SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2003.
ASHANTI GOLDFIELDS COMPANY LIMITED
(Translation of Registrant's Name Into English)
Gold House, Patrice Lumumba Road
Roman Ridge, P.O. Box 2665
Accra, Ghana
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F [X] Form 40-F [ ]
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes [ ] No [X]
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_____.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 5, 2003 ASHANTI GOLDFIELDS COMPANY LIMITED
By: /s/ Ernest Abankroh
------------------------------
Name: Ernest Abankroh
Title: Company Secretary
(ANGLOGOLD LOGO) (ASHANTI GOLDFIELDS COMPANY LIMITED LOGO)
ANGLOGOLD LIMITED ASHANTI GOLDFIELDS COMPANY LIMITED
(Registration number 1944/017354/06) (Registration number 7094, ARBN 074370862)
(Incorporated in the Republic of (Incorporated in Ghana)
South Africa) ISIN : GH0000000029
ISIN : ZAE000043485 GSE Share Code : AGC
JSE Share Code : ANG ("Ashanti")
("AngloGold")
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
SUMMARY
4 August 2003
PROPOSED MERGER OF ANGLOGOLD LIMITED AND ASHANTI GOLDFIELDS
COMPANY LIMITED
STRATEGIC COMBINATION WILL CREATE GROWTH FOCUSED, LEADING GLOBAL GOLD PRODUCER
WITH LARGEST RESERVES IN THE GOLD INDUSTRY
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"). AngloGold and Ashanti have therefore entered into
a transaction agreement ("Transaction Agreement") to implement the Merger.
Lonmin Plc, which owns 27.6% of Ashanti's issued ordinary share capital, has
agreed to support the Merger. The combined group will be known as AngloGold
Ashanti Limited and will trade as Ashanti AngloGold in Ghana.
Commenting on the Merger today, Bobby Godsell, Chief Executive Officer of
AngloGold, said:
"This combination will create a growth focused, leading global gold producer,
with the largest reserve base in the industry. Ashanti brings to AngloGold a
portfolio of complementary top-tier, low-cost and long-life gold mines, as well
as attractive exploration opportunities in one of the key gold producing regions
of the world. We can work effectively together, using AngloGold's existing
financial and technical resources, to maximise the upside potential of this
combination, particularly in relation to the deep level underground development
of the Obuasi mine. We are pleased that the Government of Ghana has appointed a
consortium of advisers, led by Societe Generale, to assist the Government in its
consideration of the proposed Merger and would hope to have clarity on the views
of the Government by mid-September."
Sam Jonah, Chief Executive of Ashanti, said:
"AngloGold and Ashanti are synonymous with excellence in gold mining. The
combined strength of the new group will unleash a new African giant on the gold
mining industry. The immense technical and financial strengths of the new group
will enable the realisation of the full potential of the Obuasi mine in the
shortest possible time frame."
RATIONALE FOR THE MERGER
The combined group will have 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 underground 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
sale 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)
2
- 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
The Merger is expected to be accretive to headline earnings per share before
unrealised non-hedge derivatives for holders of AngloGold ordinary shares
("AngloGold Shares") and AngloGold American Depositary Shares ("AngloGold ADSs")
(together, the "AngloGold Shareholders") from completion of the Merger. It 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.
TERMS OF THE MERGER
The Merger will be effected by means of a scheme of arrangement (the "Scheme")
between Ashanti and its shareholders under 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 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 SHARES; or
- 0.26 ANGLOGOLD ADSS
for each Ashanti Share or Ashanti GDS ("Exchange Ratio")
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
- 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
3
- 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 basis 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 AngloGold Shareholders will own
approximately 87% and existing Ashanti Shareholders will own
approximately 13% of the combined group
- 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
- AngloGold has received an undertaking from Ashanti's largest
shareholder, Lonmin Plc, holder of 27.6% of Ashanti's issued
ordinary share capital, to vote in favour of and support the Merger
- Ashanti's head office in Accra, Ghana, will enjoy an expanded role
within the combined group's operations
- 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
- 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 shares and Ghanaian depositary
shares of the combined group on the Ghana Stock Exchange where the
combined group will trade as Ashanti AngloGold
- CIBC World Markets plc, Ashanti's financial adviser, has delivered
to the board of directors of Ashanti its written opinion that the
Exchange Ratio is fair to the Ashanti Shareholders from a financial
point of view
- The board of directors of Ashanti has approved the Merger and will
recommend that all holders of Ashanti Shares and Ashanti GDSs vote
in favour of the resolutions to be proposed to implement the Merger
- 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
Societe Generale, in order to assist it in this process. The Merger
is conditional on receiving undertakings by 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. The Transaction Agreement will terminate if
these conditions are not satisfied (or waived by AngloGold) on, or
4
before, 30 September 2003 or such later date as may be agreed by
Ashanti and AngloGold. In addition, completion of the Merger is
conditional on, amongst other things, the approval of the Merger by
Ashanti Shareholders, receipt of other regulatory approvals (in
addition to the approvals from the Government of Ghana referred to
above), third party consents and the confirmation of the Scheme by
the High Court of Ghana
- AngloGold and Ashanti hope to receive the views of the Government of
Ghana in relation to the Merger by mid-September. Further
announcements, which will include details regarding the timetable
for the implementation of the Merger, will be made in due course
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.
This summary should be read in the context of the full announcement.
AngloGold's JSE Sponsor : UBS
5
For further information contact:
ANGLOGOLD ASHANTI
Steve Lenahan +2783 308 2200 Kweku Awotwi +233 21 77 2331
Peta Baldwin +27 11 637 6647 Corinne Gaisie +44 20 7256 9938
Charles Carter +1 212 750 7999
Tomasz Nadrowski +44 7958 749555
+1 917 912 4641
Andrea Maxey +61 8 9425 4604
UBS INVESTMENT BANK CIBC WORLD MARKETS
James Hartop +44 20 7567 8000 Andy Quinn +44 20 7234 6000
FIRST AFRICA
Kofi Adjepong-Boateng +27 11 327 3666
CITIGATE SARD VERBINNEN GOLIN/HARRIS INTERNATIONAL
(US Media) (US investors and Media)
Paul Verbinnen +1 212 687 8080 Kevin Kirkeby +1 212 697 9191
CITIGATE DEWE ROGERSON GRANDFIELD
(UK Media) (UK investors and Media)
Patrick Donovan +44 20 7638 9571 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 REGARDING 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
6
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.
Chester Crocker, Lynda Chalker and Edward Haslam, being Directors of Ashanti,
have not taken part in the deliberations of the board of directors of Ashanti
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.
The statement that the Merger is expected to be accretive to headline earnings
per share before unrealised non-hedge derivative adjustments and, in due course,
cash flow per share for AngloGold Shareholders should not be interpreted to mean
that headline earnings per share before unrealised non-hedge derivative
adjustments or 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.
7
(ANGLOGOLD LOGO) (ASHANTI GOLDFIELDS COMPANY LIMITED LOGO)
ANGLOGOLD LIMITED ASHANTI GOLDFIELDS COMPANY LIMITED
(Registration number 1944/017354/06) (Registration number 7094, ARBN 074370862)
(Incorporated in the Republic of (Incorporated in Ghana)
South Africa) ISIN : GH0000000029
ISIN : ZAE000043485 GSE Share Code : AGC
JSE Share Code : ANG ("Ashanti")
("AngloGold")
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
4 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
8
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
9
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
10
- 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
11
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 Societe Generale, 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):
12
- 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,
13
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 2003 BEFORE THE AFTER THE PERCENTAGE
AND AS AT 30 JUNE 2003 MERGER MERGER CHANGE
(US CPS) (US CPS) (%)
--------------------------------------------------------------------------------
Net asset value per share (1) 728 1,060 46
Net tangible asset value per share (1) 549 808 47
EBITDA per share (2) 152 156 3
Headline earnings per share before
unrealised non-hedge derivatives (2) 63 54 (14)
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
14
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.
15
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
16
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
4 August 2003
AngloGold's JSE Sponsor: UBS
17
For further information contact:
ANGLOGOLD ASHANTI
Steve Lenahan +27 83 308 2200 Kweku Awotwi +233 21 77 2331
Peta Baldwin +27 11 637 6647 Corinne Gaisie +44 20 7256 9938
Charles Carter +1 212 750 7999
Tomasz Nadrowski +44 7958 749555
+1 917 912 4641
Andrea Maxey +61 8 9425 4604
UBS INVESTMENT BANK CIBC WORLD MARKETS
James Hartop +44 20 7567 8000 Andy Quinn +44 20 7234 6000
FIRST AFRICA
Kofi Adjepong-Boateng +27 11 327 3666
CITIGATE SARD VERBINNEN GOLIN/HARRIS INTERNATIONAL
(US Media) (US investors and Media)
Paul Verbinnen +1 212 687 8080 Kevin Kirkeby +1 212 697 9191
CITIGATE DEWE ROGERSON GRANDFIELD
(UK Media) (UK investors and Media)
Patrick Donovan +44 20 7638 9571 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.
18
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.
19
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;
20
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 concerning
the control of concentrations between undertakings,
as amended (the "EC Merger Regulation"); or
(ii) 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
(iii) 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,
21
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;
22
(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:
23
(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
24
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;
25
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.
26
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.
27
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
28
"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 Schedule" the Company Disclosure Schedule attached
to the 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)
29
"Company Material Adverse Effect" any event, circumstance, change or effect
(not 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 Meeting" the extraordinary general meeting of the
members 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
30
"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
31
"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 "subsidiaries" with respect to any person, any affiliate
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
32