Northam Platinum Holdings Limited (JSE:NPH) entered into a sale of shares agreement to acquire 32.8% stake in Royal Bafokeng Platinum Limited (JSE:RBP) for ZAR 16.9 billion on November 9, 2021. Pursuant to the terms of the agreement, Northam Platinum Holdings Limited shall acquire 93.9 million Royal Bafokeng Platinum Limited shares at around ZAR 180.50 per share. The purchase consideration will be settled through a combination of the issue of ordinary shares in the share capital of Northam Platinum Holdings Limited (“Northam Holdings Shares”) and cash.

An upfront consideration, to be settled on the acquisition implementation date, comprising: 34.4 million Northam Holdings Shares, which Northam Holdings Shares will be listed on the Main Board of the exchange operated by the JSE Limited (“JSE”) (“Share Consideration”); and ZAR 3 billion settled in cash. A deferred cash consideration of approximately ZAR 5.6 billion (“Deferred Acquisition Consideration”) of which: ZAR 4 billion (to be adjusted) will become payable by no later than April 30, 2022; and approximately ZAR 1.6 billion (to be adjusted) will become payable by no later than September 30, 2022, (collectively, the “Acquisition Consideration”). The parties have entered into a put and call option arrangement in terms of which Northam Platinum Holdings Limited may acquire a further 0.5% of the Royal Bafokeng Platinum Limited net shares for a purchase consideration of ZAR 135 per Royal Bafokeng Platinum Limited share.

Should the option be exercised in full, Northam Platinum Holdings Limited will acquire 33.3% of Royal Bafokeng Platinum Limited net shares in aggregate. In addition to the transaction, RBH will endeavour to procure that, inter alia, Emikaway (RF) Proprietary Limited (“EMI”), a wholly owned subsidiary of RBH, (i) enters into a put and call option arrangement with Northam in terms of which Northam may acquire an additional 1.6% of the RBPlat Net Shares (“EMI Put and Call”); and (ii) grants Northam a right of first refusal over a further 1.2% of the RBPlat Net Shares, representing the remaining RBPlat Shares held by the RBH group. The EMI Put and Call will enable Northam to increase its total holding of the RBPlat Net Shares up to 34.9% in aggregate (i.e. the Acquisition Shares and RBPlat Shares acquired pursuant to the exercise, in full, of the RBIH Put and Call and the EMI Put and Call, excluding any RBPlat Shares acquired pursuant to the right of first refusal).

With effect from the Acquisition Implementation Date, and for so long as Northam holds RBPlat Shares and RBH or any of its subsidiaries holds Northam Holdings Shares, Northam Holdings will procure that a nominee of RBH; or if RBH or any of its subsidiaries ceases to hold Northam Holdings Shares, RBPlat conducts mining operations on land owned by the Royal Bafokeng Nation (“RBN”), Northam Holdings will procure that a nominee of the RBN, is appointed as a director of Northam Holdings (“Board Appointment”). The Board Appointment will be subject to (i) the nominee being reasonably acceptable to Northam Holdings' directors; and (ii) confirmation by the shareholders of Northam Holdings (“Shareholders”) in accordance with the JSE Limited Listings Requirements (“JSE Listings Requirements”). Further details regarding the above mentioned appointment will be published in due course.

The transaction is not subject to any conditions precedent. Northam Holdings will acquire the acquisition shares on November 19, 2021 (“Acquisition Implementation Date”). Webber Wentzel acted as legal advisor to Northam Platinum Holdings Limited.