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DATE 13 MAY 2002
NUMBER 29/02
BHP Billiton today announced that it has lodged documents relating to the
demerger of BHP Steel Limited (BHP Steel) from BHP Billiton Limited and the
related bonus issue of shares to BHP Billiton Plc shareholders with the
Australian Securities and Investment Commission (ASIC) and other regulators.
Copies of these documents will be available on the Group`s Internet site at
www.bhpbilliton.com
BHP Billiton Chairman Don Argus said: "Today is a very significant step
towards the planned public listing of BHP Steel in July this year. Since we
announced our intention to separate and publicly list our steel flat and
coated products business more than 12 months ago, there has been solid
support for the listing from all of BHP Steel`s stakeholders.
"There is recognition that the listing of BHP Steel will maximise the future
prospects of that business by creating a stand-alone company focused on
maintaining and enhancing its strong market reputation. Significantly, BHP
Steel will be master of its own destiny in terms of capital management and
that will prove a tremendous positive for the business going forward."
Mr Argus said: "BHP Steel will be able to pursue and capture market
opportunities and ensure its long-term competitiveness in a way that would
not have been possible if it had remained part of BHP Billiton. That has
proven true of our former long steel products business, now OneSteel, which
shortly after being spun-out from BHP went on to participate in a major
industry consolidation transaction."
Eligible BHP Billiton Limited shareholders will receive one BHP Steel share
for every five BHP Billiton Limited shares held. BHP Billiton Plc
shareholders will not receive BHP Steel shares. Instead, to ensure equality
in the economic treatment of BHP Billiton Plc shareholders, such
shareholders will receive a bonus issue of BHP Billiton Plc shares to
reflect the market value of the BHP Steel shares being distributed to BHP
Billiton Limited shareholders.
The demerger aims to maximise the combined value of BHP Steel and the BHP
Billiton Group. Importantly, the process provides eligible BHP Billiton
Limited shareholders with the opportunity to retain their BHP Steel shares,
to acquire additional shares prior to the public listing of BHP Steel or to
sell part or all of their entitlement into a dedicated Sale Facility.
Mr Argus said: "Upon listing, BHP Steel will be a well-capitalised,
independent company and will hold an important place within the Australian
investment market. It will have an experienced and energetic Board and
management team dedicated to maximising value for shareholders, many of whom
will also continue to be BHP Billiton Limited shareholders."
Details of the demerger transaction mechanics are attached in the following
appendices.
This announcement does not contain or constitute an offer or invitation to
purchase or subscribe for any securities of BHP Billiton Limited, BHP
Billiton Plc or BHP Steel in any jurisdiction, including the United States
and should not be relied on in connection with any decision to purchase or
subscribe for any such securities.
BHP Steel shares have not been and will not be registered under the US
Securities Act of 1933, and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements of the US Securities Act.
Offers of shares in BHP Steel Limited are to be accompanied by a copy of the
Retail Prospectus, the Shareholder Prospectus or the Institutional Offer
Memorandum. Anybody wishing to acquire shares in BHP Steel will need to
complete an application form or buy form (in the case of BHP Billiton
Limited Shareholders) that will be in or will accompany the Retail
Prospectus or the Shareholder Prospectus.
This announcement has been issued by BHP Billiton and the contents have been
approved solely for the purposes of section 21 of the Financial Services and
Markets Act 2000 by ABN AMRO Corporate Finance Limited and Credit Suisse
First Boston (Europe) Limited, which are regulated in the United Kingdom by
the Financial Services Authority. ABN AMRO Corporate Finance Limited and
Credit Suisse First Boston (Europe) Limited are acting exclusively for BHP
Billiton and for no one else in connection with the demerger of BHP Steel
and will not be responsible to anyone other than BHP Billiton for providing
the protections afforded to clients of ABN AMRO Corporate Finance Limited
and Credit Suisse First Boston (Europe) Limited, or for providing advice in
relation to the demerger of BHP Steel.
For further information, please contact:
Australia United Kingdom/South Africa
Dr. Robert Porter, Investor Mark Lidiard, Investor & Media
and Media Relations Relations
Tel: + 61 3 9609 3540 Tel: +44 20 7747 3956
Mobile: +61 419 587 456 email:
email: Mark.Lidiard@bhpbilliton.com
Robert.Porter@bhpbilliton.com
United States Ariane Gentil, Manager
Francis McAllister, Investor Communications
Relations Tel: +44 20 7747 3977
Tel: +1 713 961 8625 Mobile: Mobile: + 44 7881 518 715
+1 713 480 3699 email:
email: Ariane.Gentil@bhpbilliton.com
Francis.R.McAllister@bhpbilli
ton.com
Appendix A
Capital Reduction, Scheme of Arrangement and Bonus Issue of BHP Billiton Plc
Shares
As announced on 24 April 2002, the demerger will be implemented by way of a
capital reduction and distribution of 94% of BHP Steel shares. Under the
capital reduction and scheme of arrangement (the "Scheme"):
the share capital of BHP Billiton Limited will be reduced by $0.69 for each
BHP Billiton Limited share on issue at the record date, expected to be
Friday, 5 July 2002; and
eligible BHP Billiton Limited shareholders will be entitled to receive one
BHP Steel share for every five BHP Billiton Limited shares held.
The return of capital by BHP Billiton Limited from its share capital account
to BHP Billiton Limited shareholders will not be treated (in whole or part)
as a dividend for Australian taxation purposes. In this regard, BHP
Billiton Limited has sought and obtained a class ruling from the Australian
Taxation Office.
BHP Billiton will offer for sale the remaining 6% of BHP Steel shares on
issue under a sale facility (see below).
BHP Billiton Plc Shareholders will not receive BHP Steel shares. Instead,
to ensure equality in the economic treatment of BHP Billiton Plc
shareholders, such shareholders will receive a bonus issue of BHP Billiton
Plc Shares to reflect the market value of the BHP Steel shares being
distributed to BHP Billiton Limited Shareholders. The total number of
shares to be issued under the bonus issue will be determined using the
formula contained in Appendix B. The bonus issue is expected to be made on
Monday, 22 July 2002 to holders of BHP Billiton Plc shares on the register
as at Friday, 19 July 2002 (except for shareholders registered in the South
African section of the register where the bonus shares are expected to be
issued on 29 July 2002 to holders on the register as at 26 July 2002).
Further details relating to the capital reduction, Scheme and bonus issue of
BHP Billiton Plc shares are contained in the Scheme Booklet that is being
sent to BHP Billiton Limited shareholders and the BHP Billiton Plc Circular
that is being sent to BHP Billiton Plc shareholders along with a copy of the
Scheme Booklet.
Approval Process and Timetable
On Friday, 10 May 2002 the Federal Court of Australia ordered the convening
of shareholder meetings of BHP Billiton Limited to approve the Scheme of
Arrangement.
The Scheme and the bonus issue of BHP Billiton Plc shares to BHP Billiton
Plc shareholders are subject to the approval of both sets of BHP Billiton
shareholders. An Extraordinary General Meeting of BHP Billiton Plc
shareholders will take place at 9.30 a.m. (London time) and a General
Meeting of BHP Billiton Limited shareholders will take place at 6.30 p.m.
(Melbourne time), both on Wednesday, 26 June 2002. Further details are
contained in the Notices of Meeting included within the BHP Billiton Plc
Circular and BHP Billiton Limited Scheme Booklet respectively. Documents
will be despatched to shareholders on or before 24 May 2002.
The Scheme is also subject to the approval of the Federal Court of Australia
at a court hearing due to be held on Monday, 1 July 2002. The demerger is
dependent on all of the above approvals being obtained.
BHP Billiton Limited will trade ex the entitlement to BHP Steel shares on 2
July 2002. On this date, the value of each BHP Billiton Limited share would
be expected to fall, reflecting the separate value of BHP Steel shares.
Sale Facility and Offer of BHP Steel shares
Sale Facility
The Sale Facility is being offered to eligible BHP Billiton Limited
shareholders who wish to offer to sell, prior to the listing of BHP Steel on
ASX, some or all of the BHP Steel shares to which they are entitled under
the Scheme. The BHP Steel shares attributable to Ineligible Overseas
Shareholders will also be offered for sale under the Sale Facility and the
proceeds of sale will be remitted to such Ineligible Overseas Shareholders.
BHP Billiton will also offer to sell under the Sale Facility its 6% holding
of BHP Steel shares to ensure a minimum supply of BHP Steel shares under the
Offer.
BHP Steel shares will be sold under the Sale Facility at the final price
determined following the close of the institutional bookbuild process (see
below) (the "Final Price"). An indicative price range of $2.60 to $3.30
per BHP Steel share has been determined by BHP Billiton after consultation
with the Joint Global Coordinators, and is based partly on preliminary
indications from potential investors. The Final Price will be determined by
BHP Billiton after consultation with the Joint Global Coordinators and may
be set above, within or below the Indicative Price Range. The Final Price
is expected to be announced on Monday, 15 July 2002.
BHP Billiton retains the right not to proceed with the Sale Facility, or to
proceed with the Sale Facility but not sell all of the BHP Steel shares
available for sale. If the Sale Facility does proceed, BHP Billiton will
first sell under the Sale Facility all of the 6% of BHP Steel shares held by
it on its own behalf.
Details of the Sale Facility are contained in the Scheme Booklet, the
Shareholder Prospectus (for Australian and New Zealand BHP Billiton Limited
shareholders) and the Sale Facility Circular (for other BHP Billiton Limited
shareholders).
Offer
It is intended that the Offer will consist of a minimum of 54 million BHP
Steel shares, being the BHP Steel shares to be offered for sale by BHP
Billiton and the estimated number of BHP Steel shares to be offered for sale
on behalf of Ineligible Overseas Shareholders. The BHP Steel shares which
eligible BHP Billiton Limited shareholders offer to sell under the Sale
Facility will also form part of the pool of BHP Steel shares for sale under
the Offer. Accordingly, the actual number of BHP Steel shares being offered
for sale under the Offer is expected to exceed 54 million BHP Steel shares.
The Offer will be structured in two parts:
the Retail Offer - to retail investors in Australia and New Zealand,
including BHP Billiton Limited shareholders in Australia and New Zealand;
and
the Institutional Offer - to Australian institutional investors and
participating member organisations of ASX and, to the extent permitted by
applicable law, international institutional investors.
The price ultimately paid by successful applicants under the Retail Offer
and the Institutional Offer will be the Final Price (described above).
Details of the Offer are contained in the Shareholder Prospectus being sent
to BHP Billiton Limited shareholders in Australia and New Zealand with the
Scheme Booklet, and in the Retail Prospectus available to other prospective
BHP Steel investors in Australia and New Zealand. The prospectuses are
available on our website to BHP Billiton Limited shareholders and other
potential retail and institutional investors, except to persons in the
United States.
BHP Steel is expected to commence trading on ASX (on a conditional and
deferred settlement basis) on Monday, 15 July 2002.
Copies of the Scheme Booklet and other information relating to the demerger
of BHP Steel will be available on our Internet site:
http://www.bhpbilliton.com.
BHP Billiton Shareholder enquiries can be directed to the BHP Billiton Share
Department on 1300 655 140 (within Australia only) or (61 3) 9609 3333
(International) weekdays between 9.00a.m. and 5.00p.m. (Australian Eastern
Standard Time). Alternatively, please send an email to
share.department@bhpbilliton.com.
Advisers
ABN AMRO Corporate Finance Australia Limited and Credit Suisse First Boston
Australia Limited are acting as financial advisers to BHP Billiton on the
demerger of BHP Steel.
Appendix B
Bonus Issue Formula
The total number of bonus BHP Billiton Plc shares to be issued will be
determined by the following formula:
A = (B x C) Where: A = number of bonus BHP Billiton Plc
x (D / shares to be issued
E)
F - (B x
C / E)
B = VWAP of BHP Steel shares sold
under the Sale Facility and BHP
Steel shares traded on ASX during
the first five trading days
C = number of BHP Steel shares to
which BHP Billiton Limited
shareholders are entitled under
the Scheme (including any BHP
Steel shares sold on behalf of
Ineligible Overseas Shareholders*)
D = number of BHP Billiton Plc shares
on issue as at the BHP Billiton
Plc record date (expected to be 19
July 2002)
E = number of Fully Paid BHP Billiton
Limited shares in issue as at the
BHP Billiton Limited record date
(expected to be 5 July 2002)
F = VWAP of BHP Billiton Plc shares
traded on the LSE over the same
five day trading period used to
calculate the VWAP of BHP Steel
Shares
Note: VWAP = Volume Weighted Average Price
* This number does not include the BHP Steel shares to be sold by BHP
Billiton Limited as they are not being distributed to BHP Billiton Limited
shareholders. The proceeds from the sale of these BHP Steel shares will
benefit BHP Billiton and, as a consequence, all BHP Billiton shareholders
The VWAP of BHP Billiton Plc shares (F) is reduced by the value distributed
per BHP Billiton Limited share (B x C / E) to calculate a theoretical ex
bonus price for BHP Billiton Plc.
For illustrative purposes, based on the mid-point of the Indicative Price
Range and using a BHP Billiton Plc share price of 3.66 (being the closing
price of 3.88 on 8 May 2002, adjusted to give a theoretical ex bonus
price), and the Australian dollar/British pound exchange rate of 2.6940 as
at 9 May 2002, approximately 139 million new BHP Billiton Plc shares would
be issued. This equates to 2.3% of the aggregate number of ordinary shares
on issue by BHP Billiton, or approximately a one for 16.72 issue of BHP
Billiton Plc shares. The actual number of BHP Billiton plc shares to be
issued will depend on the actual value of BHP Steel and BHP Billiton as set
out above and may be higher or lower than this indicative figure.
Date: 13/05/2002 07:54:23 AM Produced by the SENS Department
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