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VUN - Vunani - Proposed Rights Offer And Debt Restucturing VUNANI LIMITED (Incorporated in the Republic of South Africa) (Registration number 1997/020641/06) JSE code: VUN ISIN: ZAE000110359 ("Vunani" or "the Company") INFORMATION RELATING TO A PROPOSED RIGHTS OFFER, DEBT RESTRUCTURING, RELEASE OF THE 2008 ANNUAL REPORT AND RENEWAL OF CAUTIONARY ANNOUNCEMENT PROPOSED RIGHTS OFFER AND DEBT RESTUCTURING Background In terms of an announcement dated 20 March 2009, Vunani shareholders were advised that the decline in the share prices of certain of Vunani`s empowerment investments resulted in a breach of certain of the debt covenant ratios with a number of financial institutions which funded Vunani`s participation in such investments ("Lenders"). Shareholders are advised that Vunani and the Lenders entered into a Heads of Agreement ("Agreement") on 30 June 2009, to restructure Vunani`s existing debt and recapitalise Vunani to the extent of R325.0 million, to ensure the continued sustainability of Vunani and its subsidiaries ("the Restructuring"). Terms of the Restructuring The Restructuring will be effected through a R325 million rights offer to Vunani ordinary shareholders of 3 250 million new ordinary shares at 10 cents per new ordinary share ("the rights offer"). Vunani Group (Proprietary) Limited ("Vunani Group"), the controlling shareholder of Vunani, will underwrite R313.6 million of the rights offer. The proposal containing the principle terms on which Vunani Group will be funded to enable it to underwrite the rights offer has been accepted by Vunani Group. Of the R325 million to be raised by Vunani in terms of the rights offer, R313.6 million will be used to repay debt. As part of the Restructuring, Vunani will maintain its black ownership in excess of 51%. The Restructuring will be implemented pursuant to, inter alia: - regulatory approvals to the extent required; - conclusion and approval of an underwriting agreement between Vunani Group and Vunani; - conclusion of the funding agreement required for Vunani Group to effect the underwriting; and - the conclusion of the amendments to existing loan agreements. It is anticipated that the Restructuring will be completed before the end of October 2009. The actions taken and strategies implemented will provide Vunani with a stronger balance sheet to withstand the current adverse market conditions. Financial effects of the Restructuring The financial effects of the Restructuring will be released once the relevant amendments to the existing loan agreements with the Lenders have been made. AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008 Annual Report The Agreement, which contains the principle terms of the Restructuring, was signed on 30 June 2009. The Restructuring removes the material uncertainty which may have cast significant doubt on the company`s ability to continue as a going concern that was disclosed in the Group`s Reviewed Condensed Consolidated Financial Results for the year ended 31 December 2008, released on 31 March 2009. Accordingly, the annual report, including the audited financial statements, is expected to be posted to shareholders by mid July 2009. Condensed audited results The condensed audited financial results for the year ended 31 December 2008 will be released on SENS on or about 6 July 2009. RENEWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are advised to continue exercising caution in dealing in the Company`s ordinary shares on the JSE until such time as an announcement, containing confirmation of the finalisation of the amendments to the existing loan agreements and the financial effects of the Restructuring, is released. Sandton 1 July 2009 Financial advisor to Vunani RAND MERCHANT BANK (A division of FirstRand Bank Limited) Lead Designated Adviser Grindrod Bank Limited Corporate Adviser and Joint Designated Adviser Vunani Corporate Finance Date: 01/07/2009 14:49:01 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.
