Notice to Bond Holders
British Aerospace PLC
13 January 2000
NOTICE
to the holders of the
£685,960,000 3.75 PER CENT. SENIOR UNSECURED EXCHANGEABLE
BONDS DUE 2006 of
BRITISH AEROSPACE PUBLIC LIMITED COMPANY
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'). On 29th December, 1999 BAE SYSTEMS exercised its
option to sell to Mannesmann 20,888,823 Orange shares. The
sale of such Orange shares was completed today. Of such
Orange shares which were sold to Mannesmann, 14,372,036 were
comprised in the Exchange Property in respect of the
£685,960,000 3.75 per cent. Senior Unsecured Exchangeable
Bonds due 2006 (the 'Exchangeable Bonds') immediately prior to
the sale ('exchange Orange shares') and 6,516,787 had been
purchased in the market by or on behalf of BAE SYSTEMS since
15th 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.
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:
(i) a total of 2,015,771 Mannesmann shares, of which
1,386,901 arise from such sale of exchange Orange shares
and 628,870 arise from such sale of newly acquired Orange
shares, the latter having replaced the total amount of
£91,981,030 of cash received from such sale of exchange
Orange shares at a price of £146.2640 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
(ii) 45,589,512 Orange shares, being the balance of the
Orange shares comprised in the Exchange Property which
have not been sold to Mannesmann.
There will be further adjustments to the Exchange Property in
the event that BAE SYSTEMS sells further exchange or newly
acquired Orange shares to Mannesmann pursuant to the
arrangements described above.
30th December, 1999 Issued by British Aerospace
Public Limited Company
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