Announcements 2020

Northam shareholders are advised that the company’s annual compliance report prepared pursuant to section 13(G)(2) of the Broad-Based Black Economic Empowerment Act No. 53 of 2003 is available on the company’s website: https://www.northam.co.za/downloads/send/148-governance/1336-northam-broad-based-bee-rating-2020-2021

Johannesburg
11 December 2020

Sponsor and Debt Sponsor
One Capital

1. INTRODUCTION

Northam shareholders (“shareholders”) are referred to the announcement dated 15 October 2020 (“previous announcement”) pertaining to the acquisition by Northam of preference shares in Zambezi Platinum (RF) Limited (“Zambezi”), (“Zambezi preference shares”).

Northam is pleased to announce that, since the date of the previous announcement, it has acquired 2 830 957 Zambezi preference shares and has agreed to acquire a further 13 829 788 Zambezi preference shares from a material shareholder as further detailed in paragraph 3 below, in aggregate amounting to 16 660 745 Zambezi preference shares and representing a total cash consideration of approximately R1.6 billion (“acquisition”). Following implementation of the acquisition, Northam will hold 128 569 993 Zambezi preference shares, representing approximately 80.4% of all Zambezi preference shares in issue.

2. RATIONALE FOR THE ACQUISITION

As stated in the previous announcement, Northam’s acquisition of Zambezi preference shares will reduce the preference share dividend expense and liability included in Northam’s consolidated financial statements, as well as Northam’s potential financial exposure under the guarantee it provided in favour of the holders of Zambezi preference shares (“Guarantee”). Furthermore, should Zambezi redeem the Zambezi preference shares through a distribution of ordinary shares in Northam (“Northam shares”) held by Zambezi, then the redemption of the Zambezi preference shares held by Northam at such time will result in a distribution of Northam shares to Northam, thereby reducing the number of Northam shares in issue.

3. SMALL RELATED PARTY TRANSACTION AND FAIRNESS OPINION

Northam reached an agreement with the Public Investment Corporation SOC Limited (“PIC”) to acquire 13 829 788 Zambezi preference shares from the PIC by no later than 9 December 2020 at a price of R95.37 per Zambezi preference share, for a total cash consideration of approximately R1.3 billion (“related party acquisition”).

The related party acquisition is not subject to any conditions precedent and will be fully funded from Northam’s internal cash resources.

The PIC is a material shareholder of Northam as defined in the JSE Limited Listings Requirements (“Listings Requirements”), in that, within the preceding 12 months, it has been able to exercise or control the exercise of votes in respect of 10% or more of the Northam shares in issue. Accordingly, the PIC is a related party to Northam as contemplated in paragraph 10.1(b)(i) of the Listings Requirements and the related party acquisition is categorised as a “small related party transaction” in terms of paragraph 10.7 as read with paragraph 10.8 of the Listings Requirements.

In terms of paragraph 10.7 of the Listings Requirements, the related party acquisition is not subject to shareholder approval, provided an independent professional expert confirms that the terms of the related party acquisition are fair as far as shareholders are concerned. Northam has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the independent professional expert for purposes of providing an opinion in respect of the fairness of the related party acquisition (“fairness opinion”).

BDO has considered the terms and conditions of the related party acquisition and is of the opinion that the related party acquisition is fair to shareholders. A copy of the fairness opinion is available for inspection for a period of 28 days from the date of this announcement, at Northam’s registered office being, Building 4, 1st Floor, Maxwell Office Park, Magwa Crescent West, Waterfall City, Jukskei View.

5. DETAILS OF THE ZAMBEZI PREFERENCE SHARES

The Zambezi preference shares are cumulative, non-participating redeemable preference shares which accrue dividends at a nominal rate equal to the South African prime interest rate plus 3.5%, calculated on a daily basis, based on a 365-day year, compounded annually. The Zambezi preference shares were listed on the securities exchange operated by the JSE Limited on 11 May 2015.

Subject to certain exceptions, the Zambezi preference shares are redeemable on 17 May 2025 and will be redeemed, at Zambezi’s election, in cash and / or through the distribution of Northam shares held by Zambezi. The redemption of the Zambezi preference shares is secured by the Guarantee and if the Guarantee is called upon, Northam will, at its election, settle the associated liability using cash and / or through the issue of new Northam shares.

As reported in the annual financial statements of Northam for the year ended 30 June 2020, the Zambezi preference share liability amounted to approximately R8.3 billion and the accumulated preference share dividends for the financial year amounted to approximately R1.1 billion. As mentioned above, the acquisition by Northam of Zambezi preference shares will further reduce the Zambezi preference share liability and accumulated preference share dividends which are recognised in Northam’s consolidated financial statements. The accounting policies adopted by Northam in the preparation of its annual financial statements are in accordance with the International Financial Reporting Standards.

Paul Dunne, Northam’s Chief Executive Officer said “Northam is pleased to return a further R1.6 billion of value to shareholders through the purchase of Zambezi preference shares, increasing Northam’s holding to approximately 80.4%. Northam acquiring more than 80% ownership of Zambezi preference shares represents a very significant step in pursuit of the company’s previously stated intention to accelerate the maturity of the Zambezi Transaction, as announced on 2 November 2020. This strategy continues to positively impact future earnings and shareholder value creation.”

Johannesburg
8 December 2020

Corporate Advisor, Sponsor and Debt Sponsor to Northam
One Capital

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Independent Professional Expert to Northam
BDO Corporate Finance Proprietary Limited

Northam is pleased to announce that it has completed a private placement of domestic medium term notes (“Notes”) to the value of R1.33 billion (“New Notes”) in a bookbuild under Northam’s R15 billion Domestic Medium Term Note Programme (dated 29 October 2020, as amended and / or supplemented from time to time) (“Programme”). The bookbuild was oversubscribed by 33%.

The New Notes were issued today, 25 November 2020, on the Interest Rate Market of the JSE Limited, primarily as tap issuances under the following bond series: NHM011, NHM014, NHM016, NHM018 and NHM019 (“Existing Bond Series”) as well as issues under new bond series NHM020 (“New Bond Series”).

The New Notes issued under the Existing Bond Series attract floating rate coupons between 2.50% and 4.25% per annum above the 3 month ZAR-JIBAR, with interest payable quarterly, as detailed in previously published SENS announcements.

The New Notes issued under the New Bond Series mature on 25 November 2023 (R132 million) and attract a floating rate coupon of 3.75% per annum above the 3 month ZAR-JIBAR with interest payable quarterly.

The New Notes issued under the Existing Bond Series and the New Bond Series have a staggered maturity profile, maturing within the next 12 months (R10 million), 18 months (R345 million), 30 months (R253 million), 36 months (R132 million), 42 months (R390 million) and 54 months (R200 million) from the date of issue.

The proceeds from the issuance of the New Notes will be applied towards replenishing Northam’s cash reserves utilised in the course of Northam’s ongoing acquisition of preference shares in Zambezi Platinum (RF) Limited, including as published on SENS on 15 October 2020.

Furthermore, pursuant to the announcement published on SENS on 28 October 2020 pertaining to the partial capital redemption of Notes under bond series NHM017, Northam is pleased to announce that, on 30 October 2020, it completed a R492.1 million note switch, effectively extending the maturity date of certain Notes issued under bond series NHM017, maturing on 26 February 2021. This was achieved through the purchase and cancellation of such Notes and the simultaneous issue of new Notes to the same Note holders as a second tranche under bond series NHM012, maturing on 13 June 2022, for the same aggregate nominal amount (“Note Switch”). The NHM012 series Notes have a floating interest rate of 3.75% per annum above the 3 month ZAR-JIBAR, with interest payable quarterly.

Following the placement of the New Notes, the total nominal value of Notes in issue under the Programme amounts to c. R7.13 billion.

The combination of the placement of the New Notes and the Note Switch provides significant additional balance sheet flexibility for Northam.

Paul Dunne, Northam’s Chief Executive Officer said “Northam is pleased to have such strong investor support for our DMTN Programme. This continues to support Northam’s growth strategy and simultaneously allows the Company to accelerate the return of value to shareholders.”

Johannesburg
25 November 2020

Corporate Advisor and JSE Sponsor to Northam
One Capital

Sole Arranger, Dealer and Debt Sponsor to Northam in respect of the Programme
One Capital

Attorneys to Northam
Cliffe Dekker Hofmeyr Inc.

Legal Advisors to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

The JSE Limited (“JSE”) has granted approval for the listing of NHM020 Senior Unsecured Floating Rate Notes (“Notes”) issued under the Northam Platinum Limited ZAR15 000 000 000 Domestic Medium Term Note Programme, dated 29 October 2020, as amended and/or supplemented from time to time (“Programme”), as guaranteed by Booysendal Platinum Proprietary Limited, with effect from 25 November 2020.

The details pertaining to the issue of NHM020 are as follows:

The Notes will be immobilised in the Central Securities Depository (CSD) and settlement will take place electronically in terms of JSE Rules.

Johannesburg
24 November 2020

Sole Arranger, Dealer and Debt Sponsor to Northam in respect of the Programme
One Capital

Attorneys to Northam, the Arranger and the Dealer in respect of the Programme
Bowman Gilfillan Inc.

Northam bondholders are advised of the following interest payments due on Wednesday, 25 November 2020:

Johannesburg
20 November 2020

Debt Sponsor
One Capital