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SHF - Steinhoff - Proposed Broad-Based Black Economic Empowerment ("BEE")

Release Date: 21/05/2008 08:56
Code(s): SHF
Wrap Text

SHF - Steinhoff - Proposed Broad-Based Black Economic Empowerment ("BEE") Transaction ("The Bee Transaction"), General Repurchase Of Ordinary Shares And Launch Of ZAR 1,5 Billion Convertible Bonds **NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS), CANADA, JAPAN, ITALY OR AUSTRALIA** STEINHOFF INTERNATIONAL HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration no. 1998/003951/06) Ordinary share code: "SHF" & ISIN: ZAE000016176 ("Steinhoff" or "the Group" or "the Issuer") PROPOSED BROAD-BASED BLACK ECONOMIC EMPOWERMENT ("BEE") TRANSACTION ("THE BEE TRANSACTION"), GENERAL REPURCHASE OF ORDINARY SHARES AND LAUNCH OF ZAR 1,5 BILLION CONVERTIBLE BONDS PROPOSED BEE TRANSACTION Further to Steinhoff`s Interim Results announcement dated 5 March 2008, shareholders are advised that the proposed sale of a 20% equity interest in Steinhoff Africa Holdings (Proprietary) Limited to a consortium of BEE Investors will no longer proceed. The debt funding package related to this transaction was successfully raised by Steinhoff but, as a result of volatile conditions in global equity markets over the recent past, the BEE Investors have not been in a position to procure the required equity funding on appropriate terms. The debt funding package was conditional upon the required equity contribution being procured. The directors of Steinhoff have consequently resolved to implement an alternative Empowerment ownership structure at Steinhoff International Holdings Limited level. The proposed Investors will include Steinhoff staff members and suitable Community-based and Empowerment groupings in South Africa. This ownership structure in Steinhoff will result in significant Black ownership being allocated to the relevant South African operating subsidiaries in terms of the Broad-Based Black Economic Empowerment Codes of Good Practice. GENERAL REPURCHASE OF ORDINARY SHARES Steinhoff confirms the Group`s intention to effect share repurchases from time to time, from its existing resources in accordance with the general authority granted to the directors by Steinhoff shareholders at the Annual General Meeting held on 10 December 2007. Purely for the sake of facilitating the BEE transaction and subject to Steinhoff shareholders` approval insofar as may be required, it is intended to make available a portion of the shares so purchased ("the BEE shares") as the medium to implement the BEE transaction. Any shares repurchased in excess of the BEE shares will be held in treasury pending the conversion of the existing ZAR1,5 billion convertible bond maturing on 31 July 2013 issued in June 2006 ("the 2006 Bonds"). The proceeds of the 2006 Bonds were predominantly used to finance the construction of the new chipboard plant of PG Bison in the North Eastern Cape area which was officially opened on 18 April 2008. LAUNCH OF CONVERTIBLE BOND In addition, Steinhoff announces the launch of ZAR 1,5 billion unsubordinated unsecured convertible bonds, with an increase option of up to ZAR 225 million ("the 2008 Bonds"). The 2008 Bonds will be convertible into ordinary shares of the Issuer and are scheduled to mature on 20 July 2015. The 7 year Bonds, will be marketed at a coupon of 9.375% - 9.875% payable semi-annually on 20 January and 20 July in each year, and a yield of 11.288% - 11.756%. The first interest payment will be made on 20 July 2008. The conversion price is expected to be set at a premium of 30% - 35% to the volume weighted average price (from launch to pricing) of the ordinary shares of the Issuer on the JSE Limited. The 2008 Bonds will be issued at 100% and unless previously converted, redeemed or purchased and cancelled, will be redeemed at 120% of the principal amount on maturity. The Issuer has the right to redeem all outstanding 2008 Bonds at their accreted principal amount on or after 10 August 2011 if the parity value of the 2008 Bonds shall have exceeded 130 per cent. of the accreted principal amount of the Bonds on each of at least 20 out of any 30 consecutive trading days. The 2008 Bonds are expected to price today and closing is expected on or about 9 June 2008. The proceeds of the 2008 Bonds will be utilised by the Group for general corporate purposes, including appropriate earnings-enhancing re-financing and balance sheet optimisation initiatives. In terms of the Listing Requirements of the JSE Limited ("the JSE"), PWC Corporate Finance (Proprietary) Limited ("PWC") has been appointed to consider the conversion terms of the 2008 Bonds in relation to the fairness of the conversion terms to the ordinary shareholders of Steinhoff. PWC`s fairness opinion as contemplated in Rule 5.53(b) of the JSE`s Listings Requirements, which is a condition precedent to the issue of the 2008 Bonds, will be issued by not later than the date of closing. Upon release of the PWC opinion, it will be submitted to the JSE Limited Listings Division and become available for inspection at the registered office of the Issuer for a period of two weeks from date of closing. Application will be made for the 2008 Bonds to be listed on the Singapore Exchange Securities Trading Limited. Barclays Capital is the Sole Bookrunner and Sole Lead Manager for the offering of the 2008 Bonds. For more information, please contact: Barclays Capital: Simon Ollerenshaw * +44 (0) 207 773 5391 Steinhoff International Holdings Limited: Jan van der Merwe Piet Ferreira Ben la Grange * +27 (0) 11 445 3000 FURTHER ANNOUNCEMENT Further announcement in respect of the results of the Bookbuild relating to the 2008 Bonds, including the financial effects, where applicable in terms of the JSE Listing Requirements, will be released after the final pricing of the 2008 Bonds has been concluded. A further announcement in respect of the BEE transaction will be released in due course. Wynberg, Sandton 21 May 2008 Company sponsor: PSG Capital (Proprietary) Limited Independent adviser in respect of the 2008 Bonds: PWC Corporate Finance (Proprietary) Limited The information contained herein is not for publication or distribution to persons in the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold without registration thereunder or pursuant to an available exemption there from. Neither this document nor the information contained herein constitutes an offer to sell or the solicitation of an offer to buy any securities. In the United Kingdom this announcement is directed exclusively at persons who fall within Article 19 or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or to whom this announcement may otherwise be directed without contravention of section 21 of the Financial Services and Markets Act 2000. The investments referred to in this announcement shall be issued only to such persons. This announcement is not intended to be nor does it constitute an offer for sale or subscription to the public as contemplated under Chapter VI of the South African Companies Act No. 61 of 1973. South African residents are not permitted to acquire the Bonds in terms of South African exchange control rules as administered by the South African Reserve Bank. This announcement is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. Date: 21/05/2008 08:56:50 Supplied by www.sharenet.co.za 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.

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