Wrap Text
Notice of EGM to approve the proposed redomiciliation of the Company and proposed new Long Term Incentive Plan
BRAIT SE
(Registered in Malta as a European Company)
(Registration No.SE1)
Share code: BAT ISIN: LU0011857645
Bond code: WKN: A2SBSU ISIN: XS2088760157
LEI code: 549300VB8GBX4UO7WG59
("Brait" or the "Company")
NOTICE OF EGM TO APPROVE THE PROPOSED REDOMICILIATION OF THE
COMPANY AND PROPOSED NEW LONG TERM INCENTIVE PLAN
Proposed redomiciliation of the Company
Further to the announcements published on the website of the
Luxembourg Stock Exchange ("LuxSE") and released on the Stock
Exchange News Services (“SENS”) of the Johannesburg Stock Exchange
("JSE") on 13 May 2020 and 24 June 2020, the Company has today
released the Notice of the Extraordinary General Meeting to be
held on 30 October 2020 ("EGM") for Brait shareholders
("Shareholders") to approve the proposed transfer of the Company’s
registered office from Malta to Mauritius, where the Company’s
main investment subsidiary, Brait Mauritius Limited, is domiciled
(the "Redomiciliation").
Copies of the Notice of EGM and form of proxy are available to
view, download and print on the Company’s website at
http://brait.investoreports.com/investor-relations/results-and-reports/ and are also available
for collection, free of charge, during normal business hours from
the registered office of the Company.
The EGM will be held at the Company’s registered office at 4th
Floor, Avantech Building, St Julian’s Road, San Gwann, SGN 2805,
Malta on 30 October 2020, at 08:30 CET.
The resolutions relating to the Redomiciliation to be proposed to
Shareholders at the EGM entail:
1. Approving the conversion of the Company from a European
public limited liability company registered in Malta (Brait
SE) to a public limited company registered in Malta (Brait
p.l.c.) as well as the Draft Terms of Conversion and the new
Memorandum and Articles of Association of the Company,
amended to cater for this conversion ("New Memorandum and
Articles of Association");
2. Approving the Redomiciliation, whereby the Company transfers
its registered office from Malta to Mauritius whilst
retaining its legal identity;
3. Approving the New Constitution of the Company, which will be
adopted by the Company once registered as a public limited
company under the laws of Mauritius, and which will replace
the New Memorandum and Articles of Association that apply
under the laws of Malta (the "New Constitution"); and
4. Granting the Board of the Company the necessary authority to
effect the above.
The key amendments incorporated in the New Memorandum and Articles
of Association, the New Constitution and the full New Constitution
of the Company are set out in the Annexes to the Notice of EGM.
The Redomiciliation process will not impact the Company’s primary
listing on the Euro MTF Market of the LuxSE or its secondary
listing on the JSE. No amendments will be required to the terms
and conditions of the GBP150 million 6.5% Convertible Bonds due 4
December 2024 ("2024 Bonds"). In addition, the share capital of
the Company will not be affected.
Proposed New Long Term Incentive Plan
As part of the Brait recapitalisation transaction concluded in
February 2020 and the appointment of Ethos Private Equity
("Ethos") as the advisor to Brait ("Advisor"), it was communicated
to Shareholders that the new Brait Board ("Board") would consider
the structure for a new Long Term Incentive Plan for Ethos
("LTIP"). The Board has agreed the key terms for the LTIP and,
although not required under applicable law or stock exchange
requirements, the Board intends to seek voluntary Shareholder
approval for the LTIP by way of ordinary resolution at the EGM.
The LTIP is a five-year structure which has been designed to align
the interests of the Advisor with those of Shareholders in
delivering on Brait’s revised strategy of realising value from the
portfolio over the medium term, whilst minimising dilution to
Shareholders.
Key parameters of the LTIP:
- The LTIP will result in the Advisor receiving participation
rights ("Participation Rights") to the realised proceeds
distributed from the Brait portfolio only once cumulative
distributions to Shareholders have exceeded the 31 March 2020
Net Asset Value ("NAV") of R8.27 per share (the "Hurdle
Price"). The value accruing to the Advisor would be equal to
the surplus between such distributions and the Hurdle Price
and would be settled in cash;
- The Participation Right, which carries no voting rights, will
be based on a sliding scale from 5.0% to 0.5% depending on
the quantum of cumulative realised proceeds distributed to
Shareholders. The LTIP has a diminishing participation rate
as the disposal proceeds increase, in order to avoid any
"excess participation" by the Advisor in the event of
significant outperformance;
- The Hurdle Price represents a five year, 16% Compound Annual
Growth Rate ("CAGR") over the Brait share price of R3.89 as
at 6 October 2020, and will be adjusted to account for
corporate events such as the declaration of ordinary and
special dividends, share buybacks and asset unbundlings;
- The LTIP will remain in place for five years to align it with
the revised Brait strategy of realising value from the Brait
portfolio over a 3-5 year timeframe and can be extended at
the Board’s election;
- Ethos will allocate the LTIP to its employees on terms to be
agreed between such parties and it is expected that the terms
will include standard good leaver / bad leaver provisions in
the event of an employee leaving Ethos’ employment. Any
allocation foregone by employees leaving can be reallocated
by Ethos to its remaining employees working on the Brait
portfolio;
- In the event of a change in control of Brait or a termination
/ non-renewal of the Ethos Advisory Agreement, the rights
under the LTIP would remain in place and the Advisor would
receive its Participation Rights as they fall due; and
- The dilution for Shareholders has been minimised whilst
ensuring that the Company has an equitable LTIP in place to
ensure alignment of interests with the Advisor.
Once, on a cumulative basis, the realised distributions to
Shareholders exceeds the Hurdle Price, the Advisor will be
entitled to its Participation Right of any further distributions
to Shareholders. The Participation Right percentage is based on
the following cumulative distributions to Shareholders and the
resultant Shareholder dilution is set out below:
Realised distributions Participation Shareholder
per share dilution
> R8.27 < R12.0 5.0% 0.0% to 1.6%
> R12.0 < R15.0 4.5% 1.6% to 2.1%
> R15.0 < R18.0 4.0% 2.1% to 2.5%
> R18.0 < R21.0 3.5% 2.5% to 2.6%
> R21.0 < R24.0 3.0% 2.6% to 2.7%
> R24.0 < R27.0 2.5% 2.7% to 2.6%
> R27.0 < R30.0 2.0% 2.6%
> R30.0 < R33.0 1.5% 2.6%
> R33.0 < R36.0 1.0% 2.5%
> R36.0 0.5% < 2.4%
The proposed LTIP would result in the following value received by
the Advisor based on various outcomes:
Realised distributions Total Shareholder Shareholder
per share return dilution
R8.27 213% -
R9.36 241% 0.6%
R10.55 271% 1.1%
R11.87 305% 1.5%
R13.32 342% 1.8%
R14.90 383% 2.1%
R16.63 428% 2.3%
Assuming, for illustrative purposes, that realised proceeds of
R11.87 are distributed, Shareholder returns from the current Brait
share price of R3.89 would be 305% (25% per annum over 5 years)
and the resultant dilution to Shareholders due to the LTIP would
be 1.5%.
Expected timetable of principal events for the EGM
The table below sets out the timetable of principal events. For
further details, please refer to the Notice of EGM.
2020
Draft Terms of Conversion published on the Thursday, 30
Maltese Business Registry July
Record date to determine which Shareholders are Friday, 25
entitled to receive the Notice of EGM September
Last day of trade in order to be eligible to Tuesday, 20
participate and vote at the EGM October
Record date to determine which Shareholders are Friday, 23
entitled to participate and vote at the EGM October
Form of proxy for the EGM to be lodged at the Wednesday, 28
Transfer Agent October
Form of proxy for the EGM to be lodged at the Thursday, 29
Company Secretary October
EGM Friday, 30
October
9 October 2020
Malta
Brait´s primary listing is on the Euro MTF market of the LuxSE and
its secondary listing is on the JSE.
Merchant bank and sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 09-10-2020 12:30:00
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.
Sharenet Sites 
