JOHANNESBURG (miningweekly.com) – The Johannesburg Stock Exchange (JSE) has granted platinum mining company Royal Bafokeng Platinum (RBPlat) approval for the listing of R1.2-billion 7% senior unsecured convertible bonds.

The bonds will be listed on the main board of the JSE with effect from the start of business on April 20.

RBPlat intends to use the net proceeds from the issue of the convertible bonds to fund the next phase of the ramp-up of the Styldrift I expansion project from 50 000 t/m to 150 000 t/m by the end of 2018.

“This level of production secures the optimal level of Merensky production for RBPlat in a platinum group metals environment faced with future uncertainty, without the company incurring significant expenditure that would be required for a further processing plant and infrastructure development to process production,” RBPlat noted in a circular on Wednesday.

The bonds listed will include 120 000 units of R10 000 each, which will be traded on the JSE’s equity trading platform. The maturity date for the bonds is March 16, 2022.

The convertible bonds may be traded by or through members of the JSE in accordance with the rules and operating procedures of the JSE.

The clearing and settlement of trades on the JSE shall take place in accordance with the electronic clearing and settlement procedures of the JSE and Strate.

Final positions for transfer will be determined on the record date, which is April 13.

The convertible bonds are currently cash-settled instruments. For RBPlat to settle the bonds through the issue of new RBPlat ordinary shares, the company is seeking authority from shareholders for the issue of a maximum of 35-million new RBPlat shares upon conversion of the convertible bonds.

Subject to obtaining the authority, the convertible bonds will be convertible into RBPlat shares at an initial conversion price of R42.94, representing a 30% premium to the reference share price of R33.03, RBPlat stated in a circular on Wednesday.

At the initial conversion price, the number of RBPlat Shares to be issued upon conversion of the convertible bonds will be 27.9-million RBPlat shares, representing 14.3% of the number of existing RBPlat shares in issue as at March 31.

The terms and conditions provide that the conversion price will be adjusted on the occurrence of certain events, which include dividend payments, payments to shareholders and where buybacks are done at more than a 5% premium to the closing prices of the five trading days prior to the buyback.

If such adjustments result in a reduction of the conversion price, the number of RBPlat shares to be issued in the event of a conversion of the convertible bonds will be increased, the company noted.