BLUE FINANCIAL SERVICES LIMITED - Further update to shareholders and restructuring of the SA operations

Further update to shareholders and restructuring of the SA operations

BLUE FINANCIAL SERVICES LIMITED
Incorporated in the Republic of South Africa
Registration Number: 1996/006595/06
JSE Code: BFS
ISIN: ZAE000083655
("Blue" or "the Company" or “the Group”)

FURTHER UPDATE TO SHAREHOLDERS AND RESTRUCTURING OF THE SA
OPERATIONS

1. BACKGROUND

  Shareholders are referred to the announcements published on
  the Stock Exchange News Service (“SENS”) of the JSE Limited
  (“JSE”) on 25 June 2013 (“June 2013 SENS”) and 26 August
  2013 (“August 2013 SENS”), whereby shareholders were advised
  of   the   Company’s   continuing   negotiations    with  its
  controlling   shareholder,   Mayibuye   Group   (Proprietary)
  Limited (“Mayibuye”), regarding the proposed corporate
  action (referred to in paragraph 3 below) as well as the
  voluntary suspension of trading in Blue securities. In the
  August   2013  SENS   shareholders   were   updated   on  the
  significant developments at Blue and this announcement is
  intended to serve as a further updated communication to
  shareholders regarding these and other recent developments.

2. CONVERSION OF DEBT     IN     TERMS    OF   THE   DEBT   RESCHEDULING
   AGREEMENT (“DRA”)

  In the August 2013 SENS shareholders were advised that the
  DRA funders have notified the Company of their intention to
  bring forward the conversion date from January 2014. Blue
  can now announce that the Company and the DRA funders have
  agreed that the effective date for this conversion will be
  31 August 2013.

  Shareholders are reminded of the benefits of accelerating
  the conversion which include amongst others, an improved
  capitalisation of the Company’s balance sheet, significant
  reduction in forex exposure on foreign currency loans and a
  reduced interest and resultant cash flow burden on the
  Company.

3. CHANGE OF    THE   BUSINESS    MODEL    OF BLUE’s    SOUTH    AFRICAN
   OPERATIONS

  The Board of Blue wishes to announce an exciting new
  development that the South African operations of the Group
  currently trading under the name and style of Blue Financial
  Services South Africa Proprietary Limited (“Blue SA”), are
  being restructured such that Blue SA will now focus on asset
  rehabilitation as the core of its business model. The
  Company believes that this is the best route to take under
  the current economic climate in South Africa, and is also in
  line with the overall business strategy of the Group of
  tailoring   the  product   offering   for  each   individual
  territory. This will imply that Blue SA will no longer
  provide unsecured loans in South Africa.

  To ensure the success of this refocused business strategy in
  South African environment, the Company is planning a series
  of transactions with its controlling shareholder Mayibuye,
  that will result in Blue SA being equipped with the
  necessary staff, systems and processes to allow Blue SA to
  focus on this niche in the South African market.

  It is further envisaged the       Blue SA operations will be
  branded and marketed under       a new name following these
  transactions. An announcement     regarding the rebranding of
  the SA operations will be made   shortly.

  It should be emphasised that the Group will continue to
  offer unsecured lending products in its Africa based
  operations.

4. FEBRUARY 2013 FINANCIAL RESULTS

  Blue advises that the financial results for the 12 months
  ended 28 February 2013 as well as the financial results of
  the 6 months ended 31 August 2013 are expected to be
  published by the end of November 2013.

5. TRADING OF SECURITIES

  The Board will apply to the JSE to recommence trading of
  Blue securities on the stock exchange once the February 2013
  financial results have been published. Until such time the
  voluntary suspension of trading of Blue’s securities will
  remain in effect.

Johannesburg
31 October 2013

Designated Advisor
Grindrod Bank Limited

Date: 31/10/2013 09:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.