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Platinum miner Impala Platinum (Implats) has issued 1.0% convertible bonds due February 2018 in a nominal amount of US$200 million and issued 5.0% convertible bonds due February 2018 in a nominal amount of R2.672 billion by way of concurrent accelerated bookbuild offerings.

The convertible bonds are currently cash-settled instruments. In order for Implats to settle the convertible bonds through the issue of new Implats ordinary shares, a specific authority is being sought from shareholders for the issue of a maximum of 30 million new ordinary shares upon conversion of the convertible bonds.

Implats says it intends to use the net proceeds from the issue of the convertible bonds for general corporate purposes with a primary focus on funding strategic projects in the Rustenburg lease area.

The issue of the convertible bonds forms part of Implats’ strategy to maintain a strong financial position and secure funding given the current global economic environment and the operating environment in the South African mining sector.

Implats has also advised that a general meeting of shareholders will be held in order for shareholders to approve the proposed resolution. If shareholders do not approve the proposed resolution, the convertible bonds will remain subject to cash settlement.

The company warned that cash settlement of the convertible bonds will require significant cash reserves, which could constrain Implats ability to pursue new business opportunities, invest in existing and new projects, fund ongoing business activities, retire or service outstanding debt and pay dividends, all of which could adversely affect its results of operations and financial condition.

Subject to the approval of the proposed resolution, the convertible bonds will be convertible into ordinary shares at an initial conversion price of US$24.13 and R214.90 for the US$- and ZAR-denominated convertible bonds respectively, representing a 35% premium to the reference share price of US$17.8684 and R159.1792, respectively.

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