Exchangeable Bonds Due 2006
British Aerospace PLC
3 February 2000
NOTICE
to the holders of those of the
£685,960,000 3.75 PER CENT. SENIOR UNSECURED EXCHANGEABLE BONDS DUE 2006 of
BRITISH AEROSPACE PUBLIC LIMITED COMPANY
presently outstanding
(the 'Exchangeable Bonds')
of an
ADJUSTMENT TO THE EXCHANGE PROPERTY
British Aerospace Public Limited Company ('BAE SYSTEMS') announced on 15th
December, 1999 that it has entered into arrangements pursuant to which BAE
SYSTEMS has an option to sell to Mannesmann Aktiengesellschaft ('Mannesmann'),
and Mannesmann has an option to purchase from BAE SYSTEMS, some or all of BAE
SYSTEMS' holding of shares in Orange plc ('Orange'). These arrangements have
subsequently been extended. On 31st January, 2000 BAE SYSTEMS exercised its
option to sell to Mannesmann 26,091,409 Orange shares. The sale of such
Orange shares was completed on 1st February, 2000. Of such Orange shares
which were sold to Mannesmann, 23,318,859 were comprised in the Exchange
Property in respect of the Exchangeable Bonds immediately prior to the sale
('exchange Orange shares') and 2,772,550 had been purchased in the market by
or on behalf of BAE SYSTEMS since 30th December, 1999 ('newly acquired Orange
shares'). The consideration for the sale of such Orange shares was equivalent
in value to the basic terms of Mannesmann's offer for Orange of 0.0965 of a
Mannesmann share and £6.40 in cash for each Orange share.
As at the date of this notice, Exchange Rights have been exercised in respect
of £9,030,000 in principal amount of Exchangeable Bonds. Of these Exchangeable
Bonds, £20,000 in principal amount have been exchanged under the terms of the
Exchangeable Bonds for a pro rata share of the Exchange Property. In respect
of £9,010,000 in principal amount of Exchangeable Bonds, BAE SYSTEMS has
exercised its right under Condition 6(b) to purchase such Exchangeable Bonds
at a purchase price equal to the Cash Value of the pro rata share of the
Exchange Property. Such Exchangeable Bonds have been cancelled in accordance
with Condition 8(d). Accordingly, the aggregate principal amount of
Exchangeable Bonds presently outstanding is £676,930,000.
BAE SYSTEMS determined on 15th December, 1999, in accordance with the
provisions of Condition 7(h) of the Exchangeable Bonds, that an adjustment
should be made to the Exchange Rights under the terms of the Exchangeable
Bonds to reflect any sale of Orange shares to Mannesmann pursuant to the
arrangements described above. In accordance with Condition 7(h) of the
Exchangeable Bonds, an independent investment bank of international repute
selected by BAE SYSTEMS and approved in writing by The Law Debenture Trust
Corporation p.l.c., as trustee for the holders of the Exchangeable Bonds, has
determined in good faith, acting as an expert, that the adjustment referred to
below to the Exchange Rights is fair and reasonable.
Following the sale by BAE SYSTEMS of those of its Orange shares referred to in
the first paragraph above, the Exchange Property has been adjusted so that it
shall comprise an aggregate total of 8,095,912 Mannesmann shares, of which:
(i) 2,015,771 arise from the sale of Orange shares to Mannesmann on 30th
December, 1999
(ii) 3,015,624 arise from the sale of Orange shares to Mannesmann on 14th
January, 2000
(iii) 2,250,269 arise from the sale of exchange Orange shares described above;
and
(iv) 814,248 arise from the sale of newly acquired Orange shares described
above and the acquisition of Mannesmann shares in the market, replacing the
total amount of £149,240,697 of cash received from such sale of exchange
Orange shares at a price of £183.29 per Mannesmann share (being the average
notional price of those Mannesmann shares by reference to the purchase price
of the newly acquired Orange shares and the purchase price of the Mannesmann
shares purchased in the market).
The Exchange Property per Exchangeable Bond is accordingly 119,597 Mannesmann
shares.
Issued by British Aerospace Public Limited Company
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