
* Scale - the combined group will have the production base, ore reserves and
financial resources to generate future value
- #1 in reserves - 93.2 million ounces of attributable proven and probable
reserves as at the end of 2002 (adjusted for the sales of Amapari and Jerritt
Canyon), a 31% increase in AngloGold's current reserve base
* Production - re-enforces AngloGold's position as one of the world's largest
gold producers with 2002 pro forma attributable gold production of 7.3
million ounces (adjusted for the sale of Jerritt Canyon), a 27% increase on
AngloGold's attributable production level
- US$1.0 billion EBITDA (earnings before interest, tax, depreciation,
amortisation and before unrealised non-hedge derivatives) on a 2002 pro forma
basis (International Financial Reporting Standards, ("IFRS"))
* Operating strength - the combined group will have a portfolio of long-life,
low-cost assets and different ore body types in the key gold producing
regions
- Cash operating costs - pro forma cash operating costs (including royalties)
of US$220 per ounce based on unaudited results for the six months to 30 June
2003
- Long-life assets - six operations in five countries with combined reserves of
45.1 million ounces have current life of mine plans of 15 years or longer
- Diversification - well diversified asset portfolio comprising a balance of
open-pit and underground production from a total of 24 operations distributed
across 11 countries in the principal gold producing regions of the world
* Investment appeal - the combined group will have the growth potential,
size, liquidity and dividend yield to enhance appeal to the investment
community
- Increased size - pro forma market capitalisation of approximately US$8.3
billion (based on AngloGold's closing price on 1 August 2003, the last
practicable trading day prior to this announcement, and the issued ordinary
share capital of each company), meriting greater attention from major global
generalist and specialist investment institutions
- Share trading liquidity - increased liquidity, particularly in North America,
which represents some two thirds of AngloGold and Ashanti's combined share
turnover
* Hedging - The combined hedge book would have had a net delta of 14.7
million ounces, as at 30 June 2003
- The combined group will continue AngloGold's and Ashanti's record of active
hedge management and will follow the same pattern of hedge reduction.
Delivering into maturing contracts over the balance of this year will likely
see the delta hedge position reduce to 13.5 million ounces assuming market
rates as at 30 June 2003
- As at 30 June 2003, AngloGold's and Ashanti's hedge books had negative
marked-to-market valuations of US$179.3 million and US$147.6 million
respectively, including in each case, each company's 50% interest in the
US$78.8 million negative marked-to-market value of the Geita hedge book
4. Major shareholders
An undertaking to support the Merger has been received from Lonmin Plc, the
largest shareholder of Ashanti, in relation to its shareholding in the issued
ordinary share capital of approximately 27.6%. Lonmin Plc can withdraw its
support for the Merger only if the Ashanti Board publicly announces the
withdrawal of its recommendation or if the Transaction Agreement is terminated.
Morgan Stanley is acting as financial adviser to Lonmin Plc.
The Government of Ghana, holder of 16.9% of Ashanti's issued ordinary share
capital, is currently considering the terms of the transaction and has
appointed a consortium of advisers, led by Soci�t� G�n�rale, in order to assist
it in this process. The Merger is conditional on receiving undertakings from
the Government of Ghana to vote in favour of and support the Merger and is also
subject to receiving certain regulatory and other approvals and undertakings,
that have been requested by AngloGold and Ashanti from the Government of Ghana.
This includes an agreement to use reasonable endeavours to extend, in 2004, the
Obuasi lease for an additional 30 years from 2024 and to enter into a stability
agreement to ensure that the Ghanaian operations are not adversely affected by
changes in royalties, taxes and custom duties for a specified period of time.
The Transaction Agreement will terminate if these conditions are not satisfied
(or waived by AngloGold) on, or before, 30 September 2003 or such later date as
may be agreed by Ashanti and AngloGold.
5. Conditions and other key terms of the Transaction Agreement
In addition to the conditions relating to the Government of Ghana outlined
above, completion of the Merger is conditional on, amongst other things, the
approval of the Merger by Ashanti Shareholders, receipt of other regulatory
approvals, third party consents and the confirmation of the Scheme by the High
Court of Ghana prior to 31 March 2004. A complete list of the conditions to the
obligations of AngloGold and/or Ashanti to consummate the Merger is set forth
in Appendix I.
Upon the implementation of the Scheme, Ashanti Capital (Second) Limited, a
subsidiary of Ashanti, will redeem all its issued and outstanding Mandatorily
Exchangeable Notes ("MENs") for US$75,000,000 plus accrued and unpaid interest
thereon in cash. The MENs are held entirely by Lonmin Plc.
The board of AngloGold has agreed to recommend a change of name of the combined
group to AngloGold Ashanti Limited and AngloGold has agreed to convene an
extraordinary general meeting to present a special resolution to this effect.
Anglo American plc, which currently owns 51.4% of AngloGold, has confirmed that
it will vote in favour of such resolution.
6. Information on AngloGold
AngloGold, headquartered in Johannesburg, South Africa, is a global gold
producer with 19 operations in eight countries, on four continents, and has
extensive and focused exploration activities in 11 countries.
AngloGold Shares are listed and traded on the JSE Securities Exchange South
Africa, the Australian Stock Exchange in the form of "CHESS" depositary
interests, the London Stock Exchange and Euronext Paris and are quoted on
Euronext Brussels in the form of International Depositary Receipts. AngloGold
ADSs are listed and traded on the New York Stock Exchange.
Based on the closing market price of US$32.15 per AngloGold ADS on 1 August
2003, the last practicable trading day prior to this announcement, AngloGold
had a market capitalisation of approximately US$7.2 billion.
For the six months to 30 June 2003 AngloGold reported (in accordance with
IFRS):
* Gold production of 2.8 million ounces (attributable)
* Cash operating costs of US$217 per ounce (attributable)
* Revenue of US$977 million
* Headline earnings before unrealised non-hedge derivatives of US$140 million
* Headline earnings per share before unrealised non-hedge derivatives of
US$0.63
* An interim dividend per share of US$0.51 has been declared in 2003. In 2002
dividends per share of US$1.46 were declared
7. Information on Ashanti
Ashanti, headquartered in Accra, Ghana, is engaged in the mining and processing
of gold ores and the exploration and development of gold properties in four
African countries - Ghana, Guinea, Tanzania and Zimbabwe. Ashanti also has an
extensive exploration programme in Africa.
Ashanti Shares are listed on the Ghana Stock Exchange and the London Stock
Exchange. Although Ashanti has a primary listing on the London Stock Exchange,
it is not subject to the City Code on Takeovers and Mergers. Ashanti GDSs are
listed and traded on the New York Stock Exchange and on the London Stock
Exchange and Ashanti Shares and Ashanti Zimbabwe Depositary Receipts are listed
on the Zimbabwe Stock Exchange.
Based on the closing trading price of US$8.00 per Ashanti GDS on 1 August 2003,
the last practicable trading day prior to this announcement, Ashanti has a
market capitalisation of approximately US$1.0 billion.
For the six months to 30 June 2003 Ashanti reported (in accordance with UK
GAAP):
* Gold production of 0.7 million ounces (attributable)
* Cash operating costs (including royalties) of US$232 per ounce
(attributable)
* Revenue of US$257 million
* Pre-exceptional net earnings of US$14.6 million
* Pre-exceptional net earnings per share of US$0.11
* Net assets of US$478 million
Ashanti did not pay any dividend for the year ended 31 December 2002, neither
has it announced any dividends in respect of its interim earnings in 2003.
8. Financial effects of the Merger
The financial effects of the Merger on AngloGold Shareholders are set out
below. These financial effects have been determined from unaudited consolidated
financial information for the combined group assuming that the Merger was
implemented on 1 January 2003 for the purposes of the income statement and on
30 June 2003 for the purposes of the balance sheet.
AngloGold believes that the pro forma historical information is not necessarily
indicative of the future financial performance of the combined group. The
Merger is expected to be accretive to headline earnings per share before
unrealised non-hedge derivative adjustments for AngloGold Shareholders from
completion of the Merger. However, for the six months ended 30 June 2003, as a
result of Ashanti having experienced an anticipated lower production profile
and higher cash operating costs over this period, which are not anticipated to
continue in the long term, the Merger is dilutive to AngloGold on this basis,
despite being accretive to headline and basic earnings per share. The Merger is
also expected to be accretive to cash flow per share from three years after
completion of the Merger following the expenditure of a significant proportion
of the proposed additional capital investment, at the existing Obuasi Mine in
particular, as well as the redemption on completion of the US$75 million
Mandatorily Exchangeable Notes held by Lonmin Plc and the payment of
transaction expenses in the first year following completion of the Merger. This
should not be interpreted to mean that earnings per share and cash flow per
share in the financial year in which the Merger becomes effective or in any
subsequent period, will necessarily be greater than those for any relevant
preceding financial period.
The pro forma historical financial effects of the Merger on AngloGold
Shareholders are as follows:
For the six months ended 30 June Before the After the Percentage
2003 Merger Merger change
(US cps) (US cps) (%)
and as at 30 June 2003
Net asset value per share 1 728 1,060 46
Net tangible asset value per share 549 808 47
1
EBITDA per share 2 152 156 3
Headline earnings per share before 63 54 (14)
unrealised non-hedge derivatives 2
Headline earnings per share 2 62 73 18
Basic earnings per share 2 55 68 24
Net debt to total capital employed 18.6% 17.2%
NOTES:
1. Net asset and net tangible asset value per share refers to shareholders'
equity and has been determined at 30 June 2003 assuming 222,785,154 AngloGold
Shares in issue before the Merger and 257,309,569 AngloGold Shares in issue
after the Merger (the 34,524,415 AngloGold Shares issued in the Merger assumes
that the 2,496,826 outstanding Ashanti warrants are exercised and the resulting
Ashanti Shares together with the 130,289,386 Ashanti Shares currently in issue
are exchanged at the Exchange Ratio. All outstanding options over Ashanti
Shares are assumed to be cancelled for cash)
2. The pro forma consolidated income statements for the six months ended 30
June 2003 and balance sheets at 30 June 2003 have been compiled from:
* the historical unaudited consolidated income statements of AngloGold for
the six months ended 30 June 2003 and the historical unaudited consolidated
balance sheets of AngloGold at 30 June 2003, prepared in accordance with
IFRS; and
* the historical unaudited consolidated income statements of Ashanti for the
six months ended 30 June 2003 and the historical unaudited consolidated
balance sheets of Ashanti at 30 June 2003, prepared in accordance with UK
GAAP, adjusted to an IFRS basis by incorporating the differences between
the two accounting bases
For the six months ended 30 June 2003, unaudited pro forma EBITDA, headline
earnings, headline earnings before unrealised non-hedge derivatives and basic
earnings per ordinary share have been calculated based on the weighted average
number of AngloGold Shares in issue of 222,737,513 for the six months ended 30
June 2003 adjusted to reflect the issuance of 34,524,415 AngloGold Shares in
the Merger. Accordingly, the adjusted pro forma weighted average number of
AngloGold Shares in issue for the six months ended 30 June 2003 is 257,261,928
3. The financial effects calculations have been based on publicly available
information only and for this reason may not incorporate all the necessary
adjustments
4. The financial effects have been calculated on the basis of an AngloGold
share price of US$32 a share
5. The financial effects, based upon the historical unaudited consolidated
income statements of AngloGold for the six months ended 30 June 2003 and the
historical unaudited consolidated balance sheets of AngloGold at 30 June 2003
have not been adjusted for the sale of Amapari or Jerritt Canyon
9. US and UK tax consequences
The exchange of Ashanti Shares or Ashanti GDSs for AngloGold Shares or
AngloGold ADSs pursuant to the Merger currently is expected to be a taxable
transaction for US federal income tax purposes. For the purposes of the UK
taxation of chargeable gains, in general, it is considered that the exchange of
Ashanti Shares or Ashanti GDSs for AngloGold Shares or AngloGold ADSs pursuant
to the Merger should not be treated as giving rise to a disposal of Ashanti
Shares or Ashanti GDSs, except in certain limited circumstances, and generally
no UK stamp duty or stamp duty reserve tax should be payable by holders of
Ashanti Shares or Ashanti GDSs on the exchange of Ashanti Shares or Ashanti
GDSs for AngloGold Shares or AngloGold ADSs pursuant to the Merger. Holders of
Ashanti Shares or Ashanti GDSs are urged to consult their own tax advisers in
determining the consequences of the Merger to such holders under US, UK or
other applicable law. Further disclosure in respect of the US and UK tax
consequences of the Merger will be made in due course.
10. Directors, management and employees
Following completion of the Merger, Russell Edey, currently Chairman of
AngloGold, will be Chairman of the combined group. Sam Jonah, in addition to
joining the Board, will play a leading role in the executive management of the
enlarged company in the position of President. His 34 years in the gold mining
industry in both an operating and a leadership capacity position him well to
help guide the further development of the new company and the industry
particularly in Africa. In this new position, Mr. Jonah will share
responsibility with the CEO Bobby Godsell for strategy formulation, the
identification and development of new business opportunities and managing the
company's relationships with governments, shareholders and other stakeholders.
In the enlarged company, Sam will join a five person Executive Committee,
chaired by Bobby Godsell. In addition, two other Ghanaian directors to be
nominated by Ashanti will become non-executive directors of the combined group.
The board of directors of AngloGold and the AngloGold executive team will
otherwise continue in their current roles.
Following completion of the Merger, Ashanti's head office in Accra, Ghana, will
enjoy an expanded role within the combined group's operations.
AngloGold has entered into undertakings in the Transaction Agreement which mean
that it will observe the existing contractual and statutory employment rights
of Ashanti management and employees.
11. Ashanti options
Upon the Merger being completed, all options granted under the AGC Senior
Management Share Option Scheme will become exercisable for a period of one
month thereafter. Option holders will receive upon exercise of Ashanti options
AngloGold Shares in an amount determined by reference to the Exchange Ratio.
AngloGold has also agreed to offer to all Ashanti option holders the
alternative of either receiving cash in cancellation of their Ashanti options
or rolling over their Ashanti options into substitute options exercisable for
AngloGold Shares. AngloGold has agreed pursuant to the Transaction Agreement to
make available such proposals at least one month prior to the Merger being
completed.
12. Ashanti warrants
Holders of issued and outstanding warrants of Ashanti Warrants Limited, a
wholly-owned subsidiary of Ashanti, will be treated in accordance with the
relevant deed poll.
13. Listings
Following completion of the Merger, the combined group will be listed on the
JSE Securities Exchange South Africa, the New York Stock Exchange, the London
Stock Exchange, the Australian Stock Exchange and Euronext Paris and quoted on
Euronext Brussels. Application will be made to list ordinary shares and
Ghanaian depositary shares of the combined group on the Ghana Stock Exchange.
14. Timing
AngloGold and Ashanti hope to receive the views of the Government of Ghana in
relation to the Merger by mid-September.
A request has been submitted to the Staff of the US Securities and Exchange
Commission (the "SEC") for a "no action" letter confirming the availability of
an exemption pursuant to Section 3(a)(10) of the US Securities Act of 1933, as
amended (the "Securities Act") from the registration requirements under the
Securities Act. Should the issuance of AngloGold Shares in the Scheme qualify
for such an exemption, relevant documentation will be posted to Ashanti
shareholders as promptly as reasonably practicable after the required approvals
of the Government of Ghana have been received and the relevant documentation
has been prepared. Should the issuance of AngloGold Shares not qualify for such
an exemption, AngloGold will prepare and file a registration statement with the
SEC as promptly as reasonably practicable and relevant documentation will be
posted to Ashanti shareholders upon the registration statement becoming
effective, provided that the required approvals of the Government of Ghana have
been received.
Further announcements, which will include details regarding the timetable for
the implementation of the Merger, will be made in due course.
15. Anglo American plc
If the Merger is approved, Anglo American plc's shareholding in AngloGold would
be diluted from 51.4% to 44.5%. The Securities Regulation Panel of South Africa
has granted to Anglo American plc an exemption from making a mandatory offer to
AngloGold minority shareholders, should Anglo American acquire AngloGold shares
to restore its holding to above 50%.
16. Board recommendation and undertakings
CIBC World Markets plc, Ashanti's financial adviser, has delivered to the
Ashanti Board its written opinion that the Exchange Ratio is fair to the
Ashanti Shareholders from a financial point of view. The Ashanti Board,
consider the terms of the Merger to be in the best interests of Ashanti
Shareholders as a whole.
The Ashanti Board has approved the Merger and will recommend that Ashanti
Shareholders vote in favour of the resolutions to be proposed at the scheme
meeting of the Ashanti Shareholders, as the directors of Ashanti intend to in
respect of their own beneficial holdings which amount in aggregate to 113,514
Ashanti Shares (representing 0.1% of the issued ordinary share capital of
Ashanti).
Chester Crocker, Lynda Chalker and Edward Haslam, being Directors of Ashanti,
have not taken part in the deliberations of the Ashanti Board relating to the
recommendation of the Merger. Chester Crocker and Lynda Chalker did not
participate because they or companies in which they have an interest have
entered into commercial contracts with AngloGold, its subsidiaries or its major
shareholder, Anglo American plc. Edward Haslam did not participate because he
is an executive director of Ashanti's largest shareholder, Lonmin Plc which has
given an undertaking to AngloGold to support the Merger.
Ashanti has agreed not to solicit any alternate acquisition proposals but is
not prevented from receiving and considering or providing any information in
relation to new proposals provided that it notifies AngloGold of the receipt of
any acquisition proposal and the material terms thereof and discloses any
information regarding Ashanti made available to persons in connection with such
alternate acquisition proposals to AngloGold.
Except as provided below, the Ashanti Board may not withdraw, or propose to
withdraw, its recommendation. If, at any time prior to the effective time of
the Scheme, the Ashanti Board receives an acquisition proposal that the Ashanti
Board determines to be a superior proposal to the Merger, the Ashanti Board
will be permitted to withdraw its recommendation if, after notification to
AngloGold of such proposal, AngloGold does not increase the consideration
offered or otherwise improve the terms of the offer or if, after such increase
or improvement, the Ashanti Board still determines (after having received a
written opinion of a financial adviser of the fairness of the superior proposal
from a financial point of view) that the superior proposal is still superior to
the amended AngloGold proposal.
In addition, if the Ashanti Board determines, in its good faith judgement after
having received advice of outside legal counsel, that the failure to withdraw
its recommendation would constitute a breach of its fiduciary duties under
applicable law, the Ashanti Board may withdraw its recommendation, upon notice
to AngloGold; provided, however, that in making such determination, the Ashanti
Board may not take into account any acquisition proposal or inquiry that is
reasonably likely to result in an acquisition proposal.
Should the Ashanti Board receive a superior proposal and withdraw its
recommendation and either AngloGold or Ashanti terminates the Transaction
Agreement because of such withdrawal, Ashanti will be required to pay to
AngloGold, upon such termination, a termination fee of US$15,000,000 to the
extent that such payment is lawful under Ghanaian law. In addition, if (i) the
Transaction Agreement is terminated because the conditions relating to the
support of the Government of Ghana as a shareholder and its approvals and
undertakings as a regulator have not been satisfied (or waived by AngloGold) on
or before 30 September 2003 or such later date as may be agreed by Ashanti and
AngloGold and (ii) within three months after the date of such termination a
recommended acquisition proposal that constitutes a superior proposal is
announced with a third party that, during the period commencing on 16 May 2003
and ending on the date of such termination (A) made an acquisition proposal to
Ashanti, (B) entered into a confidentiality agreement with Ashanti, or (C)
engaged in substantive discussions with Ashanti regarding a possible
acquisition proposal, then Ashanti will be required to pay AngloGold a
termination fee of US$15,000,000, to the extent that such payment is lawful
under Ghanaian law, upon completion of such acquisition. Ashanti has also
agreed to procure that any third party that makes a superior proposal agrees to
pay the termination fee of US$15,000,000 upon consummation of that superior
proposal if it has not been paid earlier by Ashanti.
If AngloGold wrongfully terminates the Transaction Agreement in breach of its
obligations to complete the transaction, it will be committed to pay Ashanti
US$75,000,000 to compensate it for the damages Ashanti will have suffered as a
result of the breach. If Ashanti wrongfully terminates the agreement in breach
of its obligations, it will be liable for all damages incurred by AngloGold,
which, in that event, will not be subject to any cap. In either case no payment
will be made unless there has been a determination by the High Court of England
that a breach of the Transaction Agreement has occurred. The rights of third
parties to enforce the Transaction Agreement have been excluded.
17. Further cautionary announcement
Shareholders are reminded that there can be no assurance that the Merger will
be implemented. Consequently, holders of AngloGold and Ashanti securities are
advised to continue to exercise caution when dealing in relevant securities
until a further announcement is made.
Johannesburg and Accra
5 August 2003
AngloGold's JSE Sponsor: UBS
For further information contact:
AngloGold
Steve Lenahan +27 83 308 2200
Peta Baldwin +27 11 637 6647
Charles Carter +1 212 750 7999
Tomasz Nadrowski +44 7958 749555
+1 917 912 4641
Andrea Maxey +61 8 9425 4604
Ashanti
Kweku Awotwi +233 21 77 2331
Corinne Gaisie +44 20 7256 9938
UBS Investment Bank
James Hartop +44 20 7567 8000
CIBC World Markets
Andy Quinn +44 20 7234 6000
First Africa
Kofi Adjepong-Boateng +27 11 327 3666
Citigate Sard Verbinnen
(US Media)
Paul Verbinnen +1 212 687 8080
Golin/Harris International
(US investors and Media)
Kevin Kirkeby +1 212 697 9191
Citigate Dewe Rogerson
(UK Media)
Patrick Donovan +44 20 7638 9571
Grandfield
(UK investors and Media)
Matthew Jervois +44 20 7417 4170
Channel Two
(Ghanaian Media)
David Ampofo +233 21 666 643
CONFERENCE CALL DETAILS
An analysts' conference call will take place on 5 August 2003 at 13:00 Accra
time, 15:00 Johannesburg time, 14:00 London time, 09:00 New York time. The
conference ID number is 2138069.
The dial in numbers, by country, are:
North America +1 800 267 9155 or +1 706 634 0083,
United Kingdom +44 800 953 0406,
United Kingdom and Europe +44 1452 560 299,
Australia +61 800 766 788 or +61 28 228 7000,
South Africa +27 800 99 4050, and
Ghana +44 1452 560 299
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement are forward-looking within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, including without limitation,
those statements concerning (i) timing, fulfillment of conditions, tax
treatment and completion of the Merger, (ii) the value of the transaction
consideration, (iii) expectations regarding production and cost savings at the
combined group's operations and its operating and financial performance and
(iv) synergies and other benefits anticipated from the Merger. Although
AngloGold and Ashanti believe that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct.
For a discussion of important terms of the Merger and important factors and
risks involved in the companies' businesses, which could cause the combined
group's actual operating and financial results to differ materially from such
forward-looking statements, refer to AngloGold's and Ashanti's filings with the
US Securities and Exchange Commission (the "SEC"), including AngloGold's annual
report on Form 20-F for the year ended 31 December 2002, filed with the SEC on
7 April 2003 and Ashanti's annual report on Form 20-F for the year ended 31
December 2002, filed with the SEC on 17 June 2003 and any other documents in
respect of the Merger that are furnished to the SEC by AngloGold or Ashanti
under cover of Form 6-K.
Neither AngloGold, Ashanti nor the combined group undertakes any obligation to
update publicly or release any revisions to publicly update any forward-looking
statements discussed in this announcement, whether as a result of new
information, future events or otherwise.
ADDITIONAL INFORMATION
In connection with the Merger, AngloGold will file with, or otherwise furnish
to, the SEC a scheme document/prospectus. Investors and security holders are
urged to carefully read the scheme document/prospectus regarding the Merger
when it becomes available, because it will contain important information.
Investors and security holders may obtain a free copy of the scheme document/
prospectus (when it is available) and other documents containing information
about AngloGold and Ashanti, without charge, at the SEC's website at
www.sec.gov. Copies of the scheme document/prospectus together with any SEC
filings that may be incorporated by reference in the scheme document/prospectus
may also be obtained free of charge by directing a request to: AngloGold
Limited, 11 Diagonal Street, Johannesburg 2001, PO Box 62117, Marshalltown
2107, South Africa, Attention: Chris R. Bull, Company Secretary, telephone +27
11 637 6000, fax: +27 11 637 6624.
UBS Investment Bank and First Africa Group Holdings (Pty) Limited ("First
Africa") are acting for AngloGold and no one else in connection with the Merger
and will not be responsible to anyone other than AngloGold for providing the
protections afforded to clients of UBS Investment Bank or First Africa or for
providing advice in relation to the Merger.
CIBC World Markets plc is acting for Ashanti and no one else in connection with
the Merger and will not be responsible to anyone other than Ashanti for
providing the protections afforded to clients of CIBC World Markets plc or for
providing advice in relation to the Merger.
APPENDIX I
Conditions to the Scheme
The Transaction can only become effective if all the conditions to the
implementation of the Scheme have been satisfied (or waived) in accordance with
paragraph 4 of this Appendix I. Relevant definitions to terms used in this
Appendix are set out in Appendix II.
The Scheme will become effective upon the delivery of the Scheme Order to the
Registrar of Companies for registration and publication in the Gazette. Unless
the Scheme becomes effective by not later than 31 March 2004 or such later date
as AngloGold and the Company may agree and the High Court may permit, the
Scheme will not become effective and the Transaction will not proceed.
The conditions that must be satisfied (or waived) for the Scheme to be
implemented are set out below:
1. The Scheme is conditional upon
1.1 the approval of the Scheme by not less than three-fourths of
the votes cast by holders of Ashanti Shares present at the
Scheme Meeting in person or by proxy and entitled to vote and
voting;
1.2 (i) the confirmation of the Scheme by the High Court and (ii)
the delivery of an office copy of the Scheme Order to the
Registrar of Companies;
1.3 in the event that the No-Action Letter is not received, the
Registration Statement having been declared effective by the
SEC under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement having been
issued by the SEC and no proceeding for that purpose having
been initiated by the SEC;
1.4 (i) the admission to the Official List of the UKLA of the
AngloGold Shares having become effective in accordance with
the UKLA Listing Rules, and the admission of the AngloGold
Shares to trading on the LSE's market for listed securities
having become effective, or the UKLA having agreed and
confirmed its decision to admit the AngloGold Shares to the
Official List of the UKLA, and the LSE having agreed to admit
the AngloGold Shares to trading subject only to (A) the
allotment of the AngloGold Shares and/or (B) the Scheme
having become effective in all respects, and (ii) the
AngloGold Shares to be issued in the Scheme having been
authorised for listing on the JSE, authorised for listing on
the NYSE, subject to official notice of issuance, authorised
for listing on the GSE, approved for official quotation by
the ASX, and approved for official quotation by the Euronext
Paris.
1.5 no Governmental Authority having taken, instituted or
implemented any action, proceeding, suit, investigation,
enquiry, decision or order that would prohibit or prevent the
consummation of the Scheme or otherwise make the Scheme or
its implementation void, illegal or unenforceable; and
1.6 the receipt by AngloGold of the approval of the Bank of Ghana
for the issuance of AngloGold Shares to members of the
Company resident in Ghana.
2. The Transaction will also be conditional upon, and
accordingly, the necessary action to make the Scheme
effective will not be taken, unless the following conditions
are satisfied or waived by AngloGold on the basis described
in paragraph 4 below:
2.1 the approval of the Special Resolution by the requisite vote
of the members of the Company at the Extraordinary General
Meeting;
2.2 no amendment or modification of any of the terms and
conditions of the Scheme in a manner detrimental to AngloGold
without the prior written consent of AngloGold;
2.3 the warranties of the Company contained in the Transaction
Agreement being true and correct as of the Confirmation Date
as though made on and as of the Confirmation Date;
2.4 the performance or compliance by the Company in all material
respects with the covenants required by the Transaction
Agreement to be performed or complied with by the Company
prior to the Confirmation Date;
2.5 the Company not having commenced a rights offering for
Ashanti Shares or other securities of the Company;
2.6 the European Commission having either:
(i) indicated that the Scheme and its implementation does not
give rise to a concentration falling within the scope of
Council Regulation (EEC) 4064/89
(ii) concerning the control of concentrations between
undertakings, as amended (the "EC Merger Regulation"); or
(iii) taken a decision, without imposing any conditions or
obligations that are not reasonably satisfactory to AngloGold
under Article 6(1)(b) or Article 8(2) of the EC Merger
Regulation, declaring the Scheme or its implementation
compatible with the common market, or being deemed to have
done so under Article 10(6) of the EC Merger Regulation; or
(iv) referred the whole or part of the Scheme or its
implementation to the competent authorities of one or more
member states of the European Union under Article 9(3) of the
EC Merger Regulation or having been deemed to have done so
under Article 9(5) of the EC Merger Regulation; and
(a) each such authority having granted a clearance without
imposing any conditions or obligations that are not
reasonably satisfactory to AngloGold in respect of all of
those parts of the Scheme or its implementation that were
referred to it, or being deemed to have granted such a
clearance; and
(b) the requirements of paragraph (ii) above being satisfied
with respect to any part not referred to the competent
authority of any member state of the European Union;
2.7 receipt by AngloGold and the Company of the approval from
either the Competition Commission in terms of Section 14(1)
of the Competition Act, 1998 (Act 89 of 1998) (as amended) of
the Republic of South Africa (the "SA Competition Act"), the
Competition Tribunal in terms of Section 15(2) of the SA
Competition Act or the SA Competition Appeal Court in terms
of Section 17 of the SA Competition Act which is
unconditional or which only requires disposal of (i) Tameng
or (ii) other businesses, assets and properties (other than
the Savuka property) with an aggregate value of less than
US$50 million;
2.8 receipt of the approvals of Governmental Authorities and
third party consents set forth in Exhibit 1 to this Appendix
I;
2.9 other than as set forth in paragraph 2.16 or Exhibit 1 of
this Appendix 1, all authorisations, orders, grants,
consents, clearances, certificates, licences, permissions,
waivers and approvals necessary to implement the Transaction
having been obtained from any appropriate Governmental
Authority (other than any antitrust or merger control
authority) or from any third party with whom any member of
the Company Group has entered into contractual arrangements
(in each case, where the absence of any such authorisation,
order, grant, consent, clearance, certificate, licence,
permission, waiver or approval would have a Company Material
Adverse Effect) and such authorisations, orders, grants,
consents, clearances, certificates, licences, permissions,
waivers and approvals remaining in full force and effect and
there being no intimation of any intention to revoke or not
renew, or to withdraw, suspend, withhold, modify or amend any
of these (in each case, where such revocation, failure to
renew, withdrawal, suspension, withholding, modification or
amendment would have a Company Material Adverse Effect) and
all necessary legal, statutory or regulatory obligations or
court orders or judgements in any jurisdiction in respect of
the Scheme or the Transaction having been complied with
(other than as would not have a Company Material Adverse
Effect);
2.10 no Governmental Authority having taken, instituted,
implemented or threatened any action, proceeding, suit,
investigation, enquiry, decision or order that could or
might:
(i) require the divestiture by any member of the AngloGold Group
or any member of the Company Group of all or any portion of
their respective businesses, assets or properties other than
(A) Tameng or (B) other businesses, assets and properties
(other than the Savuka property) with an aggregate value of
less than US$50 million, or impose any limitation on the
ability of any of them to conduct their respective businesses
(or any of them) or to own any of their respective assets or
properties or any part thereof; or
(ii) require, prevent or delay the transfer of any Ashanti Shares
to AngloGold in accordance with the Transaction Agreement;
2.11 Except as set forth in the corresponding section of the
Company Disclosure Schedule (or other section of the Company
Disclosure Schedule referring to Appendix I) or as would not
have a Company Material Adverse Effect, there being no
provision of any agreement, arrangement, licence, permit or
other instrument to which any member of the Company Group is
a party or by or under which any of its assets may be bound,
entitled or subject, that as a result of the Transaction
could or might result in:
(i) any monies borrowed by, or any other indebtedness or
liability (actual or contingent) of, any member of the
Company Group, being repayable or capable of being declared
repayable immediately or earlier than their or its stated
maturity date or repayment date;
(ii) any such agreement, arrangement, licence, permit or other
instrument being breached, terminated or adversely modified
or affected, or any obligation or liability arising
thereunder;
(iii) any assets or interests of any member of the Company Group
being or falling to be disposed of or charged or any right
arising under which any such asset or interest could be
required to be disposed of or charged, in each case,
otherwise than in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property or assets of any member of the Company Group or any
such mortgage, charge or security interest being enforced;
(v) the rights, liabilities, obligations or interest of any
member of the Company Group in, or the business of any member
of the Company Group with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or
business) being terminated, adversely modified or affected;
(vi) the value of any member of the Company Group or its financial
or trading position or prospects being prejudiced or
adversely affected;
(vii) any member of the Company Group ceasing to be able to carry
on business under any name under which it currently does so;
or
(viii) the creation of any liability, actual or contingent, by any
member of the Company Group;
2.12 AngloGold not having discovered on or after the date of the
Transaction Agreement (and, for purposes of this condition,
any matter set forth in the corresponding section of the
Company Disclosure Schedule (or other section of the Company
Disclosure Schedule referring to Appendix I) shall be deemed
to have been previously discovered by AngloGold):
(i) any adverse financial, business or other information in
relation to circumstances existing prior to the date of the
Transaction Agreement that has not been disclosed in any
document filed with the SEC to which access is publicly
available or publicly announced through the Regulatory News
Service of the LSE by any member of the Company Group prior
to such date and that would have a Company Material Adverse
Effect;
(ii) that any member of the Company Group is subject to any
liability (contingent or otherwise) that has not been
disclosed or reflected in the documents filed by the Company
with the GSE, UKLA or SEC prior to the date of the
Transaction Agreement and that would have a Company Material
Adverse Effect;
(iii) that any financial, business or other information that has
been disclosed in any document filed with the SEC to which
access is publicly available or publicly announced through
the Regulatory News Service of the LSE by any member of the
Company Group prior to the date of the Transaction Agreement
contains any misrepresentation of fact or omits to state a
fact necessary to make the information contained therein
complete and not misleading, and that would have a Company
Material Adverse Effect;
(iv) that any member of the Company Group has failed to comply
with any and/or all applicable legislation or regulation, of
any jurisdiction with regard to the disposal, spillage,
release, discharge, leak or emission of any waste of
hazardous substance or any substance likely to impair the
environment or harm human health or animal health or
otherwise relating to environmental matters, or that there
has otherwise been any such disposal, spillage, release,
discharge, leak or emission by any such member (whether or
not the same constituted a non-compliance by any person with
any such legislation or regulations, wherever the same may
have taken place) any of which disposal, spillage, release,
discharge, leak or emission would be likely to give rise to
any liability (actual or contingent) on the part of such
member of the Company Group and that would have a Company
Material Adverse Effect; or
(v) that there is any liability (actual or contingent) of any
member of the Company Group to make good, repair, reinstate
or clean up any property or any controlled waters now or
previously owned, occupied, operated or made use of or
controlled by such member of the Company Group, under any
environmental legislation, regulation, notice, circular or
order of any government, governmental, quasi-governmental,
state or local government, supranational, statutory or other
regulatory body, agency, court, association or any other
person or body in any jurisdiction and that would have a
Company Material Adverse Effect;
2.13 since 31 December 2002 (and other than as disclosed in the
accounts for the year then ended or in any document filed
with the SEC to which access is publicly available or
publicly announced through the Regulatory News Service of the
LSE by the Company prior to the date of the Transaction
Agreement) there not having been:
(i) any Company Material Adverse Effect;
(ii) any litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Company Group is
a party (whether as a plaintiff, defendant or otherwise)
that, if adversely determined, would have a Company Material
Adverse Effect; or
(iii) any steps taken that are likely to result in the withdrawal,
cancellation, termination or modification of any licence,
lease, permit or other approval held by any member of the
Company Group that is necessary for the proper conduct of its
businesses where such withdrawal, cancellation, termination
or modification would have a Company Material Adverse Effect;
2.14 other than as disclosed in any document filed with the SEC to
which access is publicly available or publicly announced
through the Regulatory News Service of the LSE by the Company
prior to the date of the Transaction Agreement, no member of
the Company Group having, since 31 December 2002:
(i) issued, authorised or proposed the issue of additional shares
of any class of its share capital, or securities convertible
into shares of any class of its share capital, or rights,
warrants or options to subscribe for, or acquire, any such
shares of its share capital or securities convertible into
any shares of its share capital (other than pursuant to the
exercise of outstanding Ashanti Options or Ashanti Warrants)
or purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any shares of any class of its
share capital or other securities or reduced any part of its
share capital;
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other
distribution whether payable in cash or otherwise (other than
between the Company and a Company Subsidiary in the ordinary
course of business consistent with past practice);
(iii) authorised or proposed or announced its intention to propose
any acquisition or disposition of assets or shares for
consideration in excess of US$50 million in the aggregate;
(iv) issued, authorised or proposed the issue of any debentures
or, other than in the ordinary course of business or pursuant
to a transaction between the Company and a wholly-owned
Company Subsidiary, incurred or increased any indebtedness
(excluding any increase in indebtedness following a drawdown
under the existing US$200 million revolving credit facility
for working capital purposes) or contingent liability other
than contingent liabilities that would not have a Company
Material Adverse Effect;
(v) implemented, effected, proposed, authorised or announced its
intention to effect, any reconstruction, amalgamation,
scheme, merger, consolidation, combination, commitment,
change in share or loan capital or other transaction or
arrangement (other than the Scheme or the Transaction or in
respect of any AngloGold Shares issued pursuant to any
Company option or Company warrants);
(vi) other than the Service Agreement between Ashanti Capital
Limited and Sam Esson Jonah dated 28 February 2003 and the
normal annual salary and other related increases and
extensions in accordance with past remuneration policies,
entered into or materially varied or made any offer to enter
into or materially vary the terms of any agreement, contract,
commitment or arrangement to an extent that is material with
any director or executive officer of any member of the
Company Group;
(vii) except as permitted by the other subparagraphs of this
paragraph 2.14 and other than any transaction between the
Company and a wholly-owned Company Subsidiary, entered into
or modified, any contract, transaction, arrangement or
commitment (whether in respect of capital expenditures or
otherwise) other than in the ordinary course of business,
which in the case of mining capital expenditures shall be
consistent with the life of mine plans of the Company, copies
of which have been provided to AngloGold prior to the date of
the Transaction Agreement;
(viii) other than in respect of any member of the Company Group that
is dormant and was solvent at the relevant time, taken any
corporate action or had any legal proceedings instituted
against it for its winding-up, dissolution or reorganisation
or for the appointment of a receiver, administrative
receiver, administrator, trustee or similar officer of all or
any material part of its assets for revenues or any analogous
proceedings in any jurisdiction or had any such person
appointed;
(ix) other than pursuant to the Special Resolution, made any
alteration to its Regulations, memorandum or articles of
association (or equivalent constitutional documents in
respect of overseas jurisdiction of incorporation) that is
material to such member of the Company Group;
(x) entered into any contract, transaction or arrangement that
would be restrictive on the business of any member of the
Company Group, other than in the ordinary course of business
and that would not have a Company Material Adverse Effect;
(xi) waived or compromised any claim or settled any litigation if
such waiver, compromise or settlement would have a Company
Material Adverse Effect; or
(xii) except as permitted by the other subparagraphs of this
paragraph 2.14 or in the ordinary course of business, entered
into any contract, commitment, arrangement or agreement or
passed any resolution or made any offer (that remains open to
acceptance) with respect to or announced any intention to, or
to propose to, effect any of the transactions, matters or
events referred to in this condition.
2.15 the execution and delivery by the Government to AngloGold of
the Government Support Deed.
2.16 the receipt of all approvals, consents, derogations, waivers,
confirmations and undertakings in the form requested prior to
the date hereof by AngloGold and Ashanti from the Government
Authorities in Ghana in connection with the Transaction.
For purposes of the conditions in paragraphs 1 and 2, none of
the conditions shall apply to anything done by or in relation
to, or having an effect on the Geita mine and/or Cluff
Resources Limited and/or any of its subsidiaries.
For purposes of the conditions in paragraph 2,
marked-to-market changes in the Company's hedge portfolio
constituted at the date of the Transaction Agreement, altered
in accordance with the relevant provision of the Transaction
Agreement, that occurred due to changes in general economic
and market conditions, will not be taken into account in
determining whether such conditions have been satisfied.
3. The Transaction will also be conditional upon, and
accordingly, the necessary action to make the Scheme
effective will not be taken unless the following conditions
are satisfied or waived by the Company on the basis described
in paragraph 4 below:
3.1 the warranties of AngloGold contained in this Transaction
Agreement being true and correct as of the Confirmation Date
as though made on and as of the Confirmation Date;
3.2 the performance or compliance by AngloGold in all material
respects with covenants required by the Transaction Agreement
to be performed or complied with by AngloGold prior to the
Confirmation Date.
4. This paragraph 4 describes the procedure for the waiver of
any of the conditions to the Scheme described in paragraphs
1, 2 and 3 of this Appendix I;
4.1 AngloGold and the Company acting together may waive all or
any of the conditions contained in paragraphs 1.5 and 1.6 and
may modify all or any of the conditions contained in
paragraphs 1.1 to 1.4.
4.2 AngloGold reserves the right to waive all or any of the
conditions in paragraph 2.
4.3 The Company reserves the right to waive all or any of the
conditions in paragraph 3.
4.4 If any of the conditions set forth in paragraphs 1.1, 1.3,
2.1, 2.6, 2.7, 2.8 and 2.16 of this Appendix I have not been
satisfied or waived in accordance with this paragraph on or
prior to the Advance Meeting, the Company will apply to the
High Court for a postponement of the Court Hearing until such
later date and time as AngloGold and the Company reasonably
believe is necessary for all such remaining conditions to be
satisfied or waived.
4.5 The obligations of AngloGold and the Company to consummate
the Scheme are subject to the satisfaction or waiver of all
the conditions set forth in this Appendix I (other than the
conditions set forth in paragraphs 1.2, 1.4 and 2.2) by no
later than 10:00 a.m. (Accra time) on the Confirmation Date,
it being understood and agreed that, if a condition has not
been satisfied or waived (or deemed to have been waived under
paragraph 4.6) by such date and time, nothing herein will
oblige either party to waive such condition. If any of the
conditions set forth in this Appendix I (other than the
conditions set forth in paragraphs 1.2, 1.4 and 2.2) have not
been satisfied or waived (or deemed to have been waived under
paragraph 4.6) by 10:00 a.m. (Accra time) on the Confirmation
Date, the Company must apply to the High Court for a
postponement of the Court Hearing until such later date and
time as AngloGold and the Company reasonably believe that all
such remaining conditions will be satisfied or waived.
4.6 AngloGold agrees that by no later than 10:00 a.m. (Accra
time) on the Confirmation Date, the conditions set forth in
paragraphs 2.3, 2.4, 2.5, 2.9 to 2.15 (inclusive) of this
Appendix I shall be deemed to have been waived by AngloGold
unless AngloGold shall have earlier terminated the
Transaction Agreement in accordance with the relevant
provision set out therein. The Company agrees that by no
later than 10:00 a.m. (Accra time) on the Confirmation Date,
the conditions set forth in paragraphs 3.1 and 3.2 of this
Appendix I shall be deemed to have been waived by the Company
unless the Company shall have earlier terminated the
Transaction Agreement in accordance with the relevant
provision set out therein.
4.7 AngloGold will be entitled to delay its waiver of the
condition in paragraph 2.2 until after the High Court has
issued the Scheme Order and, for the avoidance of doubt, the
confirmation of the Scheme by the High Court will not oblige
AngloGold to waive the condition in paragraph 2.2, it being
understood and agreed that the Company will not deliver the
Scheme Order to the Registrar of Companies until AngloGold
has confirmed its waiver of the condition set forth in
paragraph 2.2 to the Company by written notice.
After the High Court has confirmed the Scheme the only
conditions required to be satisfied or, if permissible,
waived before the Transaction can become effective will be
the conditions in paragraphs 1.2(ii), 1.4 and 2.2.
EXHIBIT 1
1. Receipt of all authorisations, orders, grants, consents, clearances,
certificates, licences, permissions, waivers and approvals of Governmental
Authorities (other than antitrust or merger control authorities) and third
parties required to be obtained in Guinea, Tanzania and Zimbabwe to
implement the Transaction (collectively, the "Mining Approvals") that are
identified and with respect to which applications are filed, or requests
made, by AngloGold within 30 days after the date of the Transaction
Agreement, it being understood by the parties that, if any Mining Approval
is not identified, and an application or request made, within such 30-day
period, the receipt of such Mining Approval shall be deemed to be waived by
AngloGold.
2. Receipt of all authorisations, orders, grants, consents, clearances,
certificates, licences, permissions, waivers and approvals of Governmental
Authorities (other than antitrust or merger control authorities and other
than Mining Approvals) or third parties required to be obtained to
implement the Transaction (collectively, the "General Approvals") that are
identified and with respect to which applications are filed, or requests
made, by AngloGold within 30 days after the date of the Transaction
Agreement, it being understood by the parties that, if any General Approval
is not identified, and an application or request made, within such 30-day
period, the receipt of such General Approval shall be deemed to be waived
by AngloGold for the purpose of these conditions.
3. Receipt of any required consents under AngloGold's US$600 million unsecured
syndicated loan facility dated 27 February 2002 and AngloGold's US$400
million unsecured syndicated loan facility dated 3 May 2001 to implement
the Transaction.
4. Receipt of comfort acceptable to AngloGold (acting reasonably) that an
event of default will not occur under the Company's US$200 million
revolving credit facility dated 28 June, 2002 upon the consummation of the
Transaction.
5. Waiver by the Majority Lenders (as defined under the terms of the Company's
US$200 million revolving credit facility) of (i) the relevant provisions of
the Company's US$200 million revolving credit facility to enable AngloGold
to provide funding to the Company after the Effective Time by way of
subordinated shareholder loans (subordinate to the rights of the syndicate
banks under that facility) and (ii) the provisions requiring completion of
a rights offering.
6. Receipt of any approval of the South African Reserve Bank required to
implement the Transaction and the funding requirements described in the
relevant provision of the Transaction Agreement.
7. Subject to paragraph 2.2 of Appendix 1, any condition to the Scheme imposed
by the High Court.
APPENDIX II
Definitions to Appendix I
"Advance Meeting" a meeting between the parties to the Transaction
Agreement and their respective advisers held at
the offices of Shearman & Sterling, 9 Appold
Street, London, EC2A 2AP, or such other place as
the parties may agree, on the sixth business day
immediately preceding the scheduled Court Hearing
Date for the purpose of confirming the
satisfaction or, if permissible, waiver on or
prior to the Confirmation Date of each of the
conditions set forth in Appendix I (other than the
conditions set forth in paragraph 1.2 (ii), 1.4
and 2.2 of Appendix I that shall be satisfied or,
if permissible, waived at the Effective Time)
"affiliate" with respect to any specified person, any other
person that, directly or indirectly through one or
more intermediaries, controls, is controlled by or
is under common control with such specified person
"AngloGold" AngloGold Limited, a publicly listed company
incorporated under the laws of the Republic of
South Africa
"AngloGold ADSs" AngloGold American Depositary Shares, each of
which represents one AngloGold Share
"AngloGold Group" AngloGold and its subsidiary undertakings,
associated undertakings and any other undertakings
in which AngloGold and/or such undertakings
(aggregating their interests) have a significant
interest, and for these purposes "subsidiary
undertaking", "associated undertaking" and
"undertaking" have the meanings given by the
Companies Act, other than paragraph 20(1)(b) of
Schedule 4A to the Companies Act which shall be
excluded for this purpose, and "significant
interest" means a direct or indirect interest in
ten per cent or more of the equity share capital
(as defined in the Companies Act)
"AngloGold Model" the financial model prepared by AngloGold for
purposes of its valuation analysis of the Company,
the Company Subsidiaries and Geita, taken as a
whole, and delivered by AngloGold to the Company
on the date of the Transaction Agreement,
containing the data provided by the Company to
AngloGold, as adjusted by AngloGold and assuming a
real gold price of US$340 per ounce and discount
rates as set forth in the schedule below:
Project Discount Rate (per cent.)
Obuasi (cash flows from 2003 to 2009 inclusive)
5.75
Obuasi (cash flows from 2010 to 2018 inclusive)
7.75
Obuasi (cash flows from 2019 onwards) 9.75
Geita 5.50
Iduapriem/ Teberebie 5.75
Bibiani 5.75
Siguiri 5.75
Freda Rebecca 5.75
Other corporate cash flows 5.75
"AngloGold Shares" ordinary shares, par value ZAR0.25 per share, of
AngloGold
"Ashanti Option Plan" the AGC Senior Management Option Scheme, as
amended from time to time
"Ashanti Options" the employee stock options issued under the
Ashanti Option Plan
"Ashanti Shares" all the issued and outstanding ordinary shares, no
par value per share, of the Company
"Ashanti Warrant Deed Poll the Deed Poll, dated 2 November 1999, between AWL
" and the Company, as amended from time to time
"Ashanti Warrants" the warrants issued by AWL pursuant to the Ashanti
Warrant Deed Poll
"ASX" the Australian Stock Exchange Limited
"AWL" Ashanti Warrants Limited, a wholly owned
subsidiary of the Company incorporated under the
laws of the Cayman Islands
"Company" Ashanti Goldfields Company Limited, a publicly
listed company incorporated under the laws of the
Republic of Ghana
"Companies Act" the United Kingdom Companies Act 1985 (as amended)
"Companies Code" the Ghana Companies Code, 1963 (Act 179), as
amended
"Company Disclosure the Company Disclosure Schedule attached to the
Schedule" Transaction Agreement, dated the date of the
Transaction Agreement, delivered by the Company to
AngloGold in connection with the Transaction
Agreement
"Company Group" the Company and its subsidiary undertakings,
associated undertakings and any other undertaking
in which the Company and/or such undertakings
(aggregating their interests) have a significant
interest, and for these purposes "subsidiary
undertaking", "associated undertaking" and
"undertaking" have the meanings given by the
Companies Act, other than paragraph 20(1)(b) of
Schedule 4A to the Companies Act which shall be
excluded for this purpose, and "significant
interest" means a direct or indirect interest in
ten per cent or more of the equity share capital
(as defined in the Companies Act)
"Company Material Adverse any event, circumstance, change or effect (not
Effect" already reflected in the AngloGold Model) that,
individually or together with any other event,
circumstance, change or effect, is or would
reasonably likely be materially adverse to the
business, financial condition, results of
operations, assets or liabilities of the Company,
the Company Subsidiaries and Geita, taken as a
whole, that results (after offsetting any positive
event, circumstance, change or effect not already
reflected in the AngloGold Model) in a decrease in
the Net Present Value of US$75,000,000 or more;
provided, however, that, in determining whether or
not a Company Material Adverse Effect has
occurred, changes in general world economic
conditions, the price of gold, gold lease rates,
US interest rates and currency exchange rates
shall not be taken into account. For purposes of
determining whether a Company Material Adverse
Effect has occurred, the decrease in the Net
Present Value shall be calculated as the
difference between: (i) the Net Present Value
determined by using the AngloGold Model without
making any changes in the data or assumptions
contained therein, and (ii) the Net Present Value
determined by using the AngloGold Model with no
changes in the assumptions contained therein and
with such adjustments to the cash flow and other
data contained therein as may be necessary to
reflect (a) the adverse events, circumstances,
changes or effects that gave rise to the asserted
Company Material Adverse Effect (not already
reflected in the AngloGold Model) and (b) the
positive events, circumstances, changes or effects
(not already reflected in the AngloGold Model)
that shall have occurred after the date of the
Transaction Agreement identified by the Company
and taken into account by AngloGold, acting
reasonably, as contemplated by the relevant
provisions of the Transaction Agreement
"Company Subsidiary" a subsidiary of the Company
"Confirmation Date" the date on which the Scheme Order is issued by
the High Court
"Court Hearing" the hearing by the High Court of the application
to confirm the Scheme at which any member of the
Company claiming to be affected by the Scheme
shall be entitled to be represented and to object
"Court Hearing Date" the first day on which the Court Hearing is held
or, if the Court Hearing is adjourned for any
reason, the date on which the adjourned Court
Hearing is held
"Effective Time" the date and time of the delivery by the Company
of the Scheme Order to the Registrar of Companies
for registration and publication in the Gazette
"Exchange Act" the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated
thereunder
"Extraordinary General the extraordinary general meeting of the members
Meeting" of the Company to consider the Special Resolution
"Gazette" the Government Gazette of the Republic of Ghana
"Geita" the Company's interest in Geita Gold Mining
Limited
"Government" the Government of the Republic of Ghana
"Government Support Deed" the proposed shareholder support deed agreement
between AngloGold and the Government, in form and
substance satisfactory to AngloGold and the
Government, pursuant to which the Government will
agree, among other things, to vote in favour of
the Scheme in its capacity as a shareholder of
Ashanti
"Governmental Authority" any national, supranational, state, provincial,
local or similar government, governmental,
regulatory or administrative authority,
self-regulating authority, agency, instrumentality
or commission or any court, tribunal or judicial
or arbitral body
"GSE" the Ghana Stock Exchange
"High Court" the High Court of Ghana
"JSE" the JSE Securities Exchange South Africa
"LSE" the London Stock Exchange plc
"Net Present Value" the value of the Company, the Company Subsidiaries
and Geita, taken as a whole, determined by using
the AngloGold Model
"No-Action Letter" a "no-action" letter from the Staff of the SEC
stating that, by reason of the exemption afforded
by Section 3(a)(10) of the Securities Act, the
Staff shall not recommend enforcement action to
the SEC with respect to the issuance of AngloGold
Shares without registration in the Scheme
"NYSE" the New York Stock Exchange, Inc.
"person" an individual, corporation, company, partnership,
limited partnership, joint venture, limited
liability company, syndicate, trust, association
or other entity or group that would be deemed to
be a person under Section 13(d)(3) of the Exchange
Act
"Record Time" 4:30 p.m., London time, on the business day
immediately preceding the Effective Time
"Registrar of Companies" the Registrar of Companies in Ghana appointed in
accordance with Section 328 of the Companies Code
"Registration Statement" a registration statement on Form F-4 (together
with any amendments or supplements thereto) to
register the AngloGold Shares to be issued
pursuant to the Scheme
"Scheme" a scheme of arrangement between the Company and
its members under Section 231 of the Companies
Code
"Scheme Meeting" any meeting of members of the Company convened by
order of the High Court pursuant to Section 231(1)
of the Companies Code
"Scheme Order" the order of the High Court confirming the Scheme
pursuant to Section 231(4) of the Companies Code
"SEC" the U.S. Securities and Exchange Commission
"Securities Act" the U.S. Securities Act of 1933, as amended
(together with the rules and regulations
promulgated thereunder)
"Share Exchange Ratio" an exchange ratio of 0.26 AngloGold Shares for
every Ashanti Share held or an equivalent number
of AngloGold ADSs
"Special Resolution" a special resolution of the members of the Company
under Section 22 of the Companies Code to approve
the amendment of the Regulations of the Company,
effective as of the Effective Time, to provide,
among other things, that (i) any Ashanti Shares
issued after the Record Time shall, provided the
Scheme has become effective, be immediately
transferred to AngloGold in consideration of and
conditional upon the issue of such whole number of
AngloGold Shares (rounded down to the nearest
whole share) equal to the number of Ashanti Shares
being transferred multiplied by the Share Exchange
Ratio, and (ii) the Company shall be converted
from a public company to a private company under
the Companies Code
"subsidiary" or " with respect to any person, any affiliate
subsidiaries" controlled by such person, directly or indirectly,
through one or more intermediaries
"Tameng" the Company's equity interest in Tameng Mining and
Exploration (Proprietary) Limited, Registration
No. 2001/001602/07
"Transaction" the business combination of AngloGold with Ashanti
"Transaction Agreement" the transaction agreement entered into between
AngloGold and the Company
"UKLA" the U.K. Listing Authority
"UKLA Listing Rules" the Listing Rules of the UKLA
END