Circular to ArcelorMittal Shareholders (ESOP)

Transcription

Corporate information
Company Secretary of ArcelorMittal
Nomonde Bam
3rd Floor, Main Building
Delfos Boulevard
Vanderbijlpark, 1911
South Africa
(PO Box 2, Vanderbijlpark, 1900)
Legal and Tax Advisers
Edward Nathan Sonnenbergs Inc.
(Registration number 2006/018200/21)
150 West Street
Sandton, Johannesburg, 2146
(PO Box 783347, Sandton, 2146)
Registered Office of ArcelorMittal
Room N3-3, Delfos Boulevard
South Africa
(PO Box 2, Vanderbijlpark, 1900)
Reporting Accountants and Auditors
Deloitte & Touche
Deloitte Place, Building 1
The Woodlands
20 Woodlands Drive
Woodmead
2052
South Africa
Place and date of incorporation of ArcelorMittal
Incorporated in South Africa on 9 June 1989
Sponsor to ArcelorMittal
JP Morgan Equities South Africa
Proprietary Limited
Fricker Road
Corner Hurlingham Road, Illovo
Sandton, 2196
South Africa
Transfer Secretaries to ArcelorMittal
Computershare Investor Services
Proprietary Limited
Ground Floor, 70 Marshall Street
Johannesburg, 2001
South Africa
(PO Box 61051, Marshalltown, 2107)
Table of contents
Clause number and description
Corporate information
Page
Inside front cover
Action required by ArcelorMittal Shareholders
1
Important dates and times
2
Definitions and interpretations
3
Circular to ArcelorMittal Shareholders
7
PART 1: INTRODUCTION
7
PART 2: THE SCHEME, THE DISPOSAL AND RELATED FINANCIAL ASSISTANCE
8
1.
8
Introduction
2. Key features of the scheme
9
3. The disposal
10
4. Financial assistance relating to the scheme
10
5. Pro forma financial information
11
PART 3: FINANCIAL ASSISTANCE RELATING TO THE LTIP
13
PART 4: GENERAL
14
1. The Company’s capital structure
14
2. Information on the directors and management
14
3. Expenses
15
4.
Market value of ArcelorMittal shares
15
5. Business of ArcelorMittal and its subsidiaries
15
6. Opinion and recommendation
16
7. Directors’ responsibility statement
16
8. Experts’ consents
16
9. Documents available for inspection
16
10. General meeting
16
Annexure 1: Information on Directors and Management
18
Annexure 2: Price and trading history
21
Annexure 3: Pro Forma Financial Information Relating to the Scheme
22
Annexure 4: Accountants' Report on the Pro Forma Financial Information
27
Notice of General Meeting
Attached
Form of proxy (grey)
Attached
Actions required by Shareholders
The definitions and interpretations commencing on page 3 of this Circular apply mutatis mutandis to this section. Please
take careful note of the following provisions regarding the actions required by shareholders:
This Circular contains important information regarding the matters to which it relates. You should carefully read through this
Circular and decide how you wish to vote on the resolutions to be proposed at the General Meeting.
Shareholders should not construe anything in this Circular as legal, business or tax advice. Shareholders who are in any doubt as to
what action to take should consult their CSDP, broker, banker, accountant, attorney or other professional adviser immediately.
If you have disposed of all of your Shares in ArcelorMittal, then this Circular, together with the attached notice of General Meeting
and form of proxy, should be forwarded to the purchaser to whom, or the Broker, agent, CSDP or banker through whom you
disposed of your Shares.
General meeting
A General Meeting of ArcelorMittal Shareholders will be held at 09h00 on Friday, 18 September 2015 at The Hyatt Regency
Hotel, 191 Oxford Road, Rosebank, Johannesburg, in order to consider and approve the resolutions set out in the notice of
General Meeting included in this Circular.
The notice convening the General Meeting is attached to this Circular.
Certificated Shareholders and “Own Name” Dematerialised Shareholders
A notice convening the General Meeting and a form of proxy for use by Certificated Shareholders and Dematerialised
Shareholders with “own name” registration who are unable to attend the General Meeting, form part of this Circular.
You are entitled to attend, or be represented by proxy, at the General Meeting.
If you are unable to attend the General Meeting, but wish to be represented thereat, you must complete and are requested to
return the attached form of proxy [grey], in accordance with the instructions contained therein, to be received by the Transfer
Secretaries, by no later than 09h00 on Wednesday, 16 September 2015. Forms of proxy not lodged with the Transfer
Secretaries in time may be handed to the chairman of the General Meeting immediately before the commencement of the General
Meeting.
Dematerialised Shareholders, other than Dematerialised Shareholders with “own name” registration
You must not complete the attached form of proxy [grey].
If you are unable to attend the General Meeting and wish to be represented thereat, you must provide your CSDP or Broker with
your voting instructions, in terms of the Custody Agreement entered into between you and your CSDP or Broker, in the manner
and within the time stipulated therein;
If you wish to attend the General Meeting in person, you must instruct your CSDP or Broker to issue you with the necessary
written letter of representation to attend.
1
Important dates and times
2015
Announcement released on SENS on
Friday, 31 July
Record date to determine which Shareholders are eligible to receive notice of the
General Meeting
Friday, 7 August
Circular posted to ArcelorMittal Shareholders on
Wednesday, 19 August
Further announcement released on SENS on3
Wednesday, 19 August
Last day to trade in order to be eligible to attend, participate and vote at the General
Meeting
Friday, 4 September
Record date to determine which Shareholders are eligible to attend, participate and vote
at the General Meeting
Friday, 11 September
Last day to lodge forms of proxy for the General Meeting by 09h00 on
Wednesday, 16 September
General Meeting to be held at 09h00 on
Results of General Meeting released on SENS on
Notes:
1.
The above dates and times are subject to amendment. Any such amendment will be released on SENS.
2.
Additional copies of this Circular, in its printed format, may be obtained from the Sponsor at the address set out in the
“Corporate information” section of this Circular during normal business hours from Wednesday, 19 August 2015 up to and
including, Friday, 18 September 2015.
3.
Will contain the updated pro forma financial effects based on the latest reviewed results for the interim period ended
30 June 2015.
2
Definitions and interpretations
In this Circular, the notice of general meeting and form of proxy, unless the context otherwise indicates, references to the
singular include the plural and vice versa, words denoting one gender include the others, expressions denoting natural persons
include juristic persons and associations of persons and vice versa, and the words in the first column hereunder have the
meaning stated opposite them in the second column, as follows:
"Allocated Trust Units"
Trust Units which have been notionally allocated by the Trustees to Qualifying Employees,
and which have been accepted by such Qualifying Employees, each in accordance with the
provisions of the Trust Deed;
"Allocation Date"
the date on which Trust Units are notionally allocated to Qualifying Employees and/ or
Beneficiaries, as the case may be, being the First Allocation Date, and, in respect of
subsequent allocations, the date determined by ArcelorMittal and notified in writing to the
Trustees;
"ArcelorMittal" or "the
Company"
ArcelorMittal South Africa Limited (Registration number 1989/002164/06), a public
company duly registered and incorporated in accordance with the laws of South Africa,
whose ordinary shares are listed on the securities exchange operated by the JSE, being the
founder of the Trust;
“ArcelorMittal Group”
ArcelorMittal, as well as any Subsidiary of ArcelorMittal established or acquired after the
First Allocation Date pursuant to an acquisition of either the shares or the business of any
third party not forming part of the ArcelorMittal Group, and which results in the
employees of such third party becoming eligible to participate in the Scheme;
"ArcelorMittal Related Shares"
those Trust Shares in respect of which Trust Units have been notionally allocated and to
which such Trust Units shall notionally correspond;
"ArcelorMittal Shareholders" or
"Shareholders"
registered holders of ArcelorMittal Shares;
"ArcelorMittal Shares" or
"Shares"
ordinary shares with no par value in the issued share capital of ArcelorMittal;
"BBBEE Act"
the Broad Based Black Economic Empowerment Act, 53 of 2003, as amended;
"BEE"
Broad-Based Black Economic Empowerment, as defined in the BBBEE Act;
"Beneficiary"
a Qualifying Employee who becomes a beneficiary of the Trust in accordance with the
"Beneficiary Cash Claim"
in respect of each Beneficiary, a right to the Net Cash Reserves attributable to his
Allocated Trust Units, on the basis that each Allocated Trust Unit will bear a proportionate
share of the total Net Cash Reserves, as determined in accordance with the provisions of
the Trust Deed;
"Board" or "Directors"
the members of the board of directors of ArcelorMittal, at the Last Practicable Date,
whose details are set out on page 18 of this Circular, or in respect of the Trust Deed, the
members of the Board from time to time, or the Remuneration, Social and Ethics
Committee of ArcelorMittal, as the case may be;
"Broker"
is a person registered as a broking member (equities) in terms of the Rules of the JSE
made in accordance with the provisions of the Financial Market Act;
"Business Day"
any day other than a Saturday, Sunday or a statutory holiday in South Africa;
"Capital Right"
in respect of each Allocated Trust Unit, a right of the Beneficiary to receive the Net Capital
Proceeds attributable to an ArcelorMittal Related Share;
"Certificated Share"
an ArcelorMittal Share that has not been Dematerialised, title to which is evidenced by a
physical Document of Title;
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"Certificated Shareholder"
an ArcelorMittal Shareholder who holds Certificated Shares;
"Circular"
this bound document, dated 19 August 2015, incorporating a notice of general meeting
and a form of proxy;
“Codes”
the Codes of Good Practice on BEE published in terms of the BBBEE Act and applicable to
ArcelorMittal;
"Companies Act"
the Companies Act, 71 of 2008, as amended, including, where applicable the Companies
Regulations;
"Contributions"
those amounts to be contributed by ArcelorMittal to the Trust from time to time in
accordance with the terms and conditions contained in the Contributions Agreement;
"Contributions Agreement"
the agreement entered into between ArcelorMittal and the Trustees, dated 30 July 2015,
regulating ArcelorMittal's Contributions to the Trust from time to time;
"CSDP"
a Central Securities Depository Participant, accepted as a participant in terms of the
Financial Markets Act, appointed by a holder of securities for the purposes of, and in
regard to Dematerialisation;
"Custody Agreement"
the custody agreement between a person and a CSDP or Broker regulating their
relationship in respect of Dematerialised Shares held in ArcelorMittal's Uncertificated
Securities Register administered by the CSDP or Broker on behalf of that person;
"Dematerialisation"
the process whereby Certificated Shares are incorporated into the Strate system and are
no longer evidenced by physical Documents of Title, but converted into electronic format
as Dematerialised Shares and recorded in ArcelorMittal’s Uncertificated Securities
Register;
"Dematerialised Share"
an ArcelorMittal Share that has been Dematerialised or has been issued in Dematerialised
form, and recorded in ArcelorMittal’s Uncertificated Securities Register;
"Dematerialised Shareholder"
an ArcelorMittal Shareholder who holds Dematerialised Shares;
“Disposal”
the disposal of 21 103 219 ArcelorMittal Shares by Vicva to the Trust at a total purchase
price of R1 854 128 821, amounting to a price of R87,86 per share, in accordance with
the terms and conditions contained in the Sale Agreement;
"Documents of Title"
share certificates, certified transfer deeds, balance receipts and/or any other form of
acceptable document of title acceptable to ArcelorMittal in respect of ArcelorMittal
Shares;
"Employment Termination Date"
the date on which the cause of a Fault Termination or No Fault Termination arises or, if the
Board so determines, the date on which a Beneficiary ceases to be actually employed by
any member of the ArcelorMittal Group as a result of such Fault Termination or No Fault
Termination, in which event it shall be such date;
"Expiry Date"
means 30 September 2020 or such other date notified in writing by ArcelorMittal to the
Trustees;
"Fault Termination"
the termination of employment of a Beneficiary with any member of the ArcelorMittal
Group prior to the expiry of the Incentive Period for any reason whatsoever other than a
No Fault Termination, and shall include dismissal, abscondment or resignation of the
Beneficiary, such other grounds notified in writing by ArcelorMittal to the Trustees from
time to time;
"Financial Markets Act"
Financial Markets Act, 19 of 2012, as amended;
"First Allocation Date"
Thursday, 1 October 2015, or such other date notified in writing by ArcelorMittal to the
Trustees;
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"General Meeting"
the general meeting of ArcelorMittal Shareholders to be held at The Hyatt Regency Hotel,
191 Oxford Road, Rosebank, Johannesburg at 09h00 on Friday, 18 September 2015,
which meeting is convened in terms of the notice of general meeting attached to this
Circular (or any adjourned or postponed meeting);
"Incentive Period"
in respect of each Trust Unit, a period that commences on the Allocation Date and expires
on the Expiry Date;
"Income Right"
in respect of each Allocated Trust Unit a right of the Beneficiary to the Net Income, on the
basis that each Allocated Trust Unit shall bear its proportionate share of the Net Income,
and which shall be an amount determined in accordance with the provisions of the Trust
Deed;
“Initial Contribution”
the initial contribution of R1 854 128 821 to be made by ArcelorMittal to the Trust in
accordance with the terms and conditions of the Contributions Agreement to fund the
purchase price of the Sale Shares;
"JSE"
JSE Limited (Registration number 2005/022939/06), a public company duly incorporated
in accordance with the laws of South Africa and licensed as an exchange under the
Financial Markets Act;
"Last Practicable Date"
Friday, 7 August 2015, being the last practicable date prior to the finalisation of this
Circular;
"Liabilities"
the costs of the Trust, tax and all other current and non-current liabilities of the Trust;
"Listings Requirements"
the Listings Requirements of the JSE;
“LTIP”
the ArcelorMittal South Africa Long Term Incentive Plan 2012;
“LTIP Conditional Award”
a conditional award of ArcelorMittal Shares granted to an LTIP Participant under the LTIP;
“LTIP Employer Company”
ArcelorMittal, a subsidiary thereof or of a selected associated organisation;
“LTIP Participant”
an employee of and LTIP Employer Company, to whom an LTIP Conditional Award has
been made under the LTIP and who has accepted same;
"Market Value"
the prevailing market price of a Trust Share;
"Net Capital Proceeds"
the actual proceeds received by the Trust in respect of the disposal of an ArcelorMittal
Related Share, less any Liabilities;
"Net Cash Reserves"
the cash reserves (being the aggregate amount of income and/or cash received by the
Trust which is not vested in the Beneficiaries in accordance with the Trust Deed, but which
is capitalised and held by the Trust on capital account), available in the Trust after settling
all of the Liabilities;
"Net Income"
all the income actually received by or accrued to the Trust, other than the Net Capital
Proceeds, but which shall include all dividends, including script dividends, in respect of the
Trust Shares, less any Liabilities;
"No Fault Termination"
the termination of employment of a Beneficiary with the ArcelorMittal Group prior to the
expiry of the Incentive Period, for any of the followings reasons:
−
the death of the Beneficiary;
−
the retirement of a Beneficiary (at a retirement age which accords with the
ArcelorMittal Group’s internal policies);
−
the retrenchment of a Beneficiary;
−
permanent disability or incapacity;
−
a Beneficiary becoming employed by a new employer which is not a member of the
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ArcelorMittal Group, to whom a business of ArcelorMittal has been transferred;
−
the secondment of a Beneficiary, at the written request of ArcelorMittal, to a
company outside the ArcelorMittal Group; and
−
where a Beneficiary is promoted to an employment band which does not fall within
the range specified in paragraph 2.1.3 of this Circular;
"Qualifying Employee"
the persons who comply with the requirements set out in paragraph 2.1 of this Circular on
the Allocation Date;
"Register"
ArcelorMittal’s securities register, including each Uncertificated Securities Register;
“Sale Agreement”
the sale of shares agreement entered into between Vicva, ArcelorMittal and the Trust,
dated 30 July 2015, on the terms and conditions of which the Disposal is to be effected;
“Sale Shares”
the 21 103 219 ArcelorMittal Shares held as treasury shares by the Vicva, to be disposed
of to the Trust in terms of the Sale Agreement;
“Scheme”
the Ikageng Broad-Based Employee Share Scheme, constituted and regulated by the Trust
Deed;
"SENS"
the Stock Exchange News Service of the JSE;
"South Africa"
the Republic of South Africa;
“Sponsor”
JP Morgan Equities South Africa Proprietary Limited (Registration number
1995/011815/07), a private company incorporated in accordance with the laws of the
RSA, with a registered office of 1 Fricker Road, Corner Hurlingham Road, Illovo, Sandton,
2196, being the sponsor of ArcelorMittal;
"Strate"
the settlement and clearing system used by the JSE, managed by Strate Proprietary
Limited (Registration number 1998/022242/07), a private company duly incorporated in
accordance with the laws of South Africa;
"Subsidiary"
a subsidiary as defined in the Companies Act;
"Transfer Secretaries" or
"Computershare"
Computershare Investor Services Proprietary Limited (Registration number
2004/003647/07), a private company incorporated in accordance with the laws of the
RSA, with a registered address of Ground Floor, 70 Marshall Street, Johannesburg, 2001,
being the transfer secretaries of ArcelorMittal;
"Trust"
The Ikageng Broad-Based Employee Share Trust as constituted in terms of the Trust
Deed;
"Trust Deed"
the trust deed of the Trust as amended from time to time in accordance with its terms;
"Trustees"
the trustees from time to time of the Trust, all holding office in terms of the Trust Deed;
"Trust Shares"
the issued ArcelorMittal Shares which the Trust acquires and holds in accordance with the
"Trust Units"
the notional units created by the Trustees in terms of the Trust Deed, used exclusively as
a mechanism to establish the respective Capital Rights and Income Rights in respect of
each Allocated Trust Unit, of the Beneficiaries inter se;
"Uncertificated Securities
Register:
the record of Dematerialised Shares administered and maintained by a CSDP and which
forms part of the Register; and
“Vicva”
Vicva Investments and Trading Nine Proprietary Limited (Registration number
2000/011081/07) a private company duly registered and incorporated in accordance
with the laws of South Africa and a wholly-owned Subsidiary of the Company.
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ARCELORMITTAL SOUTH AFRICA LIMITED
Incorporated in the Republic of South Africa
Share code: ACL ISIN: ZAE000134961
("ArcelorMittal" or “the Company”)
Directors
Executive
Non-executive
PS O’Flaherty (Chief Executive Officer)
PM Makwana * (Chairman)
D Subramanian (Chief Financial Officer)
DCG Murray *
NP Mnxasana *
JRD Modise *
LP Mondi
DK Chugh
RK Kothari
M Vereecke
*Independent
Circular to ArcelorMittal Shareholders
Part 1: Introduction
The purpose of this Circular is to provide ArcelorMittal Shareholders with information regarding the following matters:
1.
the Scheme, and more particularly:
a.
the disposal of the Sale Shares for cash to the Trust; and
b.
the granting of financial assistance by ArcelorMittal,
each pursuant to the Scheme proposed to be adopted by ArcelorMittal with the purpose of facilitating BEE ownership
and creating meaningful wealth for qualifying employees in order to ensure their long-term dedication and the retention
of skills, whilst enhancing transformation of the ArcelorMittal group; and
2.
the granting of financial assistance by ArcelorMittal pursuant to the Long Term Incentive Plan 2012,
and to give notice of the General Meeting in order to consider and, if deemed fit, to pass the relevant resolutions. The notice
convening the General Meeting is attached to and forms part of this Circular.
Further information pertaining to 1 and 2 above are set out in Part 2 and Part 3 of this Circular, respectively.
7
Part 2: The scheme, the disposal and related financial assistance
1.
Introduction
1.1.
The Board proposes to introduce the Scheme, which is a broad-based employee share scheme, with the
objective of facilitating BEE ownership in the ArcelorMittal Group in compliance with the Codes. In order to
demonstrate the commitment of ArcelorMittal to BEE and contribute towards the social upliftment of black
people, it is intended that a minimum of 60% of the economic benefits attached to the ArcelorMittal shares
that will be the subject of the Scheme must accrue to black persons (as such term is understood in the BBBEE
Act, as read with the Codes) who participate in the Scheme. In the first allocation, such black beneficiaries will
also be allocated more Trust Units than the non-black beneficiaries. It is furthermore intended that the Trust
would adhere to the BEE requirements applicable to the Trust and/or ArcelorMittal which are of general or
substantially general application, whether or not they have the force of law, including the requirements set out
in the BBBEE Act and the Codes.
1.2.
The purpose of the Scheme is also to create meaningful wealth for approximately 9 000 ArcelorMittal Group
employees. The Board believes that this will lead to the long-term dedication of employees and retention of
skills, thereby contributing to the success of the ArcelorMittal Group.
1.3.
The purpose of the broad-based employee share scheme is also to enhance the transformation of
ArcelorMittal Group.
1.4.
The lifespan of the Scheme will be five years from its implementation, which is envisaged to occur on
1 October 2015.
1.5.
The Scheme is proposed to be implemented through the mechanism of the Trust, which will hold the
ArcelorMittal shares that are the subject of the Scheme. The shares will at the outset of the Scheme
constitute 4,7% of the issued share capital of the Company and will be sourced from treasury shares held by
Vicva, at the cost of the Company. For such purposes, the Company will make a monetary contribution to the
Trust. It is also envisaged that the Company may make future monetary contributions to the Trust to fund the
cost of operating the Trust, to make contributions to enable the Trust to make payments to deceased
Beneficiaries’ estates as compensation for the cancellation of their Allocated Trust Units and/or to cover ad
hoc voluntary distributions to the qualifying employees who become beneficiaries of the Trust.
1.6.
Permanent employees of the ArcelorMittal Group who fall within ArceclorMittal’s middle management and
lower employment grades (who would not qualify for participation in the Company’s long term incentive plan
for senior management), would qualify to participate in the Scheme, provided they are “new entrants” as
contemplated in the Codes and are not serving their notice period. As beneficiaries of the Trust, these
qualifying employees will be entitled during the lifespan of the Scheme (or from the time they become
beneficiaries, in the case of future allocations) to share proportionately in the net income derived from the
ArcelorMittal Shares that will be the subject of the Scheme. Furthermore, at the end of the Scheme (when the
capital entitlement vests), they will have the option of having the ArcelorMittal Related Shares that are
notionally linked to their Allocated Trust Units transferred to them, thereby acquiring a direct interest in the
equity of ArcelorMittal, or to receive the net proceeds derived from the sale of such shares.
1.7.
Each Qualifying Employee who is a black person and who does not reject the allocation made on the First
Allocation Date, will qualify for 2 250 Trust Units, whilst each Qualifying Employee who is not a black person
and who does not reject the allocation made on the First Allocation Date, will qualify for 1 950 Trust Units.
Allocations are made irrespective of the employment grading of Qualifying Employees. It is accordingly
envisaged that approximately 18 900 000 out of the total of the 21 103 219 initial Trust Shares will be linked
to the first allocation of Trust Units. The balance of the Trust Shares will not be linked until future allocations
of Trust Units are made, for example in the case of new appointments or when additional Trust Units need to
be allocated to Beneficiaries who are black persons so as to ensure that the 60% BEE requirement for the
Scheme is adhered to.
1.8.
The Trust will not be controlled by the Company, so that the JSE will permit the voting rights exercisable at
general meetings of ArcelorMittal Shareholders on the ArcelorMittal Shares held by the Trust would be taken
into account during the lifespan of the Scheme in respect of all resolutions taken at such general meetings.
The Trust Deed accordingly makes provision for only one, out of the six, Trustees that are required to be in
office, to be appointed at the behest of the Company. Three of the remaining five must be elected from the
ranks of the Beneficiaries (after the Beneficiaries have ran the nomination and appointment process prescribed
by the Trust Deed) and the other two must then be elected by such three Beneficiary appointed trustees and
the trustee appointed by the Company, from a list of candidates who are independent of the ArcelorMittal
8
Group and the Trust, provided by ArcelorMittal. A first Trustee, Mr Monungwa Isak Mtolo, was appointed by
the Company as an interim arrangement for purposes of setting up the Trust and making the first allocations,
seeing that there must be Beneficiaries before the remainder of the Trustees can be appointed. During such
interim period, the first Trustee will not be entitled to exercise any voting rights in respect of the ArcelorMittal
Shares that will be held by the Trust.
2.
Key features of the scheme
The key features of the Scheme are as follows:
2.1.
the Board must from time to time identify the Qualifying Employees and, in doing so, the Board must take into
account the following criteria:
2.1.1.
a Qualifying Employee must be a permanent employee of the ArcelorMittal Group, having
entered into an ArcelorMittal employee contract. Fixed-term contractors, independent
contractors, service contractors, temporary contract holders and expatriates do not qualify for
participation in the Scheme;
2.1.2.
a Qualifying Employee must be a “new entrant” as contemplated in the Codes;
2.1.3.
a Qualifying Employee must fall within ArcelorMittal’s employment grades "E" to "L", which are
the employment grades for middle management and below;
2.1.4.
a Qualifying Employee must not be serving his notice period; and
2.1.5.
a Qualifying Employee may not participate in any other incentive scheme of the ArcelorMittal
Group;
2.2.
at the commencement of the Scheme, Qualifying Employees are allocated Trust Units, each of which is
notionally linked to one ArcelorMittal Related Share. The number of Allocated Trust Units therefore indicates
the number of ArcelorMittal Related Shares that could vest in a Qualifying Employee (or in respect of which
the Beneficiary would receive a distribution of Net Capital Proceeds should the Beneficiary elect that the
ArcelorMittal Related Shares should be disposed of by the Trust) at the end of the Incentive Period, subject to
the terms of the Trust Deed. There are no performance targets for vesting. The Beneficiaries have no right in
or to the assets of the Trust (including the Trust Shares) until vesting;
2.3.
during the Incentive Period, the Net Income accruing to the Trust from time to time in respect of each of the
Trust Units, will be distributed among all the Beneficiaries in accordance with their Income Rights, which are
proportionate to the number of Allocated Units that each Beneficiary holds;
2.4.
the amount of the Beneficiary Cash Claim, if any, payable to a Beneficiary must be awarded to, vest in and be
distributed to the Beneficiary on the Expiry Date in accordance with the provisions of the Trust Deed;
2.5.
Qualifying Employees are not required to pay any consideration for their allocated Trust Units or the
ArcelorMittal Related Shares;
2.6.
the Trust, as the registered holder and owner of the Trust Shares, is entitled to vote the Trust Shares at all
meetings of ArcelorMittal Shareholders and a decision as to how to vote the Trust Shares must be determined
by the Trustees prior to the relevant meeting of ArcelorMittal's Shareholders;
2.7.
termination of employment for reasons of Fault Termination prior to the end of the Incentive Period will result
in the cancellation of the Qualifying Employee’s participation in the Scheme through forfeiture of the
Beneficiary's Trust Units as from the Employment Termination Date. Consequently, the Beneficiary will cease
to be entitled to a proportionate share of the future distributions of the Net Income and cease to have a
Capital Right and any right to the Beneficiary Cash Claim;
2.8.
termination of employment for reasons of No Fault Termination prior to the end of the Incentive Period will
result in a proportionate participation in the Scheme, in that the Beneficiary will be entitled only to the portion
of the Allocated Trust Units calculated by reference to and in the same proportion that the number of days of
the Incentive Period up to the Employment Termination Date bears to the total number of days in the
Incentive Period. The remainder of the Allocated Trust Units will immediately be forfeited. Except in the case
of death (as dealt with in paragraph 4.3), in respect of the Trust Units that the Beneficiary will be entitled to
retain, the ArcelorMittal Related Shares will only be disposed of by the Trustees upon or after the expiry of the
Incentive Period, at which time the Net Capital Proceeds arising from the disposal will vest in such Beneficiary;
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3.
2.9.
during the Incentive Period, a Beneficiary will not be entitled to sell, transfer or otherwise dispose of or
encumber his Trust Units and/or his the Capital Right or Income right, or any other right in terms of the Trust
Deed, other than by way of the forfeiture or cancellation thereof in accordance with the terms of the Trust
Deed;
2.10.
if the Trustees become obliged and/or forced as a matter of law or by reason of contractual obligations to
dispose of all of the Trust Shares to any third party, the Trustees must immediately allocate all of the Trust
Units which have not been allocated to Qualifying Employees or were forfeited by Beneficiaries as a result of
No Fault Terminations and/or Fault Terminations, to those Beneficiaries who meet the criteria to qualify for
participation in the Scheme in proportion to their Allocated Trust Units immediately prior to such forced
disposal. The Trustees must thereafter dispose of the Trust Shares to the third party and vest in and distribute
the Net Capital Proceeds to the Beneficiaries;
2.11.
The Scheme will terminate on the Expiry Date but may, however, at any time be terminated sooner by the
Trustees by unanimous resolution, subject to ArcelorMittal’s prior written approval, or by ArcelorMittal on
written notice to the Trustees, subject to compliance with any applicable requirements of the JSE. Where this
Scheme is so terminated prior to the Expiry Date, all of the Trust Units which have not been allocated to
Qualifying Employees or were forfeited by Beneficiaries as a result of No Fault Terminations and/or Fault
Terminations, must be allocated by the Trustees to the Beneficiaries at the time in proportion to their
Allocated Trust Units and in accordance with the principle that 60% of the economic benefits must accrue to
Beneficiaries who are black persons. Thereafter, the Beneficiaries will have the option of having the
ArcelorMittal Related Shares that are notionally linked to their Allocated Trust Units transferred to them,
thereby acquiring a direct interest in the equity of ArcelorMittal, or to receive the net proceeds derived from
the sale of such shares.
The disposal
3.1.
Vicva has agreed to sell the Sale Shares to the Trust with effect from the date after the last of the conditions
precedent to the Disposal is fulfilled, as may be agreed between the parties to the Sale Agreement in writing.
3.2.
The Disposal will not take place at the market value per ArcelorMittal share at the time the Sale Agreement is
implemented, but rather at a consideration of R87,86 per ArcelorMittal Share. The reason for the sale at a
premium to market value is that Vicva acquired the Sale Shares at R87,86 per share during 2009 using a loan
from ArcelorMittal and is indebted to settle this loan. The total purchase price is accordingly R1 854 128 821.
The Initial Contribution to be made by ArcelorMittal to the Trust must be applied in payment of the purchase
price of the Sale Shares to Vicva. Vicva is obliged to apply the money as settlement of Vicva’s indebtedness to
ArcelorMittal and pursuant thereto ArcelorMittal will be in a cash neutral position despite having made the
Initial Contribution,
3.3.
As the Sale Shares are held by Vicva as treasury shares, the disposal thereof to the Trust will be required to
comply with the provisions of the Listings Requirements governing a specific issue of shares for cash.
3.4.
This Disposal is subject to the fulfilment of the following outstanding conditions precedent by no later than
1 October 2015 or such later date as the parties to the Sale Agreement may agree in writing, namely that -
3.5.
4.
3.4.1.
ArcelorMittal Shareholders have passed all such resolutions as may be required to approve and
implement the Disposal, as required in terms of the Companies Act and/or the JSE Listings
Requirements; and
3.4.2.
the Contributions Agreement has become unconditional in accordance with its terms, save for
any condition precedent thereto requiring the Sale Agreement to become unconditional.
The Trust is not a public shareholder as contemplated in the JSE Listings Requirements. However, following
the Disposal, at least 20% of the issued ArcelorMittal Shares will continue to be held by the public.
Financial assistance relating to the scheme
4.1.
ArcelorMittal has undertaken to contribute the Initial Contribution to the Trustees once the last of the
conditions precedent to the Contributions Agreement is met. The Trustees will be obliged to utilise and apply
the Initial Contribution to pay the purchase price owing to Vicva pursuant to the Disposal. The Trustees will
have no obligation to repay any portion of the Initial Contribution to ArcelorMittal. The money has to be
applied by the Trustees to acquire the Sale Shares.
4.2.
Vivca will be required to use the purchase price to settle its indebtedness to ArcelorMittal on account of
money advanced by ArcelorMittal to Vicva during 2009 and which Vicva had used at the time to acquire
ArcelorMittal Shares as treasury shares.
10
5.
4.3.
ArcelorMittal will also be obliged to make a Contribution to the Trust in the event of a No Fault Termination as
a result of death prior to the end of the Incentive Period. In such instance, the Beneficiary will be entitled only
to the portion of the Allocated Trust Units calculated by reference to and in the same proportion that the
number of days of the Incentive Period up to the Employment Termination Date bears to the total number of
days in the Incentive Period. The Trustees will determine the market value of the ArcelorMittal Related Shares
notionally linked to the aforementioned portion of the Allocated Trust Units and ArcelorMittal will be obliged to
make a Contribution to the Trust in such amount, which money the Trustees will be required to make a
payment to the deceased Beneficiary’s estate as compensation for the cancellation of such portion of
Allocated Trust Units.
4.4.
ArcelorMittal is also liable to pay all reasonable costs, expenses and tax of the Trust, including the fees payable
to its auditors and the amounts due and payable in accordance with the agreement whereby an administrator
is to be appointed to administer the Trust (including the administrator’s fees). It has also agreed to pay any
other administration costs which have been approved by ArcelorMittal in writing in terms of the Trust Deed.
ArcelorMittal shall also provide to or procure for the Trust, all secretarial, accounting, audit, administrative and
legal services at no charge.
4.5.
ArcelorMittal is entitled to make Additional Contributions to the Trust from time to time, in its sole and
absolute discretion.
4.6.
The implementation of the Contributions Agreement (and consequently the making of the Initial Contribution
and other Contributions) is subject to the fulfilment of the following outstanding conditions precedent by no
later than 1 October 2015 or such later date as the parties to the Sale Agreement may agree in writing,
namely that 4.6.1.
ArcelorMittal Shareholders have passed all such resolutions as may be required to approve and
implement the transactions contemplated in the Contributions Agreement, including any special
resolutions required in terms of the Companies Act; and
4.6.2.
the Sale Agreement has become unconditional in accordance with its terms, save for any condition
precedent thereto requiring the Contributions Agreement to become unconditional.
4.7.
At the General Meeting, the approval of ArcelorMittal Shareholders by special resolution will be sought to the
making by ArcelorMittal of the Contributions, to the extent that the making of the Contributions by
ArcelorMittal may constitute financial assistance granted by ArcelorMittal to the Trust and/or Qualifying
Employees.
4.8.
There may also be financial assistance provided by ArcelorMittal to the Beneficiaries through their participation
in and benefitting from the Scheme and accordingly the approval of ArcelorMittal Shareholders by special
resolution will also be sought to approve same, to the extent required by the Act.
Pro forma financial information
5.1.
Annexure 3 of this Circular contains the pro forma financial effects which illustrate the impact of the
Scheme on the earnings per share (“EPS”), headline earnings per share (“HEPS”), net asset value per share
(“NAV”) and tangible net asset value (“TNAV”) per share of ArcelorMittal for the twelve months ended
31 December 2014. The Independent Reporting Accountants’ report on the pro forma financial information of
ArcelorMittal is contained in Annexure 4 of this Circular.
5.2.
The pro forma financial information is presented in accordance with the provisions of the Listings
Requirements and the Guide on Pro Forma Financial information issued by the South African Institute of
Chartered Accountants.
5.3.
These pro forma financial effects are the responsibility of the Directors.
5.4.
The pro forma financial effects are presented in a manner consistent with the basis on which the historical
financial information of ArcelorMittal has been presented and in terms of ArcelorMittal’s accounting policies
for the financial year ended 31 December 2014. The pro forma financial effects have been presented for
illustrative purposes only and, because of their nature, may not give a fair reflection of ArcelorMittal’s financial
position, changes in equity or results of operations post implementation of the Scheme.
5.5.
It has been assumed for purposes of pro forma financial effects that the Scheme took place with effect from
1 January 2014 for the statement of comprehensive income purposes and on 31 December 2014 for the
statement of financial position purposes.
11
Pro forma per share information for the year ended 31 December 2014
The pro forma financial effects of the Scheme are as follows:
Column
A
B
Before the scheme
Pro forma after the
% Change
Scheme
Rm
Rm
Loss per share (cents)
(39)
(54)
-38%
Diluted loss per share (cents)
(39)
(54)
-38%
Headline loss per share (cents)
(57)
(71)
-25%
Diluted headline loss per share (cents)
(57)
(71)
-25%
Net asset value (NAV) per share (cents)
5 165
5 163
0%
Tangible net asset value (TNAV) per share (cents)
5 131
5 129
0%
Total number of shares in issue
401 201 877
401 201 877
0%
Weighted average number of shares in issue
401 201 877
401 201 877
0%
Diluted weighted average number of shares in issue
401 201 877
401 201 877
0%
NOTES
1
Column A has been derived without adjustment from ArcelorMittal’s audited consolidated financial statements for the year ended 31 December 2014.
2
Column B illustrates the pro forma financial effects after the Scheme which take into account the following
-
Estimated IFRS 2 charge of R72 million calculated as the fair value of the Sale Shares spread over the vesting period of 5 years. The fair value per
share at inception of the Scheme is assumed at R17.
-
Estimated once-off transactions costs of R4 million.
-
Estimated net tax credit calculated at 28% on the estimated IFRS 2 charge of R72 million, transaction costs of
R4 million as well as the securities tax payable by a group entity of R5 million calculated at 0.25% of
R1 854 million on sale of the shares to the Trust. These tax adjustments are of a non-continuing nature.
3
The weighted average number of shares in issue remained the same as the Trust will be consolidated and the Sale Shares treated for accounting purposes as
treasury shares until vesting.
12
Part 3: Financial assistance relating to the LTIP
1.
Shareholders approved the LTIP at a the Company’s annual general meeting held in May 2012 by ordinary resolution
passed by a 75% majority of the votes cast in favour of the resolution by shareholders present or represented by proxy
at the meeting. The LTIP is a share incentive scheme for senior management and specialist grades, including executive
directors and prescribed officers of LTIP Employer Companies.
2.
The first grants of LTIP Conditional Awards, which were made during 2012, are due to vest later in 2015, provided that
the applicable vesting conditions are met. Shortly after vesting, the relevant LTIP Employer Companies will be required
to deliver ArcelorMittal Shares to the LTIP Participants in their employ. In terms of the rules of the LTIP, the LTIP
Employer Companies must, on instruction of the Directors procure the funds for the purchase of ArcelorMittal Shares on
the market and then instruct any third party to acquire and deliver the ArcelorMittal Shares to the relevant LTIP
Participants in their employ. The LTIP Employer Companies would accordingly bear the liability for the cost of the
acquisition of ArcelorMittal Shares that are due to be delivered to the LTIP Participants in their employ upon vesting of
the relevant LTIP Conditional Awards. LTIP Participants are not required to pay any monetary consideration for the LTIP
Conditional Awards made to them, nor for the ArcelorMittal Shares they are due to receive upon vesting.
3.
In the absence of new case law on the relevant provisions of the Companies Act, which came into force during 2011,
the Board has decided to err on the side of caution and to proceed on the basis that financial assistance under sections
44 and/or 45 of the Companies Act may be provided in the implementation of the LTIP, and in particular, through the
funding by the LTIP Employer Companies of the acquisition cost of ArcelorMittal Shares for delivery to LTIP Participants
in whom LTIP Conditional Awards have vested.
4.
One of the requirements of the aforementioned sections is that, unless the exemption for employee share schemes
under the Companies Act has application, the board of a company may not authorise financial assistance under such
sections without the approval of the shareholders of the company by special resolution (adopted within the previous
two years). Unfortunately, because of the narrow wording of the exemption for employee share schemes, it does not
appear to apply to share schemes whereby participation is offered by means of the transfer of the issued shares in the
company, such as the LTIP.
5.
At the General Meeting, the approval of ArcelorMittal Shareholders by special resolution will accordingly be sought, to
the extent required, to the provision of financial assistance by ArcelorMittal under the LTIP, including through the
funding of the acquisition cost of ArcelorMittal Shares for delivery to LTIP Participants in whom LTIP Conditional Awards
have vested.
13
Part 4: General
1.
The Company’s capital structure
The Company’s capital structure before and after the Disposal is set out below:
Before and after the Disposal
R’m
Share capital
Authorised share capital
1 200 000 000 ordinary shares of no par value
-
Issued share capital
445 752 132 ordinary shares of no par value
37
Total stated capital
37
44 550 255 ArcelorMittal Shares are held in treasury as at the Last Practicable Date.
Following implementation of the Disposal, 23 447 036 ArcelorMittal Shares will be held in treasury.
No issues of ArcelorMittal Shares were made during the three years preceding the Last Practicable Date.
2.
Information on the Directors and Managers
2.1.
Information on directors and managers
The full name, business address, function in the ArcelorMittal Group and principal activities performed by them
of each of the directors and senior managers of ArcelorMittal are set out in Annexure 1 to this Circular.
ArcelorMittal has no major subsidiaries.
2.2.
Directors beneficial interests in ArcelorMittal Shares
The interests of the Directors in ArcelorMittal Shares as at the Last Practicable Date, including former
directors who resigned during the last 18 months, are set out in the table below:
Director
Beneficial Shareholding
Direct
JRD Modise
DCG Murray
Total
Total Shareholdings
Indirect
Number
%
5 025
-
5 025
0,001
-
5 5571
5 557
0,001
5 025
5 557
10 582
0,002
1. DCG Murray indirectly acquired 4 000 shares between the Company’s last financial year end and the Last Practicable Date.
2.3.
Directors’ interests in transactions
The Directors, including Directors who have resigned in the last 18 months, have had no direct or indirect
interest in any transaction that the Company effected during the current or immediately preceding year, or in
an earlier financial year which remains in any respect outstanding or unperformed.
14
2.4.
Remuneration
The remuneration receivable by the Directors will not be varied in consequence of the Disposal.
3.
Expenses
3.1.
There have been no preliminary expenses incurred by the Company in the three years immediately preceding
the date of this Circular.
3.2.
The expenses, excluding VAT, relating to the Disposal, are detailed below and relate, inter alia, to:
Payable to
4.
R
Edward Nathan Sonnenbergs Inc.
Legal and Tax Advisers
2 000 000
Deloitte & Touche
Independent Reporting
Accountants
180 000
B1SA and Nkonki
BEE Rating Advisers and
Independent BEE Advisers
126 700
Vesco Reprographics
Printing and distribution
306 000
Bastion Graphics
SENS/newspaper
publishing
235 000
JSE Limited
JSE documentation
inspection fees
13 358
Other
640 000
Total
3 501 058
Market value of ArcelorMittal shares
A table of the aggregate volumes and values traded and the highest and lowest prices traded in ArcelorMittal Shares for
each month over the twelve months prior to the date of issue of this Circular, and for each day over the 30 days
preceding the Last Practicable Date prior to the date of issue of the circular, is attached hereto as Annexure 2.
5.
Business of ArcelorMittal and its subsidiaries
5.1.
ArcelorMittal, headquartered in Vanderbijlpark in South Africa’s Gauteng Province, is the largest steel producer
on the African continent, with a production capacity of 6.5 million tonnes of liquid steel (long and flat
products) per annum. It has in excess of 9 000 employees. In 2014 it yielded revenue of R35 billion.
5.2.
The Company has a depth of technical and managerial expertise carefully nurtured since being founded in
1928, a reputation for reliability and a sharply defined business focus, which has forged the organisation into a
modern, highly competitive supplier of steel products to the domestic and global markets.
5.3.
This has been achieved through on-going alignment with international best practices and a comprehensive
understanding of the steel business environment, ensuring the Company’s continued global competitiveness
and participation in international markets.
5.4.
ArcelorMittal's global standing is further underpinned as part of the world’s largest steel producer, the
ArcelorMittal group. The Company is the world's number one steel company, with 232 000 employees
worldwide.
5.5.
ArcelorMittal is the leader in all major global markets, including automotive, construction, household appliances
and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and
outstanding distribution networks.
15
5.6.
6.
Through this association ArcelorMittal has access to world-class research and development, best practice
processes, aggressive procurement contracts and international market leverage to ensure the Company
remains at the cutting edge of the international steel industry.
Opinion and recommendation
The Directors have considered the rules of the Trust Deed and are of the opinion that the adoption of the Scheme is in
the best interest of the Company and ArcelorMittal's Shareholders. Accordingly, the Board recommends that
Shareholders vote in favour of the resolutions required to effect the adoption and implementation of the Scheme.
7.
Directors’ responsibility statement
The Directors collectively and individually, accept full responsibility for the accuracy of the information contained in the
Circular and certify that, to the best of their knowledge and belief there are no facts that have been omitted which
would likely affect the importance of such information or make any statement false or misleading, and that all
reasonable enquiries to ascertain such facts have been made and that the Circular contains all information required by
the Listings Requirements.
8.
9.
Experts’ consent
8.1.
The Sponsor, Legal Advisers, Independent Reporting Accountants and the Transfer Secretaries have consented
in writing to act in the capacities stated and to their names being stated in this Circular and have not, prior to
the Last Practicable Date, withdrawn their consents prior to the publication of this Circular.
8.2.
The Independent Reporting Accountants have given and have not withdrawn their consent to the issue of this
Circular, with their reports in the form and context in which they are included.
Documents available for inspection
9.1.
10.
The following documents, or copies thereof, will be available for inspection at the offices of ArcelorMittal and
the Sponsor, respectively, which addresses are set out in the “Corporate Information” section of the Circular,
during normal business hours from Wednesday, 19 August 2015 up to and including,
Friday,18 September 2015:
9.1.1.
the Memorandum of Incorporation of the Company and its Subsidiaries;
9.1.2.
the Trust Deed;
9.1.3.
the Sale Agreement;
9.1.4.
the Contributions Agreement;
9.1.5.
the Reporting Accountants' Report, dated 12 August 2015;
9.1.6.
the audited annual financial statements of the Company for the financial years ended 31
December 2012, 31 December 2013 and 31 December 2014;
9.1.7.
a summary of the directors' service contracts entered into during the last three years;
9.1.8.
the written consent letters referred to in paragraph 8 above; and
9.1.9.
a signed copy of this Circular.
General meeting
10.1.
A General Meeting of ArcelorMittal Shareholders will be held at 09h00 on Friday, 18 September 2015 at The
Hyatt Regency Hotel, 191 Oxford Road, Rosebank, Johannesburg, in order to consider and approve the
resolutions set out in the notice of General Meeting included in this Circular.
10.2.
Shareholders are referred to page 1 of this Circular, which sets out the actions required of them in respect of
the matters dealt with in this Circular.
16
Signed on 17 August 2015 at Vanderbijlpark by P S O’Flaherty for and on behalf of all the other Directors of
ArcelorMittal Board, in terms of Powers of Attorney granted to him by such directors.
PS O’Flaherty
Chief Executive Officer
ArcelorMittal South Africa Limited
17 August 2015
Vanderbijlpark
17
Annexure 1 Information on Directors and Management
The table below sets out information pertaining to the current directors and company secretary of ArcelorMittal:
Name and age
Paul Sean O'Flaherty (52)
Nationality
South African
Business address
Executive Corporate
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Principal activities
Name and age
Dean Subramanian (42)
Nationality
South African
Business address
Executive Corporate
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Chief Financial Officer
Chief Financial Officer
Name and age
Paul Mpho Makwana (45)
Nationality
South African
Business address
Corporate Office
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Chairman
Independent Non-Executive Director
Chairman
Name and age
David Christopher Murray (70)
Nationality
South African
Business address
Corporate Office
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Chairman-Audit & Risk Committee
Board Member
18
Name and age
Nomavuso Patience Mnxasana (58)
Nationality
South African
Business address
Corporate Office
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Board Member
Name and age
Jacob Modise (48)
Nationality
South African
Business address
Corporate Office
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Chairman-Remuneration Social & Ethics Committee
Board Member
Name and age
Lumkile Mondi (53)
Nationality
South African
Business address
Corporate Office
ArcelorMittal
DelfosBoulevard
South Africa
Position/function
Non-Executive Director
Chairman-Share Trust Committee
Board Member
Name and age
Davinder Chugh (59)
Nationality
British
Business address
London
United Kingdom
ArcelorMittal
7th Floor Berkeley Square House
Berkeley Square
London
W1J 6DA
United Kingdom
Position/function
Member of Group Management Board, Chief Executive Officer for Africa and The
Commonwealth of Independent States (CIS)
19
Name and age
Marc Vereecke (56)
Nationality
Belgian
Business address
Boulevard d’Avranches 24-26
L-1160 Luxembourg
G.D. of Luxembourg
Position/function
Chief Operating Officer of ArcelorMittal Africa and CIS
Name and age
Ramesh Kothari (42)
Nationality
Indian
Business address
Boulevard d’Avranches 24-26
L-1160 Luxembourg
G.D. of Luxembourg
Position/function
Chief Financial Officer of ArcelorMittal Africa and CIS
Name and age
Nomonde Bam (31)
Nationality
South African
Business address
Main building: Corporate
ArcelorMittal
Delfos Boulevard
South Africa
Position/function
Company Secretary
Company Secretary
20
Annexure 2
Price and trading history
Monthly trading detail for the 12 months to 31 July 2015
ArcelorMittal South Africa Ltd
Date
31/07/14
31/08/14
30/09/14
31/10/14
30/11/14
31/12/14
31/01/15
28/02/15
31/03/15
30/04/15
31/05/15
30/06/15
31/07/15
Low
High
3010
3466
3550
3256
2720
2235
2074
2280
1862
1831
1549
1161
1022
3850
4200
4225
3900
3448
2885
2631
2699
2648
2184
2131
1645
1600
Volume
9 711 062
15 697 394
16 812 169
11 338 119
10 819 173
15 315 385
12 271 802
6 686 541
9 924 142
11 650 386
8 016 676
7 928 021
18 366 900
Value
329 699 312
608 024 438
664 509 488
413 467 216
335 438 049
388 625 677
286 801 447
171 053 071
223 463 235
232 306 373
145 435 991
116 485 839
252 427 073
Monthly trading detail for the 12 months to 31 July 2015
ArcelorMittal South Africa Ltd
Date
29/06/15
30/06/15
01/07/15
02/07/15
03/07/15
06/07/15
07/07/15
08/07/15
09/07/15
10/07/15
13/07/15
14/07/15
15/07/15
16/07/15
17/07/15
20/07/15
21/07/15
22/07/15
23/07/15
24/07/15
27/07/15
28/07/15
29/07/15
30/07/15
31/07/15
03/08/15
04/08/15
05/08/15
06/08/15
07/08/15
Low
High
1265
1161
1161
1022
1082
1197
1197
1161
1190
1178
1110
1207
1260
1316
1365
1400
1380
1491
1450
1338
1274
1275
1401
1443
1462
1280
1301
1415
1417
1427
1348
1300
1270
1209
1237
1270
1250
1220
1244
1220
1233
1334
1368
1385
1460
1495
1569
1561
1588
1519
1360
1417
1485
1560
1600
1495
1491
1515
1505
1547
Volume
363 388
454 133
658 887
1 094 740
625 638
294 182
399 235
289 054
212 545
487 523
365 704
554 176
554 998
568 188
1 370 537
2 708 431
883 022
402 839
937 365
1 589 571
430 401
1 232 177
413 576
1 833 887
460 224
327 229
268 193
545 344
868 967
931 602
Value
4 704 775
5 662 328
7 810 221
12 057 079
7 361 479
3 606 949
4 863 229
3 471 916
2 556 800
5 867 839
4 248 294
7 028 229
7 447 699
7 736 975
19 437 125
39 052 877
13 486 163
6 154 389
14 339 133
22 832 177
5 684 001
17 035 292
5 945 268
27 399 927
7 004 012
4 605 093
3 816 014
8 121 969
12 841 192
14 103 246
21
Annexure 3 Pro Forma Financial Information Relating to the Scheme
The pro forma financial information is presented in accordance with the provisions of the Listings Requirements of the JSE Limited
and the Guide on Pro Forma Financial information issued by the South African Institute of Chartered Accountants. These pro forma
financial effects are the responsibility of the Directors.
The pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information of
ArcelorMittal South Africa Limited has been presented and in terms of ArcelorMittal South Africa Limited’s accounting policies for
the financial year ended 31 December 2014. The pro forma financial effects have been presented for illustrative purposes only
and, because of their nature, may not give a fair reflection of ArcelorMittal South Africa Limited’s financial position, changes in
equity or results of operations post implementation of the Scheme.
It has been assumed for purposes of pro forma financial effects that the Scheme took place with effect from 1 January 2014 for
the statement of comprehensive income purposes and on 31 December 2014 for the statement of financial position purposes.
The pro forma financial information as out below should be read in conjunction with the report of the independent reporting
accountant which is included as Annexure 4 of this circular.
22
Pro forma statement of comprehensive income for the year ended 31 December 2014
The pro forma statement of comprehensive income presented below was prepared on the assumption that the Scheme was
effective on 1 January 2014.
A
Column
Note
Revenue
Raw materials and consumables used
Employee costs
B
C
Before the
Scheme
Impact of the
Scheme
Pro forma after
Rm
34 852
Rm
Rm
34 852
(21 339)
(21 339)
2
(3 764)
the Scheme
(72)
(3 836)
Energy
Movement in inventories of finished goods and
work-in-progress
(3 466)
292
(3 466)
292
Depreciation
(1 386)
(1 386)
Amortisation of intangible assets
Other operating expenses
Loss from operations
(24)
(24)
3
(5 466)
(301)
(4)
(76)
(5 470)
(377)
17
17
Finance costs
Gain recognised on loss of interest over former
associate
Income after tax from equity-accounted
investments
(605)
80
(605)
80
191
191
Loss before taxation
(618)
Finance and investment income
Income tax credit
Loss for the year
4
460
(158)
(76)
(694)
16
476
(60)
(218)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss
163
163
Exchange differences on translation of foreign
operations
445
445
Losses on available-for-sale investment taken
to equity
(29)
(29)
(253)
(253)
Share of other comprehensive income of equityaccounted investments
Total comprehensive income/(loss) for the
year
Loss attributable to:
Owners of the company
5
(60)
(55)
(158)
(60)
(218)
5
(60)
(55)
Total comprehensive income/(loss) attributable to:
Owners of the company
23
Column
A
B
C
Before the
Scheme
Impact of the
Scheme
Pro forma after
Rm
Rm
Rm
the Scheme
Loss and headline loss calculations
Loss attributable to owners of the company
(158)
(60)
(218)
Adjust for
Profit on disposal or scrapping of property,
21
21
(80)
(80)
(10)
(10)
plant and equipment
Gain recognised on loss of interest over
former associate
Profit on disposal of assets of associate
Headline loss
(227)
(60)
(287)
401 201 877
-
401 201 877
Loss per share (cents)
(39)
(15)
(54)
Headline loss per share (cents)
(57)
(14)
(71)
401 201 877
-
401 201 877
Diluted loss per share (cents)
(39)
(15)
(54)
Diluted headline loss per share (cents)
(57)
(14)
(71)
Weighted average number of shares in issue
Diluted weighted average number of shares
in issue
NOTES
1
General
-
Column A has been derived without adjustment from ArcelorMittal South Africa Limited’s audited consolidated financial statements for the year
ended 31 December 2014.
2
-
Column B illustrates the impact of the Scheme and elaborated on per note 2 – 5 below.
-
Column C illustrates the pro forma financial effects after the Scheme .
Estimated IFRS 2 charge calculated as the fair value of the Sale Shares spread over the vesting period of 5 years. The fair value per share at inception of the
Scheme is assumed at R17.
3
4
Estimated net tax credit calculated at 28% on the estimated IFRS 2 charge of R72 million, transaction costs of R4 million as well as the securities tax payable
by a group entity of R5 million calculated at 0.25% of R1 854 million on sale of the shares to the Trust. These tax adjustments are of a non-continuing nature.
5
6
There are no other post balance sheet events requiring an adjustment to the pro-forma financial information.
24
Pro forma statement of financial position as at 31 December 2014
The pro forma statement of financial position presented below was prepared on the assumption that the Scheme was
effective 31 December 2014.
Column
A
Note
B
C
Before the Scheme
Impact of the
Pro forma after the
(Rm)
Scheme (Rm)
Scheme (Rm)
Assets
Non-current assets
20 225
20 225
Property, plant and equipment
16 001
16 001
135
135
4 031
4 031
58
58
Intangible assets
Equity-accounted investments
Other financial assets
Current assets
12 801
Inventories
10 684
10 684
1 562
1 562
Taxation
64
64
Other financial assets
37
37
Trade and other receivables
Cash and bank balances
3
Total assets
(4)
12 797
454
(4)
450
33 026
(4)
33 022
20 722
(8)
20 714
Equity and liabilities
Equity
Stated capital
Reserves
Retained income
3&4
Non-current liabilities
Finance lease obligations
37
37
(1 294)
(1 294)
21 979
(8)
21 971
3 441
-
3 441
256
256
Provisions
1 720
1 720
Deferred income tax liability
1 204
1 204
261
261
Other payables
Current liabilities
8 863
Trade payables
6 402
Taxation
Other financial liabilities
4
18
4
8 867
6 402
4
22
11
11
1 000
1 000
92
92
Provisions
571
571
Other payables
769
769
Borrowings
Finance lease obligations
Total equity and liabilities
33 026
(4)
33 022
25
Column
A
Note
B
C
Before the Scheme
Impact of the
Pro forma after the
(Rm)
Scheme (Rm)
Scheme (Rm)
Net asset value (NAV) per share (cents)
5 165
(2)
5 163
Tangible net asset value (TNAV) per share (cents)
5 131
(2)
5 129
401 201 877
-
401 201 877
Total number of shares in issue
NOTES
1
General
-
Column A has been derived without adjustment from ArcelorMittal South Africa Limited’s audited consolidated financial statements for the year
ended 31 December 2014.
2
-
Column B illustrates the impact of the Scheme and elaborated on per note 2 – 5 below.
-
Column C illustrates the pro forma financial effects after the Scheme
Estimated IFRS 2 charge calculated as the fair value of the Sale Shares spread over the vesting period of 5 years. The fair value per share at inception of the
Scheme is assumed at R17.
3
4
Estimated net tax credit calculated at 28% on the estimated IFRS 2 charge of R72 million, transaction costs of R4 million as well as the securities tax payable
by a group entity of R5 million calculated at 0.25% of R1 854 million on sale of the shares to the Trust. These tax adjustments are of a non-continuing nature.
5
6
There are no other post balance sheet events requiring an adjustment to the pro-forma financial information.
26
Annexure 4
Accountants' Report on the Pro Forma Financial Information
Independent reporting accountants’ report on the pro forma financial information
“The Directors
Room N3-3, Delfos Boulevard
Vanderbijlpark
1911
Dear Sir(s) / Madam
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL
INFORMATION INCLUDED IN A CIRCULAR
We have completed our assurance engagement to report on the compilation of pro forma financial information of ArcelorMittal
South Africa Limited by the directors. The pro forma financial information, as set out in paragraph 5 and Annexure 3 of the circular
(“the circular”), to be dated on or about 19 August 2015, consists of a statement of comprehensive income and a statement of
financial position, and related notes. The pro forma financial information has been compiled on the basis of the applicable criteria
specified in the JSE Limited Listings Requirements.
The pro forma financial information has been compiled by the directors to illustrate the impact of the corporate action or event,
described in paragraph 1 of the circular, on the company’s financial position as at 31 December 2014, and the company’s financial
performance for the period then ended, as if the corporate action or event had taken place at 1 January 2014, being the
commencement date of the financial period for the purposes of the statement of comprehensive income and at 31 December
2014 being the last day of the financial period for the purposes of the statement of financial position. As part of this process,
information about the company’s financial position and financial performance has been extracted by the directors from the
company’s financial statements for the year ended 31 December 2014, on which an unmodified auditor’s report was issued on 10
March 2015.
Directors’ Responsibility for the Pro Forma Financial Information
The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria specified in
the JSE Listings Requirements and described in paragraph 5 and Annexure 3 of the circular.
Reporting Accountant’s Responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has been compiled, in all material
respects, by the directors on the basis specified in the JSE Listings Requirements based on our procedures performed. We
conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420, Assurance
Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus which is applicable to an
engagement of this nature. This standard requires that we comply with ethical requirements and plan and perform our procedures
to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all material respects, on
the basis specified in the JSE Listings Requirements.
For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical
financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement,
performed an audit or review of the financial information used in compiling the pro forma financial information.
As the purpose of pro forma financial information included in a prospectus is solely to illustrate the impact of a significant
corporate action or event on unadjusted financial information of the entity as if the corporate action or event had occurred or had
been undertaken at an earlier date selected for purposes of the illustration, we do not provide any assurance that the actual
outcome of the event or transaction at 31 December 2014 would have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material
respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used in
the compilation of the pro forma financial information provides a reasonable basis for presenting the significant effects directly
attributable to the corporate action or event, and to obtain sufficient appropriate evidence about whether:
•
The related pro forma adjustments give appropriate effect to those criteria; and
•
The pro forma financial information reflects the proper application of those adjustments to the unadjusted financial
information.
Our procedures selected depend on our judgement, having regard to our understanding of the nature of the company, the
27
corporate action or event in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
Our engagement also involves evaluating the overall presentation of the pro forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria
specified by the JSE Listings Requirements and described in paragraph 5 and Annexure 3 of the circular.
Deloitte & Touche
Registered Auditor
Per: Mandisi Mantyi
Partner
12 August 2015
Deloitte Place
The Woodlands
20 Woodlands Drive
Woodmead
Sandton
2146
National executive: *LL Bam Chief Executive *AE Swiegers Chief Operating Officer *GM Pinnock Audit DL Kennedy Risk Advisory *NB Kader Tax TP
Pillay Consulting *K Black Clients & Industries *JK Mazzocco Talent & Transformation *MJ Jarvis Finance *M Jordan Strategy S Gwala Managed
Services *TJ Brown Chairman of the Board *MJ Comber Deputy Chairman of the Board.
A full list of partners and directors is available on request.
* Partner and Registered Auditor
B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code
Member of Deloitte Touche Tohmatsu Limited”
28
ARCELORMITTAL SOUTH AFRICA LIMITED
Incorporated in the Republic of South Africa
Share code: ACL ISIN: ZAE000134961
("ArcelorMittal" or "the Company")
Notice of General Meeting of ArcelorMittal Shareholders
Important Notice
Where appropriate and applicable, the terms defined in the Circular to which this notice is attached and forms part of bear
the same meanings in this notice, and in particular, the resolutions set out below.
ArcelorMittal Shareholders are referred to the Circular, which sets out the information or explanatory material that they
may require in order to determine whether to participate in the general meeting of Shareholders and seek to influence the
outcome of the vote on the resolutions set out below.
Notice of General Meeting of ArcelorMittal Shareholders
Notice is hereby given to Shareholders that a general meeting of ArcelorMittal Shareholders will be held at The Hyatt
Regency Hotel, 191 Oxford Road, Rosebank, Johannesburg, on Friday, 18 September 2015 at 09h00 to: (i) deal with
such business as may lawfully be dealt with at the meeting and (ii) consider and, if deemed fit to approve, with or without
modification, the resolutions necessary for the Scheme.
In terms of the memorandum of incorporation and the JSE Listings Requirements, the quorum for the general meeting of
ArcelorMittal Shareholders is persons holding at least 25% of the voting rights that are entitled to be exercised in respect
of at least one matter to be decided at the general meeting of ArcelorMittal Shareholders (but not less than three
ArcelorMittal Shareholders), present in person or represented by proxy at the general meeting.
Section 63(1) of the Companies Act: Identification of meeting participants
Kindly note that meeting participants (including proxies) are required to provide reasonably satisfactory identification
before being entitled to attend or participate in a meeting. Forms of identification that will be accepted include original
and valid identity documents, drivers' licences and passports.
Record dates
In terms of sections 59(1)(a) and (b) of the Companies Act, the Board has set the record date for the purpose of
determining which ArcelorMittal Shareholders are entitled to:
• receive notice of the general meeting of ArcelorMittal Shareholders (being the date on which a Shareholder must be
registered in the Register as a Shareholder in order to receive notice of the general meeting of ArcelorMittal
Shareholders) as Friday, 7 August 2015 (therefore the last day to trade will be Friday, 31 July 2015); and
• participate in and vote at the general meeting of ArcelorMittal Shareholders (being the date on which the Shareholder
must be registered in the Register as a Shareholder in order to participate in and vote at the general meeting of
ArcelorMittal Shareholders) as Friday, 11 September 2015 (therefore the last day to trade will be Friday, 4
September 2015).
Special resolution number 1 – The disposal
“Resolved that, subject to the fulfilment of the conditions precedent to the Sale Agreement and on the terms and
conditions set out therein and the passing of Special Resolution Number 2, the disposal by Vicva of 21 103 219
ArcelorMittal Shares to the Trust, for an aggregate purchase consideration of R1 854 128 821, payable in
accordance with the provisions of the Sale Agreement, is hereby approved.”
In terms of the JSE Listings Requirements, Special Resolution Number 1, based on the requirements for specific issues for
cash, must be passed as an ordinary resolution by a 75% (seventy five percent) majority of the votes cast in favour
thereof by Shareholders present or represented by proxy at the general meeting. However, as the Companies Act
prescribes that there must at all times be a margin of at least 10 percentage points between the highest established
requirement for approval of an ordinary resolution on any matter, and the lowest established requirement for approval of
a special resolution on any matter, the resolution is instead proposed to be passed as a special resolution.
It must be noted that ArcelorMittal Shares held by the Company’s existing trusts or share schemes, or its Subsidiaries, will
not have their votes taken into account for purposes of approval of this resolution to the extent so prescribed in the
Listings Requirements.
Special resolution number 2 – Financial assistance in relation to the scheme
“Resolved that, to the extent required by the Companies Act, the Board may, subject to the passing of Special
Resolution Number 1 and subject to compliance with the requirements of the Company’s memorandum of
incorporation (if any), the Companies Act, and the JSE Listings Requirements, authorise the Company to provide direct
or indirect financial assistance to:
(i)
the Trust, as required to give effect to and in terms of the Trust Deed and/or the Contribution
Agreement;
(ii)
any present or future Qualifying Employee participating in the Scheme, as required to give effect
to and in terms of the Trust Deed.”
In terms of the Companies Act, Special Resolution Number 2 must be adopted with the support of at least 75% (seventy
five percent) of the voting rights exercised on the resolution by Shareholders present or represented by proxy at the
general meeting.
Special resolution number 3 – Financial assistance in relation to the LTIP
“Resolved that, to the extent required by the Companies Act, the Board may, subject to compliance with the
requirements of the Company’s memorandum of incorporation (if any), the Companies Act, and the JSE Listings
Requirements, authorise the Company to provide direct or indirect financial assistance under the LTIP as required to
give effect to and in terms of the LTIP, including through the funding of the acquisition cost of ArcelorMittal Shares
for delivery to LTIP Participants in whom LTIP Conditional Awards have vested.”
In terms of the Companies Act, Special Resolution Number 3 must be adopted with the support of at least 75% (seventy
five percent) of the voting rights exercised on the resolution by Shareholders present or represented by proxy at the
general meeting.
Ordinary resolution number 1 – Authority granted to the Directors
“Resolved, to the extent required, that each Director of ArcelorMittal be and is hereby individually authorised, on
behalf of ArcelorMittal, to enter into, sign and/or despatch any and all such agreements, documents and notices, as
may be necessary, expedient or desirable (in each case in the opinion of such Director) and do all such other things
and procure the doing of all such things as may be necessary for or incidental to the implementation of the Scheme,
and should any such agreements, documents or notices have been signed, or any such action taken before the date of
this resolution, such signature or action be and is hereby ratified and approved.”
The adoption of this Ordinary Resolution Number 1 will, to the extent required, authorise any director of the Company to
execute all documents and do all such further acts and things as he may in his discretion consider appropriate to
implement and give effect to the resolutions set out in this notice of General Meeting.
It must be noted that Shares held by the Company’s trust or share scheme or Subsidiaries will not have their votes taken
into account for JSE Listings Requirements resolution approval purposes.
Voting and proxies
A Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy or proxies to attend, speak
and vote in his/her stead. A proxy need not be a Shareholder of the Company. For the convenience of registered
Shareholders of the Company, a form of proxy is attached herewith.
The attached form of proxy is only to be completed by those Shareholders who:
•
hold ArcelorMittal Shares in certificated form; or
•
are recorded on the electronic sub-register in “own name” dematerialised form.
Shareholders who have dematerialised their Shares through a CSDP or Broker without “own name” registration and who
wish to attend the General Meeting, must instruct their CSDP or Broker to provide them with the relevant letter of
representation to attend the General Meeting in person or by proxy and vote.
If they do not wish to attend in person or by proxy, they must provide the CSDP or Broker with their voting instructions in
terms of the relevant Custody Agreement entered into between them and the CSDP or Broker.
Shareholders who hold Dematerialised Shares which are registered in their name or if they are the registered holder of
Certificated Shares may attend the General Meeting in person, alternatively, they may appoint a proxy or proxies, who
need not be a Shareholder of the Company to represent them at the General Meeting by completing the attached form of
proxy in accordance with the instructions it contains. It is requested that forms of proxy should be forwarded to reach the
Transfer Secretaries at least 48 hours, excluding Saturdays, Sundays and South African public holidays, before the time of
the General Meeting. Any form of proxy not delivered by this time may be handed to the Chairperson of the General
Meeting immediately before the appointed proxy exercises any of the Shareholder’s votes at the General Meeting.
Electronic participation
The Company has made provision for Shareholders or their proxies to participate electronically in the General Meeting by
way of telephone conferencing. Should a Shareholder wish to participate in the General Meeting by telephone conference
call as aforesaid, the Shareholder, or his/her/its proxy, will be required to advise the Company thereof by submitting by
email to the company secretary at [email protected] or by fax to +27 (0) 16 889 2517 for the attention
of Ms Nomonde Bam, relevant contact details, including an email address, cellular number and landline number, as well as
full details of the Shareholder’s title to the Shares and proof of identity, in the form of certified copies of identity
documents and Share certificates (in the case of Certificated Shares) and (in the case of Dematerialised Shares) written
confirmation from the Shareholder’s CSDP confirming the Shareholder’s title to the Dematerialised Shares, to reach the
Company by no later than 09h00 on Wednesday, 16 September 2015. Upon receipt of the required information by the
Company, the Shareholder concerned will be provided with a secure code and instructions to access the electronic
communication during the General Meeting. Shareholders must note that access to the electronic communication will be
at the expense of the Shareholder who wish to utilise the facility.
Shareholders and their appointed proxies attending the General Meeting by conference call will not be able to cast their
votes at the General Meeting through this medium. Accordingly, Shareholders making use of the electronic participation
facility are requested to submit their forms of proxy to the Company, as directed in this Circular.
By order of the Board
Nomonde Bam
Group Company Secretary
Vanderbijlpark
19 August 2015
Registered office
Room 3-3, Delfos Boulevard
South Africa
Transfer Secretaries
Computershare Investor Services Proprietary Limited
Ground Floor, 70 Marshall Street
Johannesburg, 2001
South Africa

Circular to ArcelorMittal Shareholders (ESOP)

Transcription

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