Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — Merger or Acquisition (March 2021)
29 slides from Northam Platinum's merger presentation, March 2021
Slide 1: Proposed transaction to accelerate maturity of the Zambezi BEE transaction
Proposed transaction to accelerate maturity of the Zambezi BEE transaction and extend HDP ownership for the next 15 years www.northam.co.za Page
Slide 2: Disclaimer
Disclaimer The following presentation comprises any written materials made available together with the related verbal presentation (collectively or individually, as the context may require, the "Presentation"). By attending the Presentation and/or viewing the Presentation you agree to be bound by th
Slide 3: Introduction
Introduction • Northam is pleased to announce the proposed: ‒ early maturity of the BEE transaction initially concluded between Northam and Zambezi in May 2015; and ‒ implementation of an extended BEE transaction for the next 15 years with an emphasis on Northam’s employees and host and affected com
Slide 4: Zambezi BEE transaction
Section 1 Zambezi BEE transaction www.northam.co.za Page 4
Slide 5: Key highlights of the Zambezi BEE transaction
Key highlights of the Zambezi BEE transaction in May 2015 c. 31.4% 10 year Landmark BEE transaction HDP ownership lock-in period in 2015 R4.2bn ZPLP instrument Communities, Employees and (funded by way of Zambezi net capital raised to Strategic Partners issuing ZPLPs listed pursue growth initiatives
Slide 6: Overview of the May 2015 Zambezi BEE transaction
Overview of the May 2015 Zambezi BEE transaction A Subscription for ZPLPs issued by Zambezi B Exchange NHM shares held by the PIC for ZPLPs Zambezi ZPLP Zambezi ZPLP shareholders holders shareholders holders 1 Zambezi issued R4.6bn c. 112.2m ZPLPs Zambezi issued c. 47.7m cash at R41 each ZPLPs at R4
Slide 7: Current Northam group structure
Current Northam group structure Strategic 74.5% Partners Northam 9.6% Zambezi ZPLP 87.5% ESOP Trust shareholders holders Other Community 15.9% ZPLP holders 12.5% Trusts Other Northam shareholders 68.6% 31.4% Zondereinde mine Beneficiation 100.0% 100.0% 100.0% Booysendal Eland Other Booysendal mine E
Slide 8: Potential for significant value unlock for BEE shareholders
Potential for significant value unlock for BEE shareholders c. R 25.6bn gross value has been created in Zambezi as at 19 March 2021 c. 497% Value of Northam shares held growth in the Northam by Zambezi • 159 905 453 Northam shares R39.1bn share price since • R244.76 (closing NHM share inception of t
Slide 9: Key risks associated with the Zambezi BEE transaction's original maturity date
Key risks associated with the Zambezi BEE transaction’s original maturity date Singularity risk Sell-side pressure BEE risk Adverse market events Large volume of No certainty regarding near or at maturity date Northam shares potentially compliance with HDP could erode value in entering the market in
Slide 10: ZPLP acquisition strategy
ZPLP acquisition strategy Northam embarked on a strategy to return value to its Significant value return to shareholders shareholders through the acquisition of ZPLPs Mitigates Northam’s exposure under the Northam guarantee 87.5% c. 140m ZPLP ownership ZPLPs acquired ZPLP to date Decreases the ZPLP
Slide 11: Proposed composite transaction
Section 2 Proposed composite transaction www.northam.co.za Page 11
Slide 12: Key objectives of the proposed composite transaction
Key objectives of the proposed composite transaction 1 Secure Permanently secure, unlock & transfer unencumbered value Component A: value created within Zambezi Accelerate maturity of the Zambezi BEE 2 Mitigate Optimise the maturity structure of the Zambezi BEE transaction by transaction maturity pr
Slide 13: Component A highlights
Component A highlights 1 c. R 26bn R5.3bn R4.8bn R2.0bn gross value unlock capital invested to tax windfall for SARS 2 offer by Northam to in Zambezi buy-back Northam purchase all remaining shares from Zambezi ZPLPs not held by Northam In excess of Conditional 13bn 25% Extinguish pro rata c. R repay
Slide 14: Component B highlights
Component B highlights c. 26.5% R33.1bn 15 year effective HDP share issuance to BEE term of HDP ownership ownership in the participants 1 credentials secured, with an Northam group option to accelerate after 5 years Close to New holding 10 000 company Northam employees, as well as established to ena
Slide 15: Component A: Accelerated maturity of the Zambezi BEE transaction
Section Component A 3 Accelerated maturity of the Zambezi BEE transaction www.northam.co.za Page 15
Slide 16: Component A overview
Component A overview • Northam acquires the remaining ZPLPs at a 15.99% premium to the Acquisition and ZPLP Face Value, for cash. settlement of • Zambezi settles all ZPLPs with a premium amounting to approximately the ZPLPs 11.11%, through a transfer of Northam shares from Zambezi to Northam, valued
Slide 17: R12.9bn value realisation for Zambezi shareholders
R12.9bn value realisation for Zambezi shareholders 1 R767m cash distribution Northam shares distributed to Zambezi shareholders No. of % of Northam Unit Northam shares in shares issue Held by Zambezi 159.9m 31.4% R4.6bn Less: R12.9 bn tax liability pre-tax value Transferred to settle ZPLPs (93.9m) (
Slide 18: Significant reduction in NHM's issued share capital
Significant reduction in NHM’s issued share capital 1 Northam shares transferred by Zambezi to settle ZPLPs In excess of 25% 93.9m 18.4% R160 share buy-back Northam shares of Northam shares settlement price per by Northam from in issue Northam share 2 Zambezi Northam shares bought back by Northam fr
Slide 19: Transaction capital invested by Northam
Transaction capital invested by Northam 1 ZPLP acquisitions c. R14.0bn 73% c. R9.2bn of total additional value created for capital invested to acquire transaction capital Northam shareholders all ZPLPs in issue 2 Northam share buy-back c. R5.3bn 27% c. R3.3bn of total additional value created for ca
Slide 20: Voluntary extension of the management share incentive plan
Voluntary extension of the management share incentive plan to retain key individuals • At the request of shareholders, Northam introduced a share incentive plan on implementation of the Zambezi BEE transaction in 2015. • The objective of the plan is to align the interests of Northam management and s
Slide 21: Component B: Implementation of an extended BEE transaction
Section Component B 4 Implementation of an extended BEE transaction www.northam.co.za Page 21
Slide 22: Rationale for Component B
Rationale for Component B Mining Charter • The introduction of Northam Platinum Holdings provides flexibility to compliance comply with current and future Mining Charter requirements. Structural optionality • Northam provides HDP ownership for existing mining rights. for future transactions • Northa
Slide 23: Structural optionality for future transactions / empowerment
Structural optionality for future transactions / empowerment Northam Platinum Holdings Existing mining rights New mining rights >26% >30% Employees 5% carried interest New mining Host rights communities 5% carried interest Zondereinde and beneficiation operations 100% 100% 100% BEE entrepreneurs 20%
Slide 24: Illustration of Component B
Illustration of Component B Preference share subscription Other Northam HDP Vehicle shareholders c. 26.5% 95.4% Minimum of 4.6% Northam Platinum Holdings share subscription effective HDP interest in Northam Northam Platinum Holdings 77.0% Northam Platinum Holdings will be Up to 23.0% collective inte
Slide 25: Transaction parameters / transaction funding
Transaction parameters / transaction funding Anticipated On or about the implementation date of Component A implementation date Introduction of Northam Platinum Acquisition of Northam shares via a share for share transaction on a 1:1 basis Holdings Empowerment 15 years, option for Northam to acceler
Slide 26: Next steps
Section 5 Next steps www.northam.co.za Page 26
Slide 27: Shareholder support obtained to date
Shareholder support obtained to date c. 58.2% c. 97.4% 74.5% Support obtained from Support obtained from Support obtained from Northam ZPLP holders 2 Zambezi shareholders 1 shareholders Notes: 1. Northam shareholder support amounts to c. 39% excluding Zambezi. www.northam.co.za Page 27 2. ZPLP holde
Slide 28: Next steps
Next steps The timeline below is indicative It is subject to timing associated with securing the necessary regulatory approvals April – May – July 2021 May 2021 June 2021 onwards • Finalisation and • Shareholder meetings • Regulatory approvals distribution of and approvals: • Phased transaction shar
Slide 29: Contact details and shareholder information
Contact details Building 4, 1st Floor Maxwell Office Park Magwa Crescent West Waterfall City Shareholder information Jukskei View 2090 Name Northam Platinum Limited South Africa Share code NHM Tel: +27 11 759 6000 ISIN code ZAE000030912 Fax: +27 11 325 4795 JSE sector Platinum Shares in issue 509 78
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