ZUG, Switzerland, Nov. 18, 2019 /CNW/ - Katanga Mining
Limited (TSX: KAT) ("Katanga" or the "Company") announces that it
has filed with securities regulatory authorities in each of the
provinces and territories of Canada and obtained a receipt for a final
short form prospectus (the "Final Prospectus") in respect of the
previously announced offering of rights ("Rights") to purchase
common shares of the Company ("Common Shares") to
raise CDN$7,678,388,000 (the "Rights Offering").
Pursuant to the Rights Offering, all eligible shareholders of
Katanga (subject to applicable law) will receive one Right for
every Common Share held as of the close of business on November 22, 2019 (the "Record Date"). The Rights
Offering will include an additional subscription privilege
entitling holders of Rights who have fully exercised their Rights
to subscribe for additional Common Shares (the "Additional
Subscription Privilege"), if available, that are not otherwise
subscribed for under the Rights Offering.
In accordance with the rules of the Toronto Stock Exchange
("TSX"), and as provided in the standby purchase agreement entered
into between the Company and Glencore (the "Standby Purchase
Agreement"), the subscription price for the Common Shares upon
exercise of the Rights is CDN$0.1295
per Common Share (the "Subscription Price"), which represents a 25
percent discount to the volume weighted average price of the Common
Shares for the five trading days immediately prior to the date of
the Final Prospectus.
Each Right entitles an eligible shareholder to purchase
31.0858657370516 Common Shares (the "Basic Subscription
Privilege"). Where the exercise of Rights would otherwise entitle a
holder of Rights to receive fractional Common Shares, the holder's
entitlement will be reduced to the next lowest whole number of
Common Shares. The Company will not issue fractional Common Shares
or pay cash in lieu thereof.
The Rights will also entitle any shareholder who exercises in
full the Basic Subscription Privilege attached to their Rights to
subscribe for additional Common Shares not otherwise subscribed for
under the Rights Offering by other shareholders under their Basic
Subscription Privilege, pursuant to the Additional Subscription
Privilege. The period during which Rights may be exercised under
the Rights Offering will begin on midnight (Eastern time) on
November 22, 2019 (the "Record Date")
and end at 11:59 p.m. (Eastern time)
on December 17, 2019. Katanga has
received conditional approval to have the Rights listed for trading
on the TSX.
Glencore plc, together with its affiliates ("Glencore") has
agreed to accept the Rights Offering proceeds of CDN$7,678,388,000 or the equivalent in
Common Shares issued from treasury under the Rights Offering to
repay US$5.8 billion of debt owed to
Glencore (based on a five day average CDN$/US$ exchange rate as of
November 15, 2019, which is 1.32386).
Glencore, which owns approximately 86.3% of the Company's issued
and outstanding Common Shares, has provided a standby commitment
such that all Common Shares available for purchase under the Rights
Offering will be fully subscribed. The Company will use the
entirety of the proceeds of the offering to repay US$5.8 billion of debt owed to an affiliate of
Glencore under the Glencore Loan Facilities (as described below),
with approximately US$1.5 billion of
debt owed to Glencore ("Glencore Debt") being retained by the
Company. Accordingly, Glencore is not committing any new monies to
Katanga pursuant to the Rights Offering. The Offering will lead to
a reduction of the Glencore Debt by US$5.8
billion and a corresponding increase in Common Shares in
Katanga held by Glencore (or, to the extent that other shareholders
take up their Rights, repaying by cash to Glencore in respect of
the Glencore Debt).
Subject to applicable law, a certificate representing the Rights
issued, together with the Final Prospectus will be distributed to
all eligible registered shareholders who own Common Shares on the
Record Date along with instructions explaining the number of Common
Shares that can be purchased for those Rights, how to subscribe for
the purchase of Common Shares pursuant to those Rights or instruct
such shareholder's broker to subscribe for the purchase of Common
Shares on the shareholder's behalf, and how to sell Rights in the
market or otherwise transfer them to another party.
Further details concerning the Rights Offering, including the
terms of the Standby Purchase Agreement, are contained in the Final
Prospectus which is available under the Company's SEDAR profile. A
copy of the Standby Purchase Agreement is also available under the
Company's SEDAR profile accessible via at www.sedar.com.
Early Warning Disclosure
Glencore currently holds 1,646,613,928 Common Shares,
representing approximately 86.3% of the issued and outstanding
Common Shares.
Following completion of the Rights Offering, assuming (i)
holders of Rights take up their Basic Subscription Privilege in
full; and (ii) no holder of securities having any other right to
acquire Common Shares (including Glencore) exercises any such
right, following closing of the Rights Offering, Glencore would
acquire 51,186,419,486 additional Common Shares and as a result
Glencore would beneficially own, or exercise control or direction
over 52,833,033,414 Common Shares, representing approximately
86.3% of the 61,199,951,841 then issued and outstanding Common
Shares.
Assuming none of the holders of Rights, other than Glencore,
exercise their Basic Subscription Privilege and accordingly
Glencore acquires all of the Common Shares pursuant to the full
exercise of Rights under the Rights Offering, any additional Common
Shares subscribed pursuant to the Additional Subscription Privilege
and the standby commitment, following closing of the Rights
Offering, Glencore would acquire 59,292,571,428 Common Shares and
would be deemed to beneficially own, or exercise control or
direction over, 60,939,185,356 Common Shares representing
approximately 99.6% of the 61,199,951,841 then issued and
outstanding Common Shares. All such Common Shares acquired by
Glencore will be newly issued shares from treasury.
In the event that Glencore becomes the beneficial owner of 90%
or more of the Common Shares of Katanga, Glencore will be able to
take Katanga private without obtaining minority shareholder
approval pursuant to the exemption in section 4.6(1)(a) of
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions.
Glencore has no current intention to take Katanga private. Any
decision by Glencore to take Katanga private and the timing of any
such take private transaction or other action will depend on
various factors including Glencore's ongoing assessment of material
capital investment required to deliver on Kamoto Copper Company's
mine plan over the near-term and its evolving understanding of
material country risks including those arising from the fiscal
regime in the Democratic Republic of the
Congo (the "DRC"), the ability to effectively repatriate
cash from the DRC in the future as well as political conditions.
Glencore will weigh these factors from time to time to assess
whether Katanga's ability to obtain financing from outside sources
justifies the ongoing costs of maintaining its status as a listed
public company.
The head office of Katanga is Suite 300, 204 Black Street,
Whitehorse, Yukon, Y1A 2M9, Canada. The head office of Glencore is
Baarermattstrasse 3, CH-6340 Baar, Switzerland.
A copy of the early warning report corresponding to the above
can be obtained by contacting the persons named below and will be
filed on SEDAR at www.sedar.com.
This news release does not constitute an offer to sell, nor
the solicitation of an offer to buy, the securities in any
jurisdiction; nor shall there be any sale of securities mentioned
in this news release in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such
jurisdiction.
About Katanga Mining Limited
Katanga Mining Limited operates a major mine complex in the
Democratic Republic of Congo
producing refined copper and cobalt. The Company has the potential
to become Africa's largest copper
producer and the world's largest cobalt producer. Katanga is listed
on the Toronto Stock Exchange under the symbol KAT.
Forward Looking Statements
This press release may contain forward-looking statements.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or describes a "goal", or variation of such words and
phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
This press release may contain forward-looking statements. Often,
but not always, forward-looking statements can be identified by the
use of words such as "plans", "expects", or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or describes a "goal", or variation of such words and phrases or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
All forward-looking statements reflect the Company's beliefs
and assumptions based on information available at the time the
statements were made. Actual results or events may differ from
those predicted in these forward-looking statements. All of the
Company's forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions listed below. Although the
Company believes that these assumptions are reasonable, this list
is not exhaustive of factors that may affect any of the
forward-looking statements.
Forward-looking statements involve known and unknown risks,
future events, conditions, uncertainties and other factors which
may cause the actual results, performance or achievements to be
materially different from any future results, prediction,
projection, forecast, performance or achievements expressed or
implied by the forward-looking statements. Although Katanga has
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
The Company disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new
information, future events, or otherwise, except in accordance with
applicable securities laws.
SOURCE Katanga Mining Limited