Statement to 2009 Exchangeable Bond Holders
British Aerospace PLC
15 December 1999
ANNOUNCEMENT TO HOLDERS OF £685,960,000 3.75 PER CENT. SENIOR UNSECURED
EXCHANGEABLE BONDS DUE 2009 OF BRITISH AEROSPACE PUBLIC LIMITED COMPANY
Holders of £685,960,000 3.75 per cent. Senior Unsecured Exchangeable Bonds
due 2009 (the Exchangeable Bonds) of British Aerospace Public Limited Company
(BAE SYSTEMS) are referred to the announcement made today by BAE SYSTEMS a
copy of which is attached hereto. BAE SYSTEMS proposes to attempt to purchase
additional shares in Orange plc (Orange) in the market for cash consideration
in order that, upon exercise of its option to sell to Mannesmann, or upon
exercise of Mannesmanns option to purchase from BAE SYSTEMS, some or all of
its shares in Orange, the Exchange Property under the terms of the
Exchangeable Bonds will be entirely comprised of shares in Mannesmann. If BAE
SYSTEMS does not acquire enough additional Orange shares to achieve this in
full, it may still sell some or all of its Orange shares to Mannesmann
pursuant to the option and any cash forming part of the Exchange Property
under the terms of the Exchangeable Bond will be dealt with as described in
Condition 7(j) of the Exchangeable Bonds.
BAE SYSTEMS has determined, in accordance with the provisions of Conditions
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 the
arrangements (and in particular that the Mannesmann shares arising from the
acquisition of further Orange shares will form part of the Exchange Property,
instead of any cash arising from acceptance of the Mannesmann offer for Orange
being used to acquire further Mannesmann shares or gilts pursuant to Condition
7(j) of the Bonds after the event) and The Law Debenture Trust Corporation
p.l.c. (the Trustee) has given its prior written approval to such
determination. 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 Trustee has determined in good faith acting as
an expert, that the adjustment referred to above to the Exchange Rights is
fair and reasonable.
A further announcement will be made by BAE SYSTEMS in the event that the
composition of the Exchange Property changes.
Dated: 15 December 1999
BAE SYSTEMS HOLDING IN ORANGE
British Aerospace Public Limited Company (BAE SYSTEMS) and Mannesmann
Aktiengesellschaft (Mannesmann) have today entered into arrangements (the
arrangements) pursuant to which BAE SYSTEMS has an option to sell to
Mannesmann, and Mannesmann has an option to purchase from BAE SYSTEMS some or
all of its holding of shares in Orange plc (Orange). As at 14th December,
1999, BAE SYSTEMS owned 59,961,548 shares in Orange. Orange provides a range
of communication services, its core activity being the operation of the Orange
digital wirefree network in the UK and the sale and marketing of Orange
products and services both in the UK and internationally.
Under the terms of the arrangements, the consideration for the sale and
purchase of the Orange shares will be equivalent to the basic terms of
Mannesmanns offer for Orange of 0.0965 Mannesmann shares and £6.40 in cash for
each Orange share (which, based on BAE SYSTEMS current holding of shares in
Orange would be 5,786,289 Mannesmann shares and £383,753,907 in cash).
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