AngloGold Proposes Offer for Normandy.Business Editors JOHANNESBURG, South Africa--(BUSINESS WIRE)--Sept. 5, 2001 The Board of AngloGold (NYSE NYSE See: New York Stock Exchange :AU) is pleased to announce its intention to make an offer ("the offer") to acquire the entire issued share capital of Normandy Mining Limited ("Normandy"), Australia's largest and leading gold company ("the transaction"). The offer, which is detailed below, is to be settled in AngloGold shares in the ratio of 2.15 AngloGold shares per 100 Normandy shares. The offer values Normandy at A$ 3.17 billion (A$1.42 per share), based on the closing price of AngloGold in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of on 4 September 2001. This represents a premium of 29% to Normandy's closing share price on the Australian Stock Exchange Australian Stock Exchange (ASX) Australia's major securities market, formed when the six state stock exchanges (Adelaide, Brisbane, Hobart, Melbourne, Perth, and Sydney stock exchanges) were merged in 1987. on 4 September 2001. Based on the 30 trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. weighted average share prices to 4 September 2001 of Normandy and AngloGold in Australia and New York respectively, the offer represents a 33% premium. Creating the first truly global gold company The combination of AngloGold and Normandy will create the world's first truly global gold company. Following the transaction, the enlarged AngloGold will be the largest gold producer in both Australia and Africa and will be a significant gold producer in North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . This profile is not matched by any other gold company. This represents an important step in the consolidation of the gold industry. The enlarged AngloGold will have a more diverse production portfolio, with quality mining operations in five continents, and with a good balance between deep level and shallow underground and open pit operations. Normandy's strong operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , combined with those of AngloGold, position the combined company to complete major new capital programmes that bring to account new low cost gold ounces, to grow profits and reduce debt while maintaining existing high levels of dividend payments. The transaction is expected to be accretive to AngloGold's earnings per share for the foreseeable future. The transaction is also accretive on an operating cash flow per share basis. The enlarged AngloGold will have the highest earnings before net interest, taxation, depreciation and amortisation ("EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ") in the gold industry. The transaction will almost double the free float Free float An exchange rate system characterized by the absence of government intervention. Also known as clean float. of AngloGold shares which should significantly enhance trading liquidity. This together with risk diversification and the other benefits of the transaction will assist with a possible re-rating of AngloGold shares. Normandy is Australia's leading gold company and the world's seventh largest gold producer. For the year ended 30 June 2001 Normandy produced 2.3 million ounces at a cash cost of US$162/oz and a total cost of US$224/oz and had attributable reserves and resources of approximately 26.4 and 59.3 million ounces respectively. Normandy owns some of the most attractive gold properties in Australia, including: a 50% interest in the Super Pit, near Kalgoorlie in Western Australia Western Australia, state (1991 pop. 1,409,965), 975,920 sq mi (2,527,633 sq km), Australia, comprising the entire western part of the continent. It is bounded on the N, W, and S by the Indian Ocean. Perth is the capital. ; a 50% interest in the Pajingo mine in Queensland; an 87.5% interest in the Tanami operations in the Northern Territory; a 100% interest in the Yandal operations in Western Australia; and a 44.44% interest in the Boddington gold operations in Western Australia (in joint venture with AngloGold). Additionally Normandy owns a number of attractive assets outside Australia including the Midas (Ken Snyder) mine in Nevada in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and has a 49.9% interest in TVX TVx Target Vertex TVX Transmission Valid Timer (FDDI) TVX Valid Transmission Normandy Americas which has interests in five mines in North and South America. Normandy also has an extensive exploration portfolio and a very successful exploration team. AngloGold's existing portfolio includes low cost, high producing operations such as Great Noligwa, Tau Tona and Kopanang in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , Geita in Tanzania, Morila in Mali and Sunrise Dam in Western Australia, low cost producers in Brazil and Argentina and a major expansion project in the Cripple Creek Cripple Creek, village (1990 pop. 584), alt. 9,375 ft (2,858 m), seat of Teller co., central Colo.; inc. 1892. Primarily a summer resort, it was once a gold-mining boomtown. & Victor joint venture in Colorado. The combination of these two asset bases creates a gold company of unrivalled potential. The transaction will deliver significant benefits to shareholders of the combined company:
- The transaction will reduce AngloGold's gearing, expressed as the ratio of
net debt to total capital, from approximately 30% to around 25%.
- The transaction will lift AngloGold's market capitalisation to approximately
US$5.5 billion, thereby increasing the universe of potential large cap
institutional investors, which will further enhance the potential for
re-rating.
- The resulting increase in AngloGold's issued capital by some 48 million
shares will almost double the free float of AngloGold's shares which should
significantly enhance trading liquidity in Johannesburg, New York and,
particularly, on the Australian Stock Exchange. The transaction will also
improve the enlarged AngloGold's weighting in the indices of the various stock
exchanges on which it is listed.
- AngloGold has established a reputation as a high dividend payer, with an
established practice of paying out most of its free cash flow to shareholders.
The improvement in its cash flow should ensure that this practice continues.
Production for the six months ended 30 June 2001
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Region Before After
'000 ounces % '000 ounces %
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South Africa 2,325 67.4 2,325 49.5
Africa 406 11.8 422 9.0
Australia 250 7.2 1,286 27.4
North America 255 7.4 388 8.2
South America 213 6.2 275 5.9
Europe 0 0.0 3 0.0
Total 3,449 100.0 4,699 100.0
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Reserves
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Region Before After
'000 ounces % '000 ounces %
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South Africa 56,000 69.8 56,000 52.5
Africa 8,100 10.1 11,800 11.1
Australia 6,100 7.6 23,100 21.7
North America 6,100 7.6 8,700 8.2
South America 3,900 4.9 5,500 5.2
Europe 0 0 1,500 1.3
Total 80,200 100.0 106,600 100.0
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Total production from shallow underground and surface mines will increase from around 40% to around 56%. EBITDA from shallow underground and surface mines will increase from 56% to around 70%. - The transaction will reduce AngloGold's gearing, expressed as the ratio of net debt to total capital, from approximately 30% to around 25%. - The transaction will lift AngloGold's market capitalisation to approximately US$5.5 billion, thereby increasing the universe of potential large cap institutional investors, which will further enhance the potential for re-rating. - The resulting increase in AngloGold's issued capital by some 48 million shares will almost double the free float of AngloGold's shares which should significantly enhance trading liquidity in Johannesburg, New York and, particularly, on the Australian Stock Exchange. The transaction will also improve the enlarged AngloGold's weighting in the indices of the various stock exchanges on which it is listed. - AngloGold has established a reputation as a high dividend payer, with an established practice of paying out most of its free cash flow to shareholders. The improvement in its cash flow should ensure that this practice continues. The transaction represents another significant step in the consolidation of the gold industry. This will position the combined company to take advantage of new opportunities that will emerge in the continuing consolidation of the sector, including strategic gold marketing benefits and rationalisation through the disposal and exchange of assets Exchange of assets Acquisition of another company by purchase of its assets in exchange for cash or stock. , so as to realise greater operating and cost efficiencies. Shareholders of Normandy who accept the offer will, by virtue of the share exchange, have the opportunity to participate in these potential benefits. In addition, Normandy's shareholders will also benefit from the substantial premium to the market share price being offered, AngloGold's high dividend payout, immediate access to AngloGold's New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. listing, the trading liquidity in its share in New York and Johannesburg and the advantages of the new company's size. Description of the Normandy operations Normandy is Australia's largest gold company with an enviable operational and exploration track record. The company has operations and exploration assets in all of Australia's major gold producing regions. These operations include: - an equal partnership interest (together with Homestake/Barrick) in Kalgoorlie Consolidated Gold Mines Proprietary Limited, which owns and operates the Kalgoorlie Super Pit, situated directly adjacent to the town of Kalgoorlie in Western Australia; - an 87.45% interest in Normandy NFM NFM Nebraska Furniture Mart NFM Network File Management NFM Network Fault Management NFM No Further Message NFM Near Field Monitor NFM National Firearms Museum (Fairfax, Virginia) NFM NATOPS Flight Manual NFM Northern Fowl Mite Limited, a public, listed company, which owns and operates the company's Tanami operations, located in the Tanami Desert The Tanami Desert is a desert in northern Australia. It has a rocky terrain with small hills. The Tanami Desert is one of the most isolated and arid places on Earth. The Tanami was the Northern Territory's final frontier and wasn't fully explored until well into the twentieth region of the Northern Territory, approximately 550 kilometres northwest of Alice Springs Alice Springs, town (1991 pop. 20,448), Northern Territory, Australia. It lies in a pastoral area surrounded by desert near the center of the continent and is a stop on the Adelaide Darwin Railway. ; - a 100% interest in the Yandal Operations which comprise the Jundee, Bronzewing Bronzewing standard domestic turkey; black with bronzing on neck and back, and bronze barring on tail, which has a wide, white end-stripe. The female has white end-stripes on breast, back and wing bows, and secondary bows. Shanks are blackish-pink. and Wiluna mines situated in the Yandal, Norseman-Wiluna belt of Western Australia. These mines are situated between 350 and 500 kilometres north of Kalgoorlie. Normandy also owns significant tenements in this region; - a 44.44% interest in the Boddington gold mine situated 120 kilometres southeast of Perth in Western Australia (AngloGold currently holds a 33.33% interest in Boddington with the remaining interest held by Newcrest Mining Newcrest Mining Limited (ASX: NCM) engages in the exploration, development, mining and sale of gold and gold-copper concentrate. Newcrest is an Australian based Company which initially incorporated in Victoria in 1980. Limited). The mine is operated by Worsley Alumina Proprietary Limited; - an equal joint venture interest in the Pajingo Operations (together with Newmont Mining Newmont Mining Corporation NYSE: NEM, based in Denver, Colorado, USA, is one of the world's largest producers of gold, with active mines in, Nevada, Indonesia, Australia/New Zealand, Ghana, and Peru. Some smaller operations include Bolivia, Mexico, and Canada. Limited) situated approximately 200 kilometres south/southwest of Townsville in North Queensland; and - a 76.6% interest in Normandy Mt Leyshon Limited, a public, listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → , which owns and operated (prior to closure) the Mt Leyshon mine situated 171 kilometres south/southwest of Townsville in North Queensland North Queensland is the northern part of the state of Queensland in Australia. Queensland is a massive state, larger than most countries, and the Tropical northern part of it has been historically remote and underdeveloped, resulting in a distinctive regional character and . Normandy also has interests in a diverse international portfolio of gold assets. These include: - a 100% interest in the Midas (Ken Snyder) mine and adjoining tenements situated on the Carlin car·line or car·lin n. Scots A woman, especially an old one. [Middle English kerling, from Old Norse, from karl, man.] Trend in the state of Nevada, United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ; - a 49.9% interest in TVX Normandy Americas which owns: - a 49% interest in the New Britannia mine situated in Canada (51% owned and operated by High River Gold); - a 32% interest in the Musselwhite mine situated in Canada (68% owned and operated by Placer Dome Placer Dome was a large mining company specializing in gold and other precious metals, with corporate headquarters in Vancouver, British Columbia, Canada. Barrick has acquired 100% of the Placer Dome shares on January 20, 2006, and has integrated the company into its own. ); - a 50% interest in the Brasilia/Paracatu mine situated in Brazil (50% owned and operated by Rio Tinto Rio Tinto may refer to:
- a 50% economic interest in the Crixas (Serra Grande) mine situated in Brazil (50% owned and operated by AngloGold); and - a 50% interest in the La Coipa mine situated in Chile (50% owned and operated by Placer Dome). - a 67.1% interest in the Martha Hill Martha Hill (December 1, 1900 – November 19, 1995) was an influential American dance instructor. She was the first Director of Dance at the Juilliard School, and held that position for 34 years. Biography Hill was born in East Palestine, Ohio. mine located adjacent to the town of Waihi, 110 kilometres southeast of Auckland on the North Island of New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. ; - a 90% interest in the Yamfo-Sefwi mine (feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. stage), situated on the Yamfo-Sefwi Belt in Ghana, a 50% interest in the adjoining E. Ntotoroso (in exploration stage) and an 80% interest in Akim (Kenbert) (in exploration stage) also situated in Ghana; - a 51% interest in the Ity mine situated in Cote d'Ivoire; - 100% interest in the Ovacik mine (which recently commenced production) and the Mastra mine (feasibility stage) situated in Turkey; and - an 80% interest in the Perama Project situated in Greece. Normandy also has certain non-gold interests. These include: - a 100% interest in the Golden Grove
metals operation, situated 225 kilometres east of the town of Geraldton in Western Australia; - a 62.5% interest in Australian Magnesium Corporation Limited ("AMC (Advanced Mezzanine Card) See AdvancedTCA. ") which owns significant magnesium resources and has developed and owns a proprietary process to produce high quality magnesium metal and magnesium-based alloys for supply to the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. ; and - a 53.9% interest in the Kasese cobalt project located in western Uganda. Proposed offer terms and conditions AngloGold, via a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , proposes to acquire the entire issued share capital of Normandy for AngloGold shares at an exchange ratio of 2.15 AngloGold shares per 100 Normandy shares. The AngloGold shares issued to Normandy shareholders in terms of the offer will rank pari passu [Latin, By an equal progress; equably; ratably; without preference.] Used especially to describe creditors who, in marshalling assets, are entitled to receive out of the same fund without any precedence over each other. PARI PASSU. By the same gradation. in all respects to the AngloGold shares currently in issue including the right to all future dividends. The offer will be subject to the following conditions: - the acceptance of the offer by holders of a minimum of 50.1% of Normandy shares; - the approval of the transaction by ordinary resolution of AngloGold shareholders in general meeting. AngloGold's 53.3% shareholder, Anglo American plc Anglo American plc (LSE: AAL, JSE: ANGLO) is a world-wide group of companies, originally founded in South Africa as a mining enterprise but now extending into other areas. Natural resources remains the focus of its operations. , has committed to vote in favour of that resolution; - the approval of the transaction by the South African Reserve Bank; - the approval of the transaction by the Australian Foreign Investment Review Board ("FIRB FIRB Foreign Investment Review Board (Australia) FIRB Far Infrared Background FIRB Flight Information Region Boundary "); - obtaining any other regulatory approvals necessary to ensure that AngloGold can acquire all of the shares in Normandy pursuant to the offer and that AngloGold shares can be issued under the offer and traded without restriction; - there being no pre-emptive rights applicable to the Pajingo Joint Venture or KCGM KCGM Kalgoorlie Consolidated Gold Mines Pty Ltd (known as the Super Pit) which would be triggered on a change of control of Normandy; - there being no pre-emptive rights applicable to Normandy's 49.9% shareholding in the corporate entity or entities which constitute the TVX Normandy Americas Alliance which would be triggered on a change of control of Normandy; - there being no standard prescribed occurrences as envisaged by the Australian Corporations Act; - an unqualified audit report being issued in respect of Normandy's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the year ended 30 June, 2001; - Normandy or any Normandy subsidiary not entering into any agreement with AMC or obligation in respect of AMC for an amount greater than A$20 million other than those agreements and obligations disclosed in the AMC institutional offering memorandum dated 19 June, 2001 or disclosed by Normandy; and - there being no contingent liabilities with an individual value of A$15 million and an aggregate value of A$50 million disclosed in Normandy's financial statements for the year ended 30 June 2001 which have not been previously disclosed by Normandy. In order to extend the offer into the United States ("US") to holders of Normandy shares who are resident in the US and in compliance with US federal securities laws, AngloGold intends to arrange for an approved nominee to receive the AngloGold shares to be received by such holders of Normandy shares. The approved nominee will sell such shares, on such holders behalf, on any approved stock exchange where AngloGold shares are listed, and pay the proceeds received from such sale to such holders. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma historical effect on AngloGold's Net Asset Value, EBITDA, Basic Earnings and Headline Earnings Headline Earnings A basis for measuring earnings per share implemented by the Institute of Investment Management and Research. This method accounts for all the profits and losses from operational, trading, and interest activities, that have been discontinued or acquired at any Per Share For the purpose of compliance with JSE JSE See: Johannesburg Stock Exchange Securities Exchange ("JSE") Listings Requirements, the pro forma effect of the transaction on the historical EBITDA, basic earnings and headline earnings per share for AngloGold for the year ended 30 June 2001, and on the net asset value per share at 30 June 2001, are as follows:
----------------------------------------------------------------------
(amounts in Rands per share) Before After(4) % Change
----------------------------------------------------------------------
Net asset value per share (1) 107.93 167.72 55.4
----------------------------------------------------------------------
EBITDA per share (1) and (3) 43.95 46.54 5.9
----------------------------------------------------------------------
Basic earnings per share (1)
and (2) (after abnormal items) 10.35 1.31 (87.3)
----------------------------------------------------------------------
Headline earnings per
share (1) and (4) 17.11 15.35 (10.2)
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(1) At 30 June 2001 for AngloGold and Normandy. Net asset value
per share is determined assuming 107 167 837 shares in
AngloGold and 2 231 293 559 shares in Normandy. The net asset
value for Normandy was translated into US Dollars assuming an
exchange rate of 0.51 US Dollars per Australian Dollar and
into Rands assuming an exchange rate of 8.05 Rands per US
Dollar at 30 June 2001. EBITDA, basic earnings and headline
earnings per share, is determined assuming an average of 107
039 904 shares in AngloGold and an average of 1 806 145 187
shares in Normandy for the year ended 30 June 2001. EBITDA,
basic earnings and headline earnings for Normandy have been
translated into US Dollars assuming an average exchange rate
of 0.54 US Dollars per Australian Dollar and into Rands
assuming an average exchange rate of 7.62 Rands per US Dollar
for the year ended 30 June 2001.
(2) Pro forma for the twelve months ended 30 June 2001 for
AngloGold and as reported for the year ended 30 June 2001 for
Normandy. In the financial year ending 30 June 2001 Normandy
made abnormal writedowns totalling A$274.7million. This
included write downs in the carrying value of Normandy's
interests in its Yandal assets, Kasese, its non Australian
exploration assets and TVX Gold Inc., to reflect fair value.
(3) Pro forma assuming that 100% of Normandy shareholders accept
the offer and in the case of basic earnings including
depreciation of mining assets and amortisation of the
goodwill incurred in the transaction.
(4) Pro forma assuming that 100% of Normandy shareholders accept
the offer and in the case of headline earnings including
depreciation of mining assets.
For the year ended 30 June 2001 Normandy recorded an attributable profit of A$120.1 million, before net abnormal write downs amounting to A$274.7 million (R7.71 per AngloGold share) and an attributable loss of A$154.6 million after net abnormal write downs. As at this date Normandy's total net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. were A$1,398 million. The attributable profit for the year ended 30 June 2001 is stated after higher borrowing costs (A$112 million as compared to A$66.7 million for the year ended 30 June 2000). Normandy reduced its net debt by A$353.3 million during the year ended 30 June 2001 and therefore future borrowing costs are expected to be reduced. In addition, Normandy's depreciation and amortisation for the year ended 30 June 2001 was A$263.3 million as compared to A$121.9 million for the year ended 30 June 2000. Documentation, next steps and cautionary announcement A circular to AngloGold shareholders requesting approval for the transaction and the offer document to Normandy's shareholders are currently being prepared. Subject to the approval of the relevant regulatory authorities these documents will be posted to the respective shareholders in due course. Shareholders are accordingly advised to exercise caution in dealing in AngloGold shares. Johannesburg 5 September 2001 Financial advisers to the transaction Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank AG Legal advisers in Australia Freehills Legal advisers in South Africa Tabacks Legal advisers in the US Shearman and Sterling Accountants Ernst and Young Joint JSE Sponsors UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Warburg JP Morgan Share code: ANG ANG In currencies, this is the abbreviation for the NL Antillian Guilder. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ISIN Isin (ĭs`ĭn), capital of an ancient Semitic kingdom of N Babylonia. The city became important after the third dynasty of Ur fell to the Elamites and the Amorites (c.2025 B.C.). The phase from c.2025–c.1763 B.C. code: ZAE ZAE zones d’activités économiques 000014601 Except for historical information which may be contained herein, there may be matters discussed in this announcement that are forward-looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors including, but not limited to, development of AngloGold's business, the economic outlook in the gold industry, expectations regarding gold prices and production, and other factors, which could cause actual results to differ materially from such forward-looking statements, refer to AngloGold's annual report on Form 20-F for the year ended 31 December 2000 which was filed with the United States Securities and Exchange Commission on April 23, 2001. |
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