Proceeds’ purpose includes growth: Wellesley-Wood
Durban Roodepoort Deep, Limited (“DRD” Ticker symbol; JSE: DUR; NASDAQ:DROOY) and the Investec Group have entered an agreement in terms of which Investec has secured an option to acquire 18 million new fully paid up DRD ordinary shares.
The option is an American-style call option with a strike price in US Dollars equal to 95% of the trade-weighted average price of DRD American Depository Receipts (ADRs) trading on NASDAQ for the 30 days prior to exercise date. The option carries an expiry date of 3 October 2003.
On the assumption that the option is exercised, DRD will apply the proceeds towards its general corporate funding requirements, including growth, according to Chairman and CEO Mark Wellesley-Wood.
“We are very pleased to have reached an agreement of this nature with a local institution such as Investec,” he said.
“Together with the success of our convertible rights offer in the United States late last year and strong institutional demand generally for DRD stock in the past quarter, it underscores the value of DRD’s mining assets and management capacity, and of the company’s restoration to fundamental operating and financial soundness.”
The agreement was as much a vote of confidence in the potential of the South African mining sector as a whole, as it was in DRD, Wellesley-Wood said.
“With local miners looking both to the challenges posed by the need for continued growth and meeting the requirements of South Africa’s Mining Charter, it is particularly encouraging to see growing investment support from local institutions,” he said.
Durban Roodepoort Deep, Limited
+27 11 381 7800 / 7826 (office)
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Chairman and CEO, Durban Roodepoort Deep
+27 11 381 7800 / 7809 (office)