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Proposed Specific Repurchase of Infrasors Shares
Infrasors Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2007/002405/06)
Share code: IRA ISIN: ZAE 000101507
(“Infrasors” or “the Company”)
Proposed Specific Repurchase of Infrasors Shares
1. INTRODUCTION
On 27 July 2007, Infrasors Holdings Limited (“Infrasors” or “the Company”) entered into a loan
agreement (“First Agreement”) with the Infrasors Empowerment Trust (“Borrower”) in order to
facilitate a Broad-Based Black Economic Empowerment (“B-BBEE”) transaction. The total
capital advanced to the Borrower amounted to R52 800 000 and the Borrower acquired
9 600 000 Infrasors ordinary shares, at a purchase price of R5,50 per share.
The First Agreement contained a Deed of Pledge that stipulates that as security for the
obligation to discharge the capital amount of R52 800 000 and all interest raised thereon, the
Borrower pledged in favour of Infrasors the 9 600 000 Infrasors ordinary shares (“First
Pledge”)(“First Pledge Shares”).
On 27 July 2007, Hanchurch Asset Management Inc (“Hanchurch”) entered into a loan
agreement (“Second Agreement”) with the Borrower in order to facilitate a B-BBEE
transaction. The total capital advanced was R79 200 000 and the Borrower acquired
14 400 000 Infrasors ordinary shares, also at a purchase price of R5,50 per share.
The Deed of Pledge contained in the Second Agreement stipulates that as security for the
obligation to discharge the capital amount R79 200 000 and all interest raised thereon, the
Borrower pledged in favour of Hanchurch the 14 400 000 Infrasors (“Second Pledge”)
(“Second Pledge Shares”).
On 2 May 2008 Hanchurch subordinated its loan (“Subordination Agreement”) in favour of
Infrasors following a significant deterioration in the market value of the Infrasors ordinary
shares held by the Borrower.
On 7 October 2013 Infrasors agreed to cancel the First Pledge and the loan to the Borrower
on condition that the First Pledge Shares, a further 325 348 Infrasors ordinary shares (paid in
cash by the Borrower) and the Second Pledge Shares be returned by the Borrower to
Infrasors. In addition, on 7 October 2013 Hanchurch agreed to cancel the Second Pledge and
the loan to the Borrower and agreed that Infrasors may re-possess and cancel the Second
Pledge Shares held by the Borrower.
RATIONALE FOR THE SPECIFIC REPURCHASE
Given the extent of exposure relative to the value of the underlying securities, and the inability
to obtain restitution through any other means, Infrasors has decided as a last resort to
exercise its rights according to the First Agreement and the Subordination Agreement and to
re-possess the 9 600 000, 325 348 and the 14 400 000 Infrasors ordinary shares (“Specific
Repurchase”).
2. TERMS OF THE SPECIFIC REPURCHASE
Infrasors has agreed to acquire a total of 24 325 348 Infrasors ordinary shares from the
Borrower in accordance with the pre-existing loan agreements and information contained in
the introduction above.
The Share Repurchase is subject to the fulfilment of the following conditions precedent:
The obtaining of the approval of the JSE of the documentation to be issued to Infrasors
shareholders to approve the Specific Repurchase;
The passing by Infrasors shareholders of the resolutions required to authorise, approve
and implement the Specific Repurchase in terms of the Companies Act, Infrasors
Memorandum of Incorporation and the Listing Requirements of the JSE Limited (“Listing
Requirements”);
The obtaining of the approval of and authority to implement the Specific Repurchase by
the Board of Directors (“Directors”) of Infrasors;
Infrasors satisfying the solvency and liquidity test contemplated in section 4 of the
Companies Act in respect of the Specific Repurchase; and
Obtaining of such regulatory approvals as may be necessary in respect of the Specific
Repurchase.
The repurchase of the Infrasors ordinary shares in terms of the Specific Repurchase will take
place on the third business day after the fulfilment of the last of the conditions precedent
referred to above (“Repurchase Date”). The Infrasors ordinary shares will be cancelled and
their listing terminated on or, as soon as is practicably possible after the Repurchase Date.
Subsequent to the Specific Repurchase, Infrasors will hold 27 020 754 ordinary shares in
treasury.
In terms of the Listing Requirements the Specific Repurchase is a related party transaction as
the Borrower is a material shareholder and is therefore deemed to be a related party. In terms
of the Listing Requirements, in order to implement the specific repurchase a special resolution
of the Company must be passed by security holders excluding the Borrower. As the ordinary
shares are being repurchased at a value of R0.48, which is a discount to the 30 day Volume
Weighted Average price (“VWAP”), a fairness opinion is not required.
In terms of the Listing Requirements, the votes of the Borrower will be taken into account in
determining whether a quorum of shareholders is present at the General Meeting, but such
votes will not be taken into account in determining the results of the voting at the General
Meeting.
3. FINANCIAL EFFECTS
The unaudited pro-forma financial effects set out in the tables below have been prepared to
assist Infrasors shareholders to assess the impact of the Transaction on the earnings per
share (“EPS”) and diluted EPS, headline EPS ("HEPS") and diluted headline EPS.
HEPS and the net asset value ("NAV") and the tangible NAV ("TNAV") per Infrasors ordinary
share as at 31 August 2013 for the interim period then ended. It has been assumed for the
purposes of the pro-forma financial effects that the Transaction took place with effect from 1
March 2013 for Statement of Comprehensive Income purposes and at 1 March 2013 for
Statement of Financial Position purposes. The pro-forma financial effects have been prepared
for illustrative purposes only and, because of their nature, they may not fairly present
Infrasors’s restated financial position at 31 August 2013 and the restated results of its
operations for the six months then ended. The Directors are responsible for the preparation of
the financial effects which have not been reviewed by the auditors. The "After" column
represents the effects after the Transaction.
The "% Change" column compares the "After" column to the "Before" column.
The weighted average number of ordinary shares in issue and the diluted weighted average
number of ordinary shares in issue have been stated net of treasury shares
“Before” “After” %
Change
Cents Cents
EPS for the six month ended 31 August 2013 0.1 0.1 -
HEPS for the six month ended 31 August 2013 2.4 2.8 16.7%
Diluted EPS for the six month ended 31 August 2013 0.1 0.1 -
Diluted HEPS for the six month ended 31 August 2013 2.4 2.8 16.7%
NAV as at 31 August 2013 69.5 80.1 15.3%
TNAV as at 31 August 2013 68.1 78.4 15.1%
Number of ordinary shares in issue at 31 August 2013 183 709 159 384 13.2%
(million)
Weighted average number of ordinary shares in issue for the 183 709 159 384 13.2%
six months ended 31 August 2013 (million)
Diluted weighted average number of ordinary shares in issue 183 709 159 384 13.2%
for the six months ended 31 August 2013 (million)
4. CIRCULAR TO SHAREHOLDERS
A circular, including a notice of General Meeting, detailing the terms of the Specific
Repurchase and actions required by shareholders will be posted to shareholders in due
course. Further announcements will be made as to any additional relevant dates including the
date of the General Meeting.
Johannesburg
18 March 2014
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 18/03/2014 11:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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