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Notice of the publication of the business rescue plan, the meeting in terms of Sec 150 and 151 of the Comp Act 2008
MASONITE (AFRICA) (PROPRIETARY) LIMITED
Incorporated in the Republic of South Africa
(Reg. No. 1942/015502/06)
Share code: MAS ISIN: ZAE000004289
(in business rescue)
(Hereinafter referred to as “the Company”)
TO CREDITORS, EMPLOYEES AND SHAREHOLDERS
NOTICE OF THE PUBLICATION OF THE BUSINESS RESCUE PLAN AND OF THE MEETING
IN TERMS OF SECTION 150 AND 151 OF THE COMPANIES ACT 2008
1. All affected persons are hereby notified that a meeting of Creditors and Shareholders will be
held on 16 May 2016 at 10h00 at Deloitte, DTT House, 2 Pencarrow Park, La Lucia Ridge
Office Estate, Pencarrow, La Lucia, Durban for the purpose of considering and voting on the
proposed Business Rescue Plan published on 6 May 2016.
A Skype or teleconference link will be provided for the meeting. Details on the facility and dial-
in details can be obtained from the Company Secretary, Morgan Govender on
MGovender@masonite.co.za after 11 May 2016.
2. The complete Business Rescue Plan (the “Plan”) comprises approximately 320 pages.
Consequently it cannot be transmitted per e-mail. The complete Business Rescue Plan can be
found on the Masonite website: www.masonite.co.za, under the business rescue tab,
alternatively click on the following link: http://www.masonite.co.za/THE MASONITE
BUSINESS RESCUE PLAN.pdf to download. In addition, copies of the Plan are available at
the following venues for inspection:
2.1 The Business Rescue Practitioner’s offices : Berrangé Inc, Suite 9, 2nd Floor,
Block C, Townbush Office Park,
Townbush Road, Pietermaritzburg;
2.2 Masonite’s head office at : Suite 200, Block 2, Island Office Park
35 – 37 Island Circle
Riverhorse Valley
2.3 Masonite’s factory premises at: Broomcliffe Road, Estcourt
3. Please note that the agenda and purpose of the meeting is to: -
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3.1 present the Business Rescue Plan;
3.2 inform the meeting whether or not the Business Rescue Practitioner continues to
believe that there is a reasonable prospect of rescuing Masonite;
3.3 provide employees and/or their representatives with an opportunity to address the
meetings;
3.4 invite discussions, and entertain and conduct a vote, on any motions to (i) amend the
Business Rescue Plan, in any manner moved and seconded by holders of creditors’
voting interest (and satisfactory to the Business Rescue Practitioner); or (ii) adjourn the
meeting, in order to revise the Business Rescue Plan for further consideration;
3.5 thereafter the BRP will call for a vote by Creditors for preliminary approval of the Plan,
as amended if applicable, unless the Meeting has been adjourned;
3.6 the Plan will be approved on a preliminary basis if it is supported by the holders of more
than 75% of the Creditors’ voting interest that are voted and the votes in support of the
Plan includes at least 50% of the independent Creditors’ voting interests, if any, that
are voted;
3.7 if the Plan is approved by Creditors as set forth above, the Creditors will thereafter be
requested to consider and vote in respect of the success fee agreement proposed by
the BRP. The success fee agreement will become final and binding on the Company
if it is approved by the holders of a majority of the Creditors’ voting interests present
and voting at the Meeting, provided the success fee agreement is also approved by a
majority of the Shareholders’ voting rights;
3.8 after the abovementioned voting by Creditors, the Meeting will be closed insofar as
Creditors are concerned and immediately thereafter, a Meeting of Shareholders will be
held and they will be called upon to approve the adoption of the Plan, if the Plan was
approved by the Creditors;
3.9 if the majority of the voting rights of the Shareholders that were exercised support
adoption of the Plan, the Plan will be finally adopted, subject to satisfaction of any
conditions on which the Plan is contingent;
3.10 if the majority of the voting rights of the Shareholders that were exercised oppose
adoption of the Plan, the Plan is rejected and may be considered further only in terms
of section 153 of the Act;
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3.11 if the Plan is approved by the Creditors and the Shareholders as set forth above, the
Shareholders will thereafter be called upon to consider and vote in respect of the
success fee agreement proposed by the BRP. The success fee agreement will become
final and binding on the Company if it is approved by the holders of a majority of the
voting rights attached to the shares, present and voting at the Meeting;
3.12 after the Shareholders have voted as set forth above, the Meeting of Shareholders will
be closed;
3.13 if the Plan is adopted, it is binding on the Company and on each of the Creditors and
every Shareholder, whether or not such a person was present at the Meeting, voted in
favour of the adoption of the Plan or, in the case of Creditors had proven their claim
against the Company.
4. In accordance with Section 145(4) of the Act, a creditor [including any employee who is a
creditor in terms of Section 144(3)(f)] is entitled to vote as follows :-
4.1 a secured or unsecured creditor has a voting interest equal to the value of the amount
owed to that creditor by Masonite;
4.2 a concurrent creditor who would be subordinated in a liquidation has a voting interest,
as independently and expertly appraised and valued at the Business Rescue
Practitioner’s request, equal to the amount, if any, that the creditor could reasonably
expect to receive in a liquidation of Masonite.
5. The Business Rescue Plan contemplates the following inter-dependent transactions
(collectively referred to as “the rescue transactions”) : -
5.1 The sale of the Company’s forestry business to World Hardwood (Pty) Limited
(“Forestco”) for the sum of R385 million in terms of a Forestry Sale of Business
Agreement;
5.2 The conclusion of a Subscription Agreement between the Company and Grey West
Fencing (Pty) Ltd (“Millco”) in terms whereof Millco will subscribe for 1 000 ordinary
shares in the Company at a subscription consideration of R1 000-00;
5.3 The sale of the plant and equipment of the Mill to Warhorse Private Equity (Pty) Ltd
(“Assetco”) for the sum of R100-00 in terms of a Sale of Plant and Equipment
Agreement;
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5.4 The repurchase by the Company of its entire issued share capital other than the shares
subscribed for by Millco, with the result that Millco shall be the sole shareholder of the
Company. This transaction is described as “the Share Repurchase Transaction”.
The BRP is of the opinion that the bidder who was selected as the preferred bidder and with
whom the rescue transactions were concluded, presented the bid most beneficial to the
Company’s Creditors, employees and Shareholders as:
(i) It provides for the purchase of the Company’s assets at an attractive price (value);
(ii) It has funding certainty and limited conditionality;
(iii) It is structured in such a manner that the Mill will continue to operate;
(iv) All the Company’s employees will remain employed;
(v) The preferred bidder has the necessary experience and expertise to carry on the
Company’s forestry business and to operate the Mill.
6. The effect of the Business Rescue Plan on the following Affected Persons, are as follows :
6.1 Creditors
All Creditors’ claims will be paid in full.
6.2 Employees
6.2.1 Those employees of the Company who were employed in the Company’s
forestry division, shall be transferred to Forestco as contemplated in section
197 of the Labour Relations Act;
6.2.2 Those employees who were employed in the Mill, will continue their
employment with the Company;
6.3 Shareholders
The rescue transactions provides a compulsory repurchase by the Company of all its
issued share capital, other than the Millco subscription shares. The salient terms of the
Share Repurchase Transaction are:
6.3.1 The Company’s present Shareholders shall be obliged to sell their shares to
the Company in return for payment of a repurchase price calculated in
accordance with a specified formula.
6.3.2 The BRP, acting either in his capacity as BRP or as Receiver as contemplated,
shall pay the share repurchase price from the funds held in a Share
Repurchase Price Settlement Account opened by the BRP for the purpose of
receiving and holding all the amounts allocated to payment of the share
repurchase price and for payment of the amount required to ensure compliance
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with the Company’s obligations in respect of the post-employment healthcare
benefits;
6.3.3 The share repurchase price shall be paid to the present Shareholders pro-rata
to their shareholdings as follows:
6.3.3.1 An initial payment to be made as soon as reasonably possible, but no
later than thirty days, after the first registration date of not less than
85% of the Company’s immovable properties into the name of World
Hardwood (Pty) Limited;
6.3.3.2 Further payments as monies are received into the Share Repurchase
Price Settlement Account until each Shareholder has received full
payment of the share repurchase price;
6.3.4 The total anticipated price per share payable to Shareholders shall be circa
R33.00 per share;
6.3.5 Shareholders are referred to annexure “BRP13” of the Plan, which document
sets out the action(s) to be taken by all Shareholders to secure payment of the
share repurchase price;
6.3.6 Shareholders are reminded that trading in the Company’s shares on the JSE
has been suspended and remain suspended;
6.3.7 Following the share repurchase, Shareholders, with the exception of Millco
once it is a Shareholder, shall not be entitled to exercise any rights pertaining
to their shares and the Shareholders’ only remaining right will be to receive any
unpaid portion of the share repurchase consideration.
7. Neither this letter nor the Plan should be considered to be legal advice. Affected persons should
seek independent legal advice in respect of their claim and their rights.
8. The following documents can be obtained from the Company Secretary, Morgan Govender
(MGovender@masonite.co.za):
8.1 Proxy Form for Creditors;
8.2 Proxy Form for Shareholders;
(Proxies are to be returned by no later than 12h00 on 12 May 2016 to
MGovender@masonite.co.za)
8.3 Ballot Form for purposes of voting at the meetings for Creditors;
8.4 Ballot Form for purposes of voting at the meetings for Shareholders.
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Pierre de Villiers Berrangé
Senior Business Rescue Practitioner
Date : 05 May 2016
Sponsor
Nedbank Corporate and Investment Banking
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