BLUE FINANCIAL SERVICES LIMITED - Late submission of results, voluntary suspension of trading in securities and renewal of cautionary announcement

Late submission of results, voluntary suspension of trading in securities and renewal of cautionary announcement

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”)

LATE SUBMISSION OF FINANCIAL RESULTS AND CONSEQUENT REQUEST
FOR THE VOLUNTARY SUSPENSION OF TRADING IN BLUE SECURITIES AND
RENEWAL OF CAUTIONARY ANNOUNCEMENT

1. BACKGROUND

  The Group in December 2010, under the guidance and support
  of its controlling (54%) shareholder Mayibuye Group (Pty)
  Limited (“Mayibuye”), initiated an extensive three year
  turnaround strategy, which has already delivered much needed
  improvements to the overall operations of the Company
  together with additional capitalization to the tune of R840
  million.

  The key objective of this turnaround strategy was to
  reposition the Group with a balance sheet that supported
  further fund raising which is paramount in driving the
  future growth and sustainability of the Group, whilst
  proactively dealing with various legacy issues.

2. PROPOSED   CORPORATE   ACTION   AND   RENEWAL   OF   CAUTIONARY
   ANNOUNCEMENT

  Shareholders are referred to the cautionary announcement
  published on the Securities Exchange News Service (“SENS”)
  of the JSE Limited (“JSE”) on 21 January 2013 whereby
  shareholders were advised that the Company is in
  negotiations with Mayibuye regarding the further
  recapitalisation of Blue, and the subsequent renewal of
  cautionary announcements published 4 March 2013, 16 April
  2013 and 29 May 2013.

  Negotiations are continuing and progressing, but are not yet
  finalised.

  Shareholders should therefore exercise caution when dealing
  in the Company's securities until a further announcement is
  made.

3. LATE SUBMISSION OF FINANCIAL RESULTS AND CONSEQUENT REQUEST
   FOR VOLUNTARY SUPENSION
   Shareholders are referred to the trading update published on
   SENS on 17 May 2013, whereby the Company advised that it
   anticipates earnings per share and headline earning per
   share for the financial year ended 28 February 2013 to be at
   least 20% lower than the comparative period.

   In relation to the trading update referred to above,
   shareholders are hereby advised that the Company will not be
   in a position to publish its consolidated results of the
   Group for the financial year ended 28 February 2013
   (“February 2013 results”), within the period prescribed by
   the JSE listing requirements which is 28 June 2013.

   Accordingly, and after giving due consideration to the
   factors listed below, the board of directors of Blue
   (“Board”) deems it prudent to request the JSE to temporarily
   suspend, with immediate effect, the trading in Blue
   Securities on the stock exchange operated by the JSE until a
   further announcement is made.

   In arriving at the decision above, the Board has considered
   the following key factors:

   -   That the Debt Restructuring Agreement ("DRA") terminates
       in January 2014 and will impact inter alia the extent to
       which certain funders of the Group may be required to
       convert debt into equity. As such any financial impact
       thereon needs to be considered in the February 2013
       results.
   -   The negotiations pursuant to the proposed corporate
       action referred to in paragraph 2 above remain key in
       achieving the Group’s objective of securing a stronger
       balance sheet in order to raise future funding,
       considering the importance of this to the sustainability
       of the Group. These negotiations have yet to be
       finalised.
   -   The outcome of the forensic investigation commissioned
       by the Board in 2010 is nearing finalisation. In
       addition the Board recently commissioned a new forensic
       investigation, which is ongoing. The Board wishes to
       gain further certainty of the impact, if any, of these
       investigations on the February 2013 results.
   -   The resignation of the incumbent financial director, Mr
       Deon Bekker, as announced on SENS on 30 April 2013.


4. WAY FORWARD

  The Board wishes to advise that it is committed to
  publishing the February 2013 results as soon as practically
  possible, at which point the company will apply to the JSE
  to recommence with the trading of Blue securities on the
  stock exchange operated by the JSE.

Johannesburg
26 June 2013


Designated Advisor
Grindrod Bank Limited

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