Company Name: AngloGold Ltd.
Public Availability Date: January 15, 2004
Securities Act of 1933 4(1) 144
Securities Act of 1933 5(a) 145
Securities Act of 1933 Section 3(a)(10) ---
Securities Act of 1933 Section 4(1) ---
Securities Act of 1933 Section 5(a) --- [INQUIRY LETTER]
January 12, 2004 Privileged and Confidential Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Paula Dubberly, Esq.
Associate Director (Legal)
Division of Corporation Finance Paul Dudek, Esq.
Chief, Office of International Corporate Finance
Division of Corporation Finance AngloGold Limited Section 3(a)(10); Rule 144; Rule 145 Ladies and Gentlemen: We are acting as United States counsel to AngloGold Limited, a publicly listed
company incorporated under the laws of the Republic of South Africa ("AngloGold").
AngloGold has entered into a Transaction Agreement, dated August 4, 2003, with
Ashanti Goldfields Company Limited, a publicly listed company incorporated under
the laws of the Republic of Ghana ("Ashanti") (as amended on September 2, 2003,
on September 23, 2003, on October 29, 2003, on November 13, 2003 and on December
12, 2003, the "Transaction Agreement"), pursuant to which AngloGold and Ashanti
have agreed to effect a business combination transaction (the "Transaction")
involving their respective companies. The Transaction will be implemented
through a scheme of arrangement (the "Scheme") under Section 231 of the Ghana
Companies Code, 1963 (Act 179), as amended (the "Ghana Companies Code"). Upon
the effectiveness of the Scheme, Ashanti will become a wholly owned subsidiary
of AngloGold, each issued and outstanding ordinary share, no par value per
share, of Ashanti (collectively, the "Ashanti Shares") will be transferred to
AngloGold and each holder thereof will be entitled to receive in exchange
therefor 0.29 ordinary shares, par value ZAR0.25 per share, of AngloGold ("AngloGold
Shares") (such number of AngloGold Shares issuable in exchange for each Ashanti
Share being the "Scheme Consideration"). Holders of Ashanti Shares resident in Ghana will be entitled to elect to receive
their Scheme Consideration in the form of either (i) AngloGold Shares, (ii)
AngloGold American Depositary Shares, each of which represents one AngloGold
Share ("AngloGold ADSs")1 or (iii) AngloGold Ghanaian Depositary Shares, one
hundred of which will represent one AngloGold Share ("AngloGold GhDSs").2 If no
election is made, such holders will receive AngloGold GhDSs. Holders of Ashanti
Shares resident outside of Ghana (other than holders of Ashanti Shares resident
in the United States) will be entitled to elect to receive their Scheme
Consideration in the form of either (i) AngloGold Shares or (ii) AngloGold ADSs.
If no election is made, such holders will receive AngloGold Shares. Holders of
Ashanti Shares resident in the United States will be entitled to elect to
receive their Scheme Consideration in the form of either (i) AngloGold Shares or
(ii) AngloGold ADSs. If no election is made, such holders will receive AngloGold
ADSs. In addition, pursuant to arrangements to be made with The Bank of New York, as
depositary for Ashanti Global Depositary Securities, each of which represents
one Ashanti Share ("Ashanti GDSs"), holders of Ashanti GDSs will be entitled to
elect to receive their Scheme Consideration in the form of either (i) AngloGold
Shares or (ii) AngloGold ADSs. If no election is made, such holders will receive
AngloGold ADSs. Ashanti has established a depository interest trust facility in the United
Kingdom to facilitate the indirect holding of, and settlement of transactions
in, Ashanti Shares by participants in CREST.3 Capita IRG Trustees Limited, as
custodian for the Ashanti Depositary Interests, each of which represents one
Ashanti Share ("Ashanti ADIs"), issued under this facility, has advised Ashanti
that, as at December 11, 2003, there were 67,480,178 Ashanti ADIs outstanding,
representing approximately 51.7% of the issued and outstanding Ashanti Shares.
Of the 67,480,178 Ashanti ADIs outstanding, 65,905,859 Ashanti ADIs (or 97.7% of
the Ashanti Shares represented by Ashanti ADIs), are held by BNY (Nominees)
Limited, as nominee for The Bank of New York, as depositary for Ashanti GDSs.4
Pursuant to arrangements to be made with Capita IRG Trustees Limited, as
depository for Ashanti ADIs, holders of Ashanti ADIs (other than BNY (Nominees)
Limited, which will only receive AngloGold Shares) will be entitled to elect to
receive their Scheme Consideration in the form of either (i) AngloGold Shares or
(ii) AngloGold ADSs. If no election is made, such holders will receive AngloGold
Shares. Ashanti also has a sponsored Zimbabwe Depositary Receipt ("Ashanti ZDR")
facility established for purposes of listing Ashanti ZDRs, one hundred of which
represent one Ashanti Share, on the Zimbabwe Stock Exchange in order to provide
greater liquidity within Zimbabwe. Ashanti has been advised by the registrar of
its Zimbabwe share register that there are approximately 138,007 Ashanti Shares
underlying Ashanti ZDRs outstanding, representing approximately 0.1% of the
issued and outstanding Ashanti Shares. Based on the information received by
Ashanti, as of November 4, 2003, there were no holders of Ashanti ZDRs with an
address in the United States. AngloGold and Ashanti intend to enter into
arrangements with the depositary for the Ashanti ZDRs under which the Scheme
Consideration to be distributed to such holders will either be held in trust for
the benefit of such holders or distributed or otherwise made available to such
holders. AngloGold intends to pay cash in lieu of any fractional AngloGold Shares or
fractional AngloGold ADSs (each, a "fractional interest"). Holders of fractional
interests resident in Ghana will be entitled to elect to receive AngloGold GhDSs
in lieu of cash. In accordance with Section 231 of the Ghana Companies Code, the Scheme may be
effected only if confirmed by the High Court of Ghana (the "High Court"). By this letter, we respectfully request confirmation from the staff of the
Division of Corporation Finance (the "Staff") that, based upon the facts and
circumstances described herein, it will not recommend any enforcement action to
the Securities and Exchange Commission (the "SEC") if, pursuant to the Scheme,
AngloGold issues AngloGold Shares to holders of Ashanti Shares (including
Ashanti Shares represented by Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs)
without registration of such AngloGold Shares under the Securities Act, in
reliance on the exemption from the registration requirements of the Securities
Act provided by Section 3(a)(10) thereof. In addition, we respectfully request
confirmation from the Staff that AngloGold Shares received by holders of Ashanti
Shares (and by holders of Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs) may be
resold in accordance with the limitations set forth in this letter. Ashanti and AngloGold have provided us with, and have authorized us to make on
their behalf, the factual representations about them set forth in this letter.
I. Background AngloGold is one of the world's largest gold producers by volume of gold
produced (as determined from the company reports published by the various gold
producers), with extensive reserves and production of some 6 million ounces of
gold annually. AngloGold Shares are listed on the JSE Securities Exchange South
Africa, the London Stock Exchange, the Australian Stock Exchange (in the form of
Clearing House Electronic Subregister System Depositary Interests) and Euronext
Paris and are quoted on Euronext Brussels (in the form of International
Depositary Receipts). AngloGold ADSs are listed and traded on the New York Stock
Exchange, and the AngloGold Shares underlying the AngloGold ADSs are also listed
on the New York Stock Exchange. In connection with the Scheme, AngloGold will
make an application to list AngloGold Shares and AngloGold GhDSs on the Ghana
Stock Exchange. AngloGold files periodic reports with the SEC pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Ashanti is engaged in the mining and processing of gold ores and the exploration
and development of gold properties in Africa. In 2002, Ashanti produced some
1.62 million ounces of gold. Ashanti Shares have a dual primary listing on the
Ghana Stock Exchange and the London Stock Exchange.5 Ashanti GDSs (representing
approximately 50.5% of the issued and outstanding Ashanti Shares) are listed and
traded on the New York Stock Exchange and the London Stock Exchange. Ashanti
Shares underlying the Ashanti GDSs are also listed on the New York Stock
Exchange. Ashanti Shares and Ashanti ZDRs are listed on the Zimbabwe Stock
Exchange. Ashanti files periodic reports with the SEC pursuant to Section 13 of
the Exchange Act. II. Description of the Scheme A. Introduction The issuance of AngloGold Shares in exchange for Ashanti Shares (including
Ashanti Shares represented by Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs) will
be implemented by means of the Scheme to be effected pursuant to Section 231 of
the Ghana Companies Code. The following description of the Scheme is based upon
discussions with the law firm of JLD Legal Consultancy Services, Ghanaian
counsel to AngloGold, and upon its opinion letter dated January 12, 2004 with
respect to the Scheme and the operation of Section 231 of the Ghana Companies
Code (the "Opinion Letter"). A copy of the Opinion Letter is attached hereto.
B. Procedure for Confirmation of the Scheme (i) Application to Convene Meetings and Appoint Reporter Ashanti will file an application (the "Application") with the High Court by way
of an originating motion on notice requesting that the High Court order that a
meeting of holders of Ashanti Shares be convened to consider and approve the
Scheme (the "Scheme Meeting"). As discussed in the Opinion Letter, the High
Court will be expected to hear the Application within 14 days after the
Application is filed.6 At the hearing of the Application, or at a subsequent
hearing, the High Court will order that the Scheme Meeting be convened and
determine those persons entitled to attend such meeting. Since the Ashanti
Shares are the only securities of Ashanti to be exchanged in the Scheme, Ashanti
and AngloGold expect that the Ashanti Shares will constitute the only securities
of Ashanti affected by the Scheme.7 Ashanti and AngloGold do not expect the High
Court to order a Scheme Meeting for any creditors of Ashanti.8 Although under
the Ghana Companies Code the High Court may require that a postal ballot be
taken in lieu of such Scheme Meeting, AngloGold and Ashanti do not expect the
High Court to do so as the wide and divergent shareholder base of Ashanti makes
a postal ballot impractical. As part of the Application, Ashanti will therefore
request the High Court to order that the vote be taken at the Scheme Meeting and
not by postal ballot. A copy of the scheme document (the "Scheme Document") and the AngloGold
information memorandum (the "AngloGold Information Memorandum" and, together
with the Scheme Document, the "Scheme Materials") to be sent to shareholders in
connection with the Scheme Meeting will be filed with the High Court. The Scheme
Materials will describe, among other things, AngloGold and the AngloGold Shares,
the terms and effects of the Scheme, the reasons for the Scheme and the
approvals required and conditions to be satisfied for the Scheme to be
effective. In addition, the Scheme Document will (i) include the notice
convening the Scheme Meeting, together with appropriate proxy or voting
instruction forms, (ii) set forth the scheduled date of the court hearing to be
held by the High Court to confirm the Scheme (the "Court Hearing") if it is
approved by the requisite majority of holders of Ashanti Shares at the Scheme
Meeting and (iii) contain information about the right of all Ashanti
shareholders to appear and be heard at the Scheme Meeting and the right of any
shareholder claiming to be affected by the Scheme to appear at the Court Hearing
and object to the Scheme. The AngloGold Information Memorandum will contain
financial information about both AngloGold and Ashanti. As part of the Application and as required by Section 231(2) of the Ghana
Companies Code, Ashanti will also request the High Court to instruct the
Registrar of Companies in Ghana (the "Registrar of Companies") to appoint an
independent investment bank or accounting firm (the "Reporter") to investigate
the fairness of the Scheme and to report thereon to the High Court. Although
Section 231(2) of the Ghana Companies Code contemplates the appointment of the
Reporter after the Scheme has been approved by the holders of Ashanti Shares at
the Scheme Meeting, Ashanti will request that the appointment be made
immediately after the hearing of the Application to provide the Reporter with
additional time to complete its investigation prior to the Court Hearing.
Ashanti and AngloGold will provide, or cause to be provided, to the High Court
and the Reporter information sufficient for them to determine the value of the
AngloGold Shares and the Ashanti Shares exchanged therefor and will provide, or
cause to be provided, to the Reporter such additional information and assistance
as may be reasonably requested by the Reporter in connection with its
investigation. In accordance with Section 231(3) of the Ghana Companies Code,
the fees (which are fixed by the Registrar of Companies) and expenses of the
Reporter will be borne by Ashanti or such other party to the application as the
High Court may order. After hearing the Application, the High Court will be expected to order that a
Scheme Meeting be convened to consider the Scheme and that the Registrar of
Companies appoint the Reporter. (ii) Notice of Scheme Meeting; Approvals Ashanti will mail copies of the Scheme Materials (including notice of the Scheme
Meeting) to holders of Ashanti Shares (and deliver such copies and notice to the
depositaries for the Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs) approximately
30 days prior to the Scheme Meeting.9 Ashanti will instruct the depositaries for
the Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs to deliver copies of the Scheme
Materials (including voting instruction forms) and notice of the Scheme Meeting
and the Court Hearing to holders of Ashanti GDSs, Ashanti ADIs and Ashanti
ZDRs.10 In addition, simultaneously with the mailing of the Scheme Materials,
Ashanti will publish notices of the Scheme Meeting and the Court Hearing in The
Daily Graphic, a newspaper of national circulation in Ghana, The Wall Street
Journal, a newspaper of national circulation in the United States and The
Financial Times, a newspaper of national circulation in the United Kingdom, or
in such other manner as the High Court may direct. In order to proceed with the Court Hearing, the Scheme must be approved by the
requisite vote of Ashanti shareholders. In connection with the Transaction
Agreement, AngloGold entered into a shareholder support deed of agreement, dated
August 4, 2003, as amended on October 17, 2003, with Lonmin Plc ("Lonmin"), the
holder of approximately 27.6% of the outstanding Ashanti Shares, pursuant to
which Lonmin agreed, among other things, to vote its Ashanti Shares in favour of
the Scheme. On December 12, 2003, AngloGold entered into a shareholder support
deed of agreement with the Government of Ghana, the holder of approximately
16.9% of the outstanding Ashanti Shares, pursuant to which the Government of
Ghana agreed, among other things, to vote its Ashanti Shares in favour of the
Scheme.11 (iii) Court Hearing Prior to the Court Hearing, the High Court will be advised that, if it confirms
the Scheme, such confirmation will be relied upon by AngloGold as an approval of
the Scheme for the purpose of qualifying for an exemption from the registration
requirements of the Securities Act with respect to the AngloGold Shares provided
by Section 3(a)(10) thereof. After the Scheme has been approved at the Scheme
Meeting by the requisite vote of Ashanti shareholders, the High Court will be
expected to confirm the date for the Court Hearing at which any shareholder
claiming to be affected by the Scheme will be entitled to appear and object. The
Scheme Materials mailed to shareholders (and to the depositaries for Ashanti
GDSs, Ashanti ADIs and Ashanti ZDRs, respectively, for delivery to the holders
thereof) in connection with the Scheme Meeting will also include notice of the
scheduled date, time and place of the Court Hearing and will state that such
shareholders have the right to attend the Court Hearing and object to the
Scheme. If the scheduled date of the Court Hearing is changed, Ashanti will give
at least five business days' notice thereof by delivering a press release for
immediate publication and distribution through the usual media channels in the
United States, the United Kingdom, South Africa and Ghana, and through the
Regulatory News Service of the London Stock Exchange and by publication of such
notice in The Daily Graphic, The Wall Street Journal and The Financial Times, or
in such other manner as the High Court may direct. If the scheduled date of the
Court Hearing is changed by more than seven days, Ashanti will also mail notice
of the date of the rescheduled Court Hearing to holders of Ashanti Shares (and
to the depositaries for the Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs for
delivery to the holders thereof). Section 231(5) of the Ghana Companies Code provides that shareholders claiming
to be affected by the Scheme have the right to be represented at the Court
Hearing and to object to the Scheme. As discussed in the Opinion Letter,
shareholders need not retain separate counsel in order to appear at the Court
Hearing, but may appear in person. As discussed in the Opinion Letter, the High
Court may establish procedures for the submission of objections to the Scheme.
In civil proceedings before the High Court, the Ghana Court Rules of Civil
Procedure generally require persons who wish to appear at a hearing before the
High Court to file a notice of appearance and an affidavit. Although the Ghana
Court Rules of Civil Procedure do not expressly apply to schemes of arrangement
under Section 231 of the Ghana Companies Code, there is a possibility that the
High Court could adopt procedures similar to those required by the Ghana Court
Rules of Civil Procedure for purposes of the Scheme. In such case, shareholders
who claimed to be affected by the Scheme and wished to appear at the Court
Hearing to object would be required to file a notice of appearance and an
affidavit with the High Court as directed by the High Court. If any such
shareholder did not timely file a notice of appearance and affidavit, such
shareholder might not have the right to appear at the Court Hearing, although
the High Court in its discretion could, and likely would, permit such
shareholder to object if such shareholder made a personal appearance at the
Court Hearing. According to the Opinion Letter, although the High Court could
adopt similar procedures for purposes of the Scheme, the High Court is not
likely to do so; it is likely to follow customary practice in the United Kingdom
and permit any shareholder who claims to be affected by the Scheme to appear at
the Court Hearing without having previously filed a notice of appearance or
affidavit. At the hearing of the Application, Ashanti and AngloGold will request
that the High Court adopt procedures for the Court Hearing that follow customary
practice in the United Kingdom for schemes of arrangement effected under Section
425 of the United Kingdom Companies Act 1985 (the "U.K. Companies Act").
Specifically, Ashanti and AngloGold undertake to request that shareholders have
the right to appear and object at the Court Hearing without first having to file
a notice of appearance or affidavit. Holders of Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs will not automatically
have the right to appear at the Scheme Meeting or the Court Hearing as such
holders are not shareholders of Ashanti. At the hearing of the Application,
Ashanti and AngloGold will request the High Court to permit holders of Ashanti
GDSs, Ashanti ADIs and Ashanti ZDRs to attend at the Court Hearing and to
object. Voting instructions will be solicited from holders of Ashanti GDSs,
Ashanti ADIs and Ashanti ZDRs and arrangements will be made with their
respective depositaries to vote the underlying Ashanti Shares beneficially owned
by such holders at the Scheme Meeting in accordance with their voting
instructions. In any event, holders of Ashanti GDSs, Ashanti ADIs and Ashanti
ZDRs may present their Ashanti GDSs, Ashanti ADIs or Ashanti ZDRs, as the case
may be, for cancellation and arrange for delivery of the underlying Ashanti
Shares, which, if registered in that holder's name in a timely manner, will
enable them to attend the Scheme Meeting and participate in the Court Hearing.
The Scheme Document will describe the procedures whereby holders of Ashanti
GDSs, Ashanti ADIs and Ashanti ZDRs who wish to attend the Scheme Meeting and
appear at the Court Hearing may cancel their Ashanti GDSs, Ashanti ADIs or
Ashanti ZDRs, as the case may be, and have the underlying Ashanti Shares
registered in their names and will advise such holders if the High Court permits
their appearance at the Court Hearing. Ashanti will appear at the Court Hearing on the scheduled date set forth in the
written notice and advertisement to request the High Court to confirm the
Scheme. If objections are lodged against the Scheme, the High Court may
determine to continue the Court Hearing at a later date to permit Ashanti and
AngloGold to respond to the objections. If the High Court determines to continue
the Court Hearing at a later date, the High Court will notify persons that have
lodged objections of the time of the continued hearing. In addition to notice by
the High Court, Ashanti will publish notice of the time and date of the
continued Court Hearing in The Daily Graphic, The Wall Street Journal and The
Financial Times, or in such other manner as the High Court may direct. As
discussed in the Opinion Letter, the High Court will consider whether the Scheme
is fair, procedurally and substantively, to shareholders and make an independent
determination whether to confirm the Scheme notwithstanding the approval of the
Scheme by the requisite vote of shareholders at the Scheme Meeting, the findings
of the Reporter and any objection raised by a shareholder claiming to be
affected by the Scheme. At the Court Hearing, the High Court will again be advised that, if it confirms
the Scheme, such confirmation will be relied upon by AngloGold as an approval of
the Scheme for the purpose of qualifying for an exemption from the registration
requirements of the Securities Act with respect to the AngloGold Shares provided
by Section 3(a)(10) thereof. (iv) Effectiveness of the Scheme Pursuant to the provisions of Section 231 of the Ghana Companies Code and
subject to the satisfaction of certain other conditions, the Scheme will not
become effective and binding unless and until: (1) the Scheme is confirmed by the High Court following the Court Hearing at
which the High Court considers the fairness report of the Reporter;12 and (2) a copy of the order of the High Court confirming the Scheme is delivered to
the Registrar of Companies, who will register the order and cause the order to
be published in the Gazette. Once the Scheme becomes effective, it will be binding on Ashanti and all
shareholders of Ashanti. III. Legal Analysis A. Section 3(a)(10) Exemption Section 3(a)(10) of the Securities Act provides an exemption from the
registration requirements of the Securities Act for, in relevant part: "... any security which is issued in exchange for one or more bona fide
outstanding securities, claims or property interests ... where the terms and
conditions of such issuance and exchange are approved, after a hearing upon the
fairness of such terms and conditions at which all persons to whom it is
proposed to issue securities in such exchange shall have the right to appear, by
any court ... or other governmental authority expressly authorized by law to
grant such approval." In
Revised Staff Legal Bulletin No. 3 (CF) (October 20, 1999) (the "Revised
Staff Legal Bulletin No. 3"), the Staff identified the following conditions that
must be satisfied before reliance may be made upon the exemption provided in
Section 3(a)(10):
(1) The securities must be issued in exchange for securities, claims or property
interests; they cannot be offered for cash.
(2) A court or authorized governmental entity must approve the fairness of the
terms and conditions of the exchange.
(3) The reviewing court or authorized governmental entity must (a) find, before
approving the transaction, that the terms and conditions of the exchange are
fair to those to whom securities will be issued, and (b) be advised before the
hearing that the issuer will rely upon the Section 3(a)(10) exemption based on
the court's or authorized governmental entity's approval of the transaction.
(4) The court or authorized governmental entity must hold a hearing before
approving the fairness of the terms and conditions of the transaction.
(5) A governmental entity must be expressly authorized by law to hold the
hearing, although it is not necessary that the law require the hearing.
(6) The fairness hearing must be open to everyone to whom securities would be
issued in the proposed exchange.
(7) Adequate notice of the hearing must be given to all those persons.
(8) There cannot be any improper impediments to the appearance by those persons
at the hearing.
As explained below, the Scheme will satisfy each of these conditions: (i) The Exchange Pursuant to the Scheme, AngloGold will issue AngloGold Shares in exchange for
Ashanti Shares (and Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs), and not for
cash or other consideration from the holders of Ashanti Shares (or Ashanti GDSs,
Ashanti ADIs or Ashanti ZDRs). (ii) High Court Approval The Staff has stated in
Section 4.B.4. of Revised Staff Legal Bulletin No. 3
that the term "any court" as used in Section 3(a)(10) includes a foreign court.
Further, the Staff has recognized the High Court of Justice in England and Wales
acting under Section 425 of the U.K. Companies Act as a foreign court qualified
to approve the fairness of the terms and conditions of an exchange. See, e.g.,
Global TeleSystems (Europe) Limited (available June 14, 2001); Omnicom Group
Inc. (available January 28, 1999); The Rank Organisation Plc, The Rank Group Plc
(available August 6, 1996). As discussed in the Opinion Letter, the Ghana
Companies Code is derived from the United Kingdom Companies Act of 1948 (the
"Companies Act of 1948") and Section 231 of the Ghana Companies Code is based on
Section 206 of the Companies Act of 1948 (the predecessor to Section 425 of the
U.K. Companies Act). Section 231 of the Ghana Companies Code is similar in all
material respects to Section 425 of the U.K. Companies Act, except for the
following differences: (1) Section 231 of the Ghana Companies Code provides for the appointment of an
independent reporter to investigate the fairness of the Scheme and to report
thereon to the High Court; and (2) Section 231 of the Ghana Companies Code requires that the Scheme be approved
by a three-fourths majority of shareholders rather than a majority of
shareholders in number representing three-fourths in value of shares.13 Similarly, the Staff has recognized courts in a number of other jurisdictions as
foreign courts qualified to approve the fairness of the terms and conditions of
a scheme of arrangement for the purposes of the Section 3(a)(10) exemption. See,
e.g., Gilat Satellite Networks Ltd. (available December 19, 2002) (Israeli
Court); Ashanti Goldfields Company Limited (available June 19, 2002) (Grand
Court of the Cayman Islands); Canadian Pacific Limited (available August 15,
2001) (Alberta Court of Queen's Bench); John Wood Group plc (available March 1,
2001) (Court of Session in Scotland); Gold Fields of South Africa Limited
(available January 21, 1998) (High Court of South Africa); and China Light &
Power Company, Limited (available January 2, 1998) (High Court of Hong Kong
Special Administrative Region). (iii) Determination of Fairness and Advice of Section 3(a)(10) Reliance As discussed in the Opinion Letter, the High Court will be required to consider
whether the Scheme is fair, procedurally and substantively, to each class of
persons who will receive AngloGold Shares in the Scheme14 before the High Court
can confirm the Scheme. In reaching its determination as to fairness, the High
Court will be expected to consider, among other things, the information in the
Scheme Document, the findings of the Reporter and any objections to the Scheme
raised by shareholders claiming to be affected by the Scheme. The Opinion Letter
indicates that the Reporter must be an expert independent of both parties and
will be required to ascertain the intrinsic fairness of the Scheme, to monitor
procedures and to ensure compliance with the statutory provisions. As discussed
in the Opinion Letter, Ashanti and AngloGold will provide, or cause to be
provided, to the High Court and the Reporter information sufficient for them to
determine the value of the AngloGold Shares and the Ashanti Shares exchanged
therefor. Ashanti and AngloGold will also provide, or cause to be provided, to
the Reporter such additional information and assistance as may be reasonably
requested by the Reporter in connection with its investigation. In addition, the
High Court will be provided with the report of the Chairman of the Scheme
Meeting on the results of the Scheme Meeting (including the number of
shareholders present in person or by proxy, the results of voting and the
proxies that have been rejected). Included in the Chairman's report will be a
report by a scrutineer on the verification of the counting of votes. In reaching
its determination as to fairness, the High Court has the authority to consider
any additional factors that it deems relevant. As discussed in the Opinion Letter, Ghanaian law is derived from English common
law, and Ghanaian courts (including the High Court) will consider English
precedent persuasive, especially when such precedent interprets legislation that
is substantially similar to Ghanaian legislation. As discussed in the Opinion
Letter, there is no Ghanaian case law interpreting Section 231 of the Ghana
Companies Code. According to the Opinion Letter, given that Ghanaian law
originates from English common law and that Section 231 of the Ghana Companies
Code is based on Section 206 of the Companies Act of 1948, the High Court would
consider and likely follow English cases establishing the role and function of
English courts in reviewing applications under Section 425 of the U.K. Companies
Act. Also, the Opinion Letter indicates that, in determining whether to exercise
its discretion to approve the Scheme, the High Court will likely follow
customary practice in the United Kingdom for approving schemes of arrangement
under Section 425 of the U.K. Companies Act that the Staff has sanctioned in the
past. The High Court will reach an independent decision as to fairness
notwithstanding the approval of the Scheme by the requisite vote of Ashanti
shareholders at the Scheme Meeting, the findings of the Reporter and any
objection raised by a shareholder claiming to be affected by the Scheme. The Opinion Letter confirms that Ashanti will inform the High Court prior to the
convening of the Scheme Meeting and again at the Court Hearing that, upon
confirmation of the Scheme by the High Court, such confirmation will be relied
upon by AngloGold as an approval of the Scheme for the purpose of qualifying for
an exemption from the registration requirements of the Securities Act with
respect to the AngloGold Shares provided by Section 3(a)(10) thereof. (iv) Court Hearing As discussed in the Opinion Letter, Section 231(5) of the Ghana Companies Code
provides for a hearing by the Court of the application to confirm the scheme of
arrangement at which a shareholder claiming to be affected thereby will have the
right to appear and to object. The High Court will conduct the Court Hearing to
determine whether the terms and conditions of the Scheme are fair to Ashanti's
shareholders and to approve the fairness of the terms and conditions of the
Scheme. As discussed in the Opinion Letter, the High Court has an independent obligation
to make a determination of fairness, notwithstanding the approval of the Scheme
by the requisite vote of Ashanti shareholders at the Scheme Meeting, the
findings of the Reporter and any objection raised by a person claiming to be
affected by the Scheme. (v) Authorization The Court Hearing will be held by a "court" for the purposes of Section 3(a)(10)
of the Securities Act. The High Court is expressly authorized by Section 231 of
the Ghana Companies Code to hold a hearing on the Scheme and to confirm the
Scheme. (vi) Open Hearing As discussed above, the Court Hearing will be open to attendance by any
shareholder claiming to be affected by the Scheme. (vii) Notice The Opinion Letter confirms that Ashanti will provide approximately 30 days'
notice of the scheduled date of the Court Hearing in the Scheme Document to all
shareholders (and holders of Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs). As
discussed below, the Scheme Document will also disclose the right of all holders
of Ashanti Shares to attend the Court Hearing and will include the information
necessary to exercise that right. If the scheduled date of the Court Hearing is
changed, Ashanti will give adequate notice of the date of the rescheduled Court
Hearing in the manner described above. (viii) No Improper Impediments There will be no improper impediments to the appearance at the Court Hearing by
any shareholder claiming to be affected by the Scheme. Any such shareholder is
entitled to appear before the High Court in person and object to the Scheme. As
discussed above, the High Court may establish procedures for the submission of
such objections. Although the Ghana Court Rules of Civil Procedure do not
expressly apply to schemes of arrangement under Section 231 of the Ghana
Companies Code, there is a possibility that the High Court could adopt similar
procedures for purposes of the Scheme. In that event, shareholders who claimed
to be affected by the Scheme and wished to appear at the Court Hearing to object
would be required to file a notice of appearance and affidavit with the High
Court as directed by the High Court. If any such shareholder did not timely file
a notice of appearance and affidavit, such shareholder might not have the right
to appear at the Court Hearing, although the High Court in its discretion could,
and likely would, permit such shareholder to object if such shareholder made a
personal appearance at the Court Hearing. According to the Opinion Letter,
although the High Court could adopt procedures similar to those required by the
Ghana Court Rules of Civil Procedure for purposes of the Scheme, the High Court
is not likely to do so; it is likely to follow customary practice in the United
Kingdom and permit any shareholder who claims to be affected by the Scheme to
appear at the Court Hearing without having previously filed a notice of
appearance or affidavit. The Scheme Document will describe the procedures and
timing requirements, if any, that holders of Ashanti Shares (and holders of
Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs) will have to follow to appear at
the Court Hearing and object to the Scheme. Since the procedures and timing
requirements would be directed by the High Court and the Scheme Document will
contain information with respect to such procedures and timing requirements, if
any, we do not believe that this would create an improper impediment to
appearance that will prevent shareholders claiming to be affected by the Scheme
from having a meaningful opportunity to appear at the Court Hearing. As
discussed above, at the hearing of the Application, Ashanti and AngloGold will
request that the High Court adopt procedures for the Court Hearing that follow
customary practice in the United Kingdom for schemes of arrangement effected
under Section 425 of the U.K. Companies Act. Specifically, Ashanti and AngloGold
undertake to request that shareholders have the right to appear and object at
the Court Hearing without first having to file a notice of appearance or
affidavit. Holders of Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs will not automatically
have the right to appear at the Court Hearing as such holders are not
shareholders of Ashanti. At the hearing of the Application, however, Ashanti and
AngloGold will request the High Court to permit the holders of Ashanti GDSs,
Ashanti ADIs and Ashanti ZDRs to attend the Court Hearing and object. In
addition, holders of Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs may present
their Ashanti GDSs, Ashanti ADIs or Ashanti ZDRs, as the case may be, for
cancellation and arrange for delivery of the underlying Ashanti Shares, which,
if registered in that holder's name in a timely manner, will enable them to
appear at the Court Hearing. All of the Ashanti Shares underlying Ashanti GDSs
are currently held in CREST. Ashanti has been advised by The Bank of New York,
as depositary for the Ashanti GDSs, that the exchange of Ashanti GDSs for
Ashanti Shares should take approximately five business days for delivery of
physical certificates. Ashanti has been advised by Capita IRG Trustees Limited,
as depository of the Ashanti ADIs, that the exchange of Ashanti ADIs for
underlying Ashanti Shares should take approximately five business days for
delivery of physical certificates. Ashanti has been advised by Temple Assets
(Private) Limited, as depositary for the Ashanti ZDRs, that the exchange of
Ashanti ZDRs for underlying Ashanti Shares should normally take approximately
two business days to complete. The Scheme Document will describe the procedures
that holders of Ashanti GDSs, Ashanti ADIs and Ashanti ZDRs who wish to appear
at the Court Hearing can follow to cancel their Ashanti GDSs, Ashanti ADIs or
Ashanti ZDRs, as the case may be, and have the underlying Ashanti Shares
registered in their names and will advise such holders if the High Court permits
their appearance. U.S. citizens travelling to Ghana will require a visa to enter Ghana as well as
a valid certificate of immunization against yellow fever. According to the
information set forth on the web-sites of the U.S. Department of State and the
Embassy of Ghana in Washington D.C., a visa application may be submitted by mail
and should typically be processed and granted within three business days.
Although applications for a business visa must be accompanied by an invitation
from principals in Ghana or the U.S., applications for a tourist visa do not
require such an invitation. The Scheme Document will, however, contain an
invitation that is expected to satisfy the requirements of the Embassy of Ghana
in Washington D.C. for the recipient to visit Ghana to attend the Scheme Meeting
and the Court Hearing. The Scheme Document will also advise shareholders of the
requirement to obtain a visa and immunization against yellow fever (which should
be performed two weeks prior to entering Ghana). Given that all shareholders
will receive notice of these requirements approximately 30 days prior to the
Court Hearing, we do not believe that these requirements create an improper
impediment to participation in the Court Hearing. Based on the foregoing, and in reliance on the Opinion Letter, we are of the
opinion that the right of all shareholders to appear at the Court Hearing to
object to the Scheme and to express their opinions regarding the faimess of the
terms of the Scheme will fulfil the requirements of Section 3(a)(10) of the
Securities Act and that the Scheme may be effected as described above without
compliance with the registration requirements of the Securities Act in reliance
on the exemption from such registration requirements provided by Section
3(a)(10) of the Securities Act. IV. Resale of AngloGold Shares The Staff has adopted the position that securities issued in Section 3(a)(10)
transactions must be resold by holders in the manner permitted by Rule 145(c)
and (d) under the Securities Act if those holders are affiliates of any party to
the exchange at the time of the Section 3(a)(10) exempt sale. See Revised Staff
Legal Bulletin No. 3, Section 5. Upon the basis of the foregoing it is our understanding that: (1) persons may resell their AngloGold Shares without regard to Rule 144 or
145(c) and (d) if they are not affiliates of AngloGold or Ashanti before the
completion of the Scheme and are not affiliates of AngloGold after the
completion of the Scheme; (2) persons may resell their AngloGold Shares in the manner permitted by Rule
145(d)(1), (d)(2) or (d)(3) if they (a) are affiliates of Ashanti or AngloGold
before the completion of the Scheme but (b) are not affiliates of AngloGold
after the completion of the Scheme. In computing the holding period of the
Section 3(a)(10) securities for purposes of Rule 145(d)(2) or (d)(3), such
persons may not "tack" the holding period of the securities exchanged for the
Section 3(a)(10) securities in the Section 3(a)(10) exempt transaction; and (3) persons may resell their AngloGold Shares in the manner permitted by Rule
145(d)(1) if they are affiliates of Ashanti or AngloGold before the completion
of the Scheme and are affiliates of AngloGold after the completion of the
Scheme. We respectfully request that the Staff confirm that it concurs in our view that
the AngloGold Shares would be permitted to be sold as described above. * * * We respectfully request the Staff's confirmation (a) that it will not recommend
any enforcement action to the SEC if the proposed Scheme is effected as
described above, without registration under the Securities Act of the AngloGold
Shares to be issued in exchange for Ashanti Shares (and Ashanti GDSs, Ashanti
ADIs and Ashanti ZDRs) in reliance on our opinion that no such registration is
required for the issuance, offer and sale of such securities by virtue of the
exemption from such registration provided by Section 3(a)(10) of the Securities
Act, and (b) as to the matters concerning resale of the AngloGold Shares set
forth under "Resale of AngloGold Shares" above. If for any reason you do not
concur with any of the opinions expressed in this letter, we respectfully
request an opportunity to confer with you prior to any written response. If you have any questions about this request or desire any additional
information regarding the matters discussed in this letter, please call the
undersigned at (+44 20) 7655-5550, George Casey at (+44 20) 7655-5065 or George
Karafotias at (+44 20) 7655-5576. In accordance with SEC Release 33-6269, we have enclosed an original and seven
copies of this letter. Please acknowledge receipt of the foregoing by stamping and returning the
enclosed receipt copy of this letter in the self-addressed, stamped envelope
enclosed for that purpose. Very truly yours, /s/ Bonnie Greaves Attachment -----FOOTNOTES----- 1 AngloGold ADSs issuable upon the deposit of each AngloGold Share exchangeable
for Ashanti Shares with The Bank of New York, as depositary of the AngloGold
ADSs, will be registered pursuant to a separate registration statement on Form
F-6. 2 AngloGold will establish a sponsored Ghanaian Depositary Share facility for
AngloGold Shares in Ghana. AngloGold GhDSs issuable upon the deposit of each
AngloGold Share with the depositary of the Ghanaian Depositary Share facility
will be issued without registration in reliance on the safe harbor of Regulation
S under the Securities Act of 1933, as amended (the "Securities Act"). 3 CREST is a system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by CRESTCo Limited in accordance
with the United Kingdom Uncertificated Securities Regulations 2001 (SI
No.2001/3755). 4 Capita IRG Trustees Limited has advised Ashanti that, of the remaining
1,574,319 Ashanti ADIs outstanding (or 2.3% of the Ashanti Shares represented by
Ashanti ADIs), (i) 167,894 Ashanti ADIs (or 0.25% of the Ashanti Shares
represented by Ashanti ADIs) are beneficially held by residents outside the
United States, (ii) 3,967 Ashanti ADIs (or 0.0058% of the Ashanti Shares
represented by Ashanti ADIs) are held by nominee holders incorporated in the
United States, (iii) 3,000 Ashanti ADIs (or 0.0044% of the Ashanti Shares
represented by Ashanti ADIs) are beneficially held by a private individual whose
residence has not been determined and (iv) 1,403,425 Ashanti ADIs (or 2.08% of
the Ashanti Shares represented by Ashanti ADIs) are held by nominee holders who
have not responded to requests to identify the residence of their beneficial
holders. 5 Although it is possible to trade Ashanti Shares in uncertificated form through
CREST in the form of Ashanti ADIs, Ashanti ADIs are not listed separately from
the underlying Ashanti Shares on the London Stock Exchange. 6 Upon filing the Application with the High Court, Ashanti will also serve the
Application on AngloGold, whereupon AngloGold may enter an appearance in respect
of the Application, provided that AngloGold does so within eight days after
receipt of such service. 7 The shareholders of Ashanti comprise (i) holders of Ashanti Shares (including
the Government of Ghana) and (ii) the Government of Ghana, as holder of the
special rights preference share, no par value per share, of Ashanti (the "Golden
Share"). The Golden Share will remain outstanding after consummation of the
Scheme. Under Section 231 of the Ghana Companies Code, the shareholders of a
company with shares incorporated under the Ghana Companies Code are referred to
as "members" of the company. For ease of reference, we use the term
"shareholders" in this letter to refer to the members of Ashanti. 8 Even if the High Court orders a separate Scheme Meeting for creditors of
Ashanti that claim to be affected by the Scheme, no creditors will receive
AngloGold Shares in the Scheme. 9 At least 21 days' prior notice of a general meeting is required under Section
152(2) of the Ghana Companies Code. 10 The Bank of New York, as depositary of the Ashanti GDSs, and Temple Assets
(Private) Limited, as depository of the Ashanti ZDRs, are required by the terms
of their respective amended and restated deposit agreements with Ashanti and the
owners from time to time of Ashanti GDSs and Ashanti ZDRs, to arrange for the
mailing of the Scheme Materials to holders of Ashanti GDSs and Ashanti ZDRs as
promptly as practicable. Capita IRG Trustees Limited, as depository of the
Ashanti ADIs, is required by the terms of the Deed Poll in favour of holders of
Ashanti ADIs to pass on the Scheme Materials to holders of Ashanti ADIs
forthwith upon receipt. 11 AngloGold and the Government have also agreed the definitive terms of a
stability agreement pursuant to which the Government will make certain fiscal
and regulatory undertakings in its role as regulator of Ashanti (the "Stability
Agreement"). AngloGold and the Government have agreed to enter into the
Stability Agreement promptly after approval of the principal terms of the
Stability Agreement by the Parliament of Ghana. In consideration of the
Government's undertakings in the Stability Agreement, AngloGold will issue to
the Government 2,658,000 AngloGold Shares and pay the Government US$5 million in
cash promptly after the later to occur of (i) the execution of the Stability
Agreement and (ii) the completion of the Transaction. The AngloGold Shares
issued to the Government will be issued without registration in reliance on the
safe harbor of Regulation S under the Securities Act. AngloGold has also agreed
to pay to the Government US$5 million in cash towards the transaction costs
incurred by the Government in its role as regulator of Ashanti. In addition,
AngloGold has agreed that if the Transaction Agreement is terminated by the
mutual written consent of AngloGold and Ashanti or AngloGold wrongfully
terminates the Transaction Agreement, in either case after the Parliament has
approved the Stability Agreement, AngloGold will promptly pay the Government US$
15 million in cash. 12 Section 231(6) of the Ghana Companies Code provides that the High Court may
prescribe such terms as it thinks fit as a condition to confirming the Scheme
(including an increase in the consideration payable pursuant to the Scheme).
Under the terms of the Transaction Agreement, the obligation of AngloGold to
consummate the Scheme is conditional upon there not having been any amendment or
modification to the terms and conditions of the Scheme in a manner detrimental
to AngloGold without the prior consent of AngloGold. 13 We understand that, if Ashanti requests the High Court to require that the
vote of shareholders at the Scheme Meeting be taken by a poll, the High Court
may require that the Scheme be approved by a three-fourths majority of shares
held by shareholders present, in person or by proxy, and entitled to vote and
voting, at the Scheme Meeting. 14 As discussed above, Ashanti and AngloGold expect that the Ashanti Shares will
constitute the only securities of Ashanti affected by the Scheme. [INQUIRY LETTER]
January 15, 2004 Bonnie Greaves, Esq. Shearman & Sterling LLP Broadgate West 9 Appold Street London EC2A 2AP, England Re: AngloGold Limited Dear Ms. Greaves: In regard to your letter of January 12, 2004, our response thereto is attached
to the enclosed photocopy of your correspondence. By doing this, we avoid having
to recite or summarize the facts set forth in your letter. Sincerely, /s/ Paul M. Dudek Chief Office of International Corporate Finance
[STAFF REPLY LETTER]
January 15, 2004 RESPONSE OF THE OFFICE OF INTERNATIONAL CORPORATE FINANCE DIVISION OF
CORPORATION FINANCE Re: AngloGold Limited ("AngloGold") Incoming letter dated January 12, 2004 Based on the facts presented, the Division will not recommend enforcement action
to the Commission if AngloGold, in reliance on your opinion of counsel that the
exemption under Section 3(a)(10) of the Securities Act of 1933 ("Securities
Act") is available, issues its ordinary shares ("AngloGold Shares"), including
AngloGold Shares in the form of AngloGold American Depositary Shares ("AngloGold
ADSs") and AngloGold Ghanian Depositary Shares ("AngloGold GhDSs"), to the
holders of the ordinary shares of Ashanti Goldfields Company Limited ("Ashanti
Shares"), including Ashanti Shares represented by Ashanti Global Depositary
Securities ("Ashanti GDSs"), Ashanti Depositary Interests ("Ashanti ADIs"), and
Ashanti Zimbabwe Depositary Receipts ("Ashanti ZDRs"), pursuant to the scheme of
arrangement ("Scheme"), each as described in your letter, without registration
under the Securities Act. In reaching this position, we have noted that:
- the High Court of Ghana ("the Court") will conduct a hearing on the fairness
of the Scheme to the holders of Ashanti Shares;
- the Court will approve the fairness of the terms and conditions of the Scheme
to the holders of Ashanti Shares before issuance of the AngloGold Shares
pursuant to the Scheme;
- all prospective recipients of the AngloGold Shares under the Scheme will
receive notice of the hearing regarding the Scheme and will have the opportunity
to be heard at the hearing; and
- the Court will be advised before the hearing that, if the Court approves the
terms and conditions of the Scheme, its sanctioning of the Scheme will
constitute the basis for the issuance of the AngloGold Shares under the Scheme
without registration under the Securities Act, in reliance on the exemption from
registration provided by Securities Act Section 3(a)(10).
The Division is of the view that the AngloGold Shares received pursuant to the
Scheme will not be "restricted securities" within the meaning of Securities Act
Rule 144(a)(3). Further, the Division is of the view that recipients of the
AngloGold Shares may resell these securities as follows: (1) Persons who are not affiliates of AngloGold or Ashanti before completion of
the Scheme, and who are not affiliates of AngloGold after completion of the
Scheme, may resell the AngloGold Shares they receive under the Scheme without
regard to Securities Act Rule 144 or 145(c) and (d). (2) Persons who are affiliates of AngloGold or Ashanti before completion of the
Scheme, but who are not affiliates of AngloGold after completion of the Scheme,
may resell the AngloGold Shares they receive under the Scheme in accordance with
Securities Act Rule 145(d)(1), (d)(2) or (d)(3). However, when computing the
holding period of the Section 3(a)(10) securities for purposes of Rule 145(d)(2)
or (d)(3), such persons may not "tack" the holding period of the securities
exchanged for the Section 3(a)(10) securities in the Section 3(a)(10) exempt
transaction. (3) Persons who are affiliates of AngloGold or Ashanti before completion of the
Scheme and are affiliates of AngloGold after completion of the Scheme may resell
the AngloGold Shares they receive under the Scheme in the manner permitted by
Securities Act Rule 145(d)(1). These positions are based upon the representations made in your letter to the
Division. Any different facts or conditions might require a different
conclusion. Moreover, regarding whether the Section 3(a)(10) exemption from
registration is available for the AngloGold Shares to be issued under the Scheme
of Arrangement, this response expresses the Division's position on enforcement
action only and does not express any legal conclusion on the question presented.
Sincerely, /s/ Elliot B. Staffin Special Counsel
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