Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — Merger or Acquisition (September 2003)
22 slides from Impala Platinum's merger presentation, Sep 18, 2003
Slide 1: Lonmin - Implats transaction
Lonmin - Implats transaction 18 September 2003 1
Slide 2: Lonmin PLC
LONMIN PLC LONMIN
Slide 3: Introduction
Introduction • Lonmin acquires 9.1% of Lonplats from Implats taking its holding to 82%. • Lonmin & Implats envisage a flagship BEE company holding 18% of Lonplats. Phase 1 equity requirements are expected to be exceeded. • Lonmin and Implats end joint control of Lonplats. • Support received from the
Slide 4: Current Structure
Current Structure Equal Board Current Lemon Representation Ice St t Lonmin Mkt. Cap: Impala Mkt. Cap: $2,096 MM $4,993 MM 27.6% 72.9% 72 .9% 27.1% 100% Ashanti Lemplats Iceplats and Lonplats Other Ice Look-Through (WPL/EPL) Assets Mkt. Cap: Value: $1,256 MM $2,583 MM 4
Slide 5: The Transaction
The Transaction The key parameters of the transaction are as follows: • Lonmin acquires 9.1% of Lonplats for a payment of $269 million. – Part of this payment is satisfied by Implats share of the final Lonplats dividend (est. ZAR 203m; c.$27 million). – Lonmin purchases 9.1% of Lonplats for a net pa
Slide 6: Structure Post Transaction
Structure Post Transaction Lemon Lonmin Ice Impala Post Mkt. Cap: Mkt. Cap: T i $2,096 MM $4,993 MM 50% 50% NewCo Sponsors’ Bank DebtEquity xx $231m rd Bank Debt & 3 $300 MM Party Equity $300m 27.6% 82.0% 18.0% 100% Ashanti Lemplats Iceplats and Lonplats xx Look-Through Other Ice (WPL/EPL) Assets Mk
Slide 7: Structure Post BEE Transaction
Structure Post BEE Transaction Lonmin Lemon HDSAs Ice Post BEE Transaction Mkt. Cap: Mkt. Cap: $2,096 MM $4,993 MM 51-100% 0-49% 0-24.5% 0-24.5% NewCo Bank Debt xx $300 MM 27.6% 82.0% 18.0% 100% Ashanti Lemplats Iceplats and xx Lonplats Look-Through Other Ice Mkt. Cap: ((WPL/EPL) Value: Assets $1,25
Slide 8: NewCo's Development
NewCo’s Development Lonmin and Implats are committed to delivering phases 1 & 2. Phase 1 Initial formation and funding of NewCo,enabling the unconditional acquisition by NewCo of 18% shareholding in Lonplats. Phase 2 The introduction of HDSA investors, an HDSA representative board and management. Th
Slide 9: Financial Implications
Financial Implications • Lonmin will fund its 9.1% interest in Lonplats and its equity in NewCo utilising existing senior debt facilities. • Gearing rises to 80%. Management are confident that this level is sustainable without impacting dividend/policy. • Our long term gearing target remains 30 - 40
Slide 10: Strategic Rationale
Strategic Rationale • The strategic benefits from removal of the joint control/Board, change of control and obtaining unfettered control of Lonplats with a direct 82% holding. • Enhances Lonmin’s Strategic flexibility. • The benefit of substantial progress towards a clear and Lonmin controlled route
Slide 11: Next Steps
Next Steps • Signing of legally binding agreements is expected prior to 31st December 2003, provided that: – Satisfactory NewCo finance is in place. – DME confirmation that equity credits will be forthcoming. • Lonmin to oversee NewCo. To commence BEE process immediately. • Related party transaction
Slide 12: Concluding Remarks
Concluding Remarks • Creative solution to the Implats/Lonplats stalemate. • Exciting BEE prospects with potential for real broad based empowerment. • Resolution of Lonmin’s structural complications in sight! 12
Slide 13: Lonmin – Implats transaction
Lonmin – Implats transaction 18 September 2003 13
Slide 14: Overview of the transaction
Overview of the transaction • Sale of 27.1% stake for US$800m • An amount of US$115.5m to be re-invested in Newco • The balance of US$684.5m to be paid to Implats on completion – end February 2004 • Premium of 20% to implied market value (60-day weighted average) • Transaction conditional on confirm
Slide 15: Cash flows
Cash flows Implats US$269m US$685m Lonmin US$116m of equity value US$300m US$115m US$115m Newco US$300m Banks 15
Slide 16: Strategic rationale
Strategic rationale • Release of value for shareholders’ benefit • No longer resource-constrained • Equity-accounted ounces can now be replaced through growth from mine-to-market ounces • Rationalisation of strategic holdings 16
Slide 17: Corporate structure
Corporate structure Implats 100% Mining Impala Refining Strategic holdings operations Services (IRS) Concentrate offtake Impala 100% agreements Platinum 27% Lonplats Marula 80%* Platinum Aquarius 25%+ 83% Platinum SA Barplats 45%# 83% Two Rivers Zimplats *20% allocated to BEE partnership 50% Mimosa
Slide 18: Pre-conditions to agreement and conditions precedent
Pre-conditions to agreement and conditions precedent Pre-conditions to binding agreement • Reasonable confirmation of BEE credits • Non-recourse debt financing for Newco Conditions precedent • Lonmin shareholder approval • Regulatory approval, including SA Competition Commission and SARB 18
Slide 19: Timing
Timing • 18 Sept 2003 – Announcement of non-binding MOU • By 31 December 2003 – binding agreements to be signed • Subject to standard conditions precedent • By 28 February 2004 – Completion of the transaction 19
Slide 20: Impact on Implats
Impact on Implats • Earnings slightly diluted in short-term • Growth profile remains unchanged Pt 000oz Potential upside from Zimbabwe 2500 2000 1500 1000 500 0 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 20
Slide 21: In conclusion
In conclusion • The transaction will release value for shareholders • Further simplify Implats’ corporate structure • Significant step in obtaining BEE equity credits • Generate cash to: • Fund growth of managed mine-to-market ounces • Excess cash to be returned to shareholders 21
Slide 22: Lonmin-Implats announcement 18 September 2003
Lonmin-Implats announcement 18 September 2003 22
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