CHEMICAL SPECIALITIES LIMITED - Revised terms of the compulsory convertible preference share rights offer and proposed circular to shareholders

Revised terms of the compulsory convertible preference share rights offer and proposed circular to shareholders

Chemical Specialities Limited
Incorporated in the Republic of South Africa
Registration number 2005/039947/06
Share code: CSP
ISIN: ZAE000109427
("Chemspec" or "the Company")

REVISED TERMS OF THE COMPULSORY CONVERTIBLE PREFERENCE SHARE (“CCP”)
RIGHTS OFFER AND PROPOSED CIRCULAR TO SHAREHOLDERS

1. INTRODUCTION

   Shareholders are referred to the announcement of 27 June 2013,
   published on the Stock Exchange News service of the JSE Limited
   (“SENS”), whereby shareholders were advised of a proposed rights offer
   to raise approximately R193 million in the form of a renounceable
   compulsory convertible preference shares (“the proposed rights offer”).


   Shareholders are advised that the terms of the proposed rights offer
   have been revised to adjust to the prevailing market price of Chemspec
   ordinary shares, as more fully set out in paragraph 2 below.

2. REVISED PARTICULARS OF THE PROPOSED RIGHTS OFFER

      Gross amount        R214,772,330
      raised
      Ratio               50 CCP’s for every 100 ordinary shares
                          held
      Dividend rate       8% cumulative preference dividend per
                          annum, calculated on the issue price
                          (before the dividend tax) payable six-
                          monthly
      Issue price         40 cents* per CCP
      Conversion terms    1 ordinary share for every 1 CCP after
                          3 years from issue
      Listing             Application will be made for a listing
                          of the CCP’s on the JSE

   * The issue price is at a premium of 11% to the closing price of 36
     cents per Chemspec ordinary share on Thursday 1 August 2013, the day
     before this announcement.

3. PROPOSED CIRCULAR TO SHAREHOLDERS

   In order to effect the proposed rights offer in terms of the Companies
   Act, no 71 of 2008 (“the Act”) and the JSE Listings Requirements,
   shareholders will be asked in general meeting to approve the following
   corporate actions:

   - amendments to the Company’s Memorandum of Incorporation to create
     750,000,000 compulsory convertible preference shares and to increase
     the number of authorised ordinary shares in the share capital of the
     Company by an additional 750,000,000 ordinary shares;

   - authorising the Board, specifically, to issue CCPs to ordinary
     shareholders in accordance with the proposed rights offer;
   - authorising the Board, generally, to issue the balance of the CCPs
     for cash; and

   - a waiver of any potential mandatory offer which may be triggered as
     a result of the proposed rights offer.

   Chemspec is in the process drafting a circular to shareholders to be
   posted to shareholders on and about 8 August 2013 incorporating a
   notice of general meeting and further details will be announced as soon
   as possible.


4. IRREVOCABLE UNDERTAKINGS

   Chemspec shareholders representing 65,28% of the shares in issue have
   irrevocably undertaken to vote in favour of the shareholders
   resolutions (required in terms of the Act and the JSE Listings
   Requirements) necessary to give effect to the proposed rights offer.

5. CONDITIONS PRECEDENT

   The proposed rights offer is conditional upon, inter alia:

   - the approval by the JSE of the required documentation so as to
     implement the proposed rights offer;

   - the passing of any necessary shareholder resolutions required to
     implement the proposed rights offer;

   - the registration by the Registrar of Companies of all documents and
     resolutions (if any) required in respect of the proposed rights
     offer; and

   - obtaining all regulatory approvals required (if any) in terms of the
     Act.

6. CAUTIONARY ANNOUNCEMENT AND FURTHER DETAILED ANNOUNCEMENT

   Shareholders are advised that the proposed rights offer may have a
   material effect on the price of the Company’s securities. Accordingly,
   shareholders are advised to exercise caution when dealing in the
   Company’s securities until a full announcement is made setting out the
   salient dates and times as well as the pro forma financial effects of
   the proposed rights offer. A further detailed announcement will be made
   in due course.

Durban
2 August 2013
Designated Advisor
Grindrod Bank Limited

Date: 02/08/2013 04:17:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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