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Neal Froneman, Sibanye-Stillwater CEO

Sibanye Gold Limited has launched an offering of US$450 million senior unsecured guaranteed convertible bonds due 2023. 

The proceeds are expected to be used to refinance the outstanding portion of the bridge loan raised for the acquisition of Stillwater Mining Company.

The Convertible Bonds will be issued by Sibanye-Stillwater on 26 September 2017 and payments in respect of the Convertible Bonds will be guaranteed by Stillwater and Kroondal Operations Proprietary Limited.

The Convertible Bonds are expected to pay a coupon of between 1.625% and 2.375% per annum, payable semi-annually in arrear in equal instalments on 26 March and 26 September of each year.

The initial conversion price is expected to be set within a premium range of 30% to 35% above the volume weighted average price of Sibanye-Stillwater’s shares on the Johannesburg Stock Exchange (“JSE”) between opening of trading today, 19 September 2017 and pricing which is expected later
today.

The conversion price will be subject to customary adjustments pursuant to the terms and conditions of the Convertible Bonds.

The conversion price will be adjusted for any dividends paid.

The Convertible Bonds, subject to the receipt of the requisite approval by a general meeting of the shareholders of Sibanye-Stillwater on or before 31 May 2018, will be convertible into new and/or
existing shares of Sibanye-Stillwater, cash or a combination thereof pursuant to the terms and conditions of the Convertible Bonds.

Absent such approval, holders of the Convertible Bonds will on conversion receive a cash amount equal to the value of the underlying Ordinary Shares.

For so long as the Shareholder Resolutions have not been approved, Sibanye-Stillwater reserves the right to redeem all but not some of the Convertible Bonds at the greater of 102% of their principal value, or 102% of their fair market value, in each case plus accrued interest.

The Convertible Bonds will be issued at 100% of their principal amount, for example $200,000 per Convertible Bond. Unless previously redeemed, converted or purchased and cancelled, the Convertible Bonds will be redeemed at their principal amount on or around 26 September 2023.

Sibanye-Stillwater will have the option to redeem all but not some of the Convertible Bonds at their
principal amount (plus accrued but unpaid interest) in accordance with the terms and conditions of the Convertible Bonds at any time on or after 17 October, 2020, if the value of the Ordinary Shares underlying a Convertible Bond is equal to or exceeds US$260,000 for a specified period of time, or if 15% or less of the aggregate principal amount of the Convertible Bonds remains outstanding, all as more fully described in the terms and conditions of the Convertible Bonds.

 

“The Convertible Bond offering is the final step in refinancing the acquisition bridge facility and is complementary to our envisaged long-term capital structure. While we considered various financing options, convertible bonds offer the greatest flexibility at a reasonable cost, which will assist us to delever our balance sheet, consistent with our long-term target of 1xNet debt EBITDA,” says Neal Froneman, Sibanye-Stillwater CEO. 

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