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BFS - Blue Financial Services Limited- Confirmations received to convert r266.5m
of debt into equity in terms of the early conversion, continuation of cautionary
announcement and change to the board
Blue Financial Services Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1996/006595/06)
JSE Share code: BFS
ISIN: ZAE000083655
("Blue" or the "Company")
CONFIRMATIONS RECEIVED TO CONVERT R266.5M OF DEBT INTO EQUITY IN TERMS OF THE
EARLY CONVERSION, CONTINUATION OF CAUTIONARY ANNOUNCEMENT AND CHANGE TO THE
BOARD
1. INTRODUCTION
Shareholders are referred to the announcement released on the Securities
Exchange News Service ("SENS") of the JSE Limited ("JSE") on 10 December
2010 ("10 December 2010 announcement") wherein shareholders were advised,
inter alia, that on 9 December 2010 an addendum to the debt rescheduling
agreement ("Early Conversion Agreement") was concluded between the existing
lenders of the Company ("Existing Lenders"), the Company, certain of its
subsidiaries and Blue`s controlling shareholder, Mayibuye Group
(Proprietary) Limited ("Mayibuye").
The Early Conversion Agreement provides that, subject to obtaining inter
alia any required regulatory approvals and the approval of shareholders of
Blue, the Existing Lenders were granted the option to convert the whole or
a portion, up to a total aggregate amount of R325 million, of the amounts
owing to them into Blue ordinary shares ("Ordinary Shares"), at a
conversion price of R0.13 per Ordinary Share ("Early Conversion"). The
Existing Lenders were required to stipulate the amount of debt (if any)
which each Existing Lender wished to convert into Ordinary Shares by
delivering a written notice to the Company ("Conversion Notice") by 15
December 2010.
At the time of the 10 December 2010 announcement, shareholders were advised
that the International Finance Corporation had confirmed that it will be
converting the entire principal amount owing to it of circa R60.5 million
under the Early Conversion. Furthermore, Renaissance Africa Master Fund
Limited ("RenAsset"), being one of the Company`s existing lenders, and with
whom a separate convertible loan agreement had been entered into between
the Company and RenAsset ("RenAsset Agreement"), had also confirmed that it
will be converting the entire principal amount owing to it of circa. R44.4
million under the Early Conversion.
2. UPDATE ON EARLY CONVERSION
Shareholders are hereby advised that subsequent to the 10 December 2010
announcement, ABSA Bank Limited has advised the Company that it will also
be converting the entire principal amount owed to it by Blue, of circa.
R37.4 million, under the Early Conversion. This is in addition to the
confirmation received from the Nederlandse Financierings Maatschappji voor
Ontwikelingslanden N.V. (Dutch Development Bank), advising Blue that it
will be converting a portion of the principal amount owing to it of circa.
R80 million under the Early Conversion.
In summary, Blue has received Conversion Notices in respect of an aggregate
amount equal to R266.5 million from:
- Existing Lenders who are owed in aggregate R178.2 million;
- RenAsset who is owed R44.4 million; and
- Pinebridge who is owed R43.9 million in terms of the Pinebridge
Amendment Agreement concluded on 27 October 2010 ("Pinebridge
Amendment Agreement").
3. SUSPENSIVE CONDITIONS
Shareholders are reminded that the right of the Existing Lenders, RenAsset
and Pinebridge to participate in the Early Conversion in terms of the Early
Conversion Agreement, the RenAsset Agreement and the Pinebridge Amendment
Agreement, is subject to the obtaining of inter alia any required
regulatory approvals and the approval of shareholders of Blue on or before
28 February 2011.
4. CONTINUATION OF CAUTIONARY ANNOUNCEMENT RELATING TO THE EARLY CONVERSION
As the financial effects relating to the Early Conversion, that is proposed
will be implemented in terms of the Early Conversion Agreement, the
RenAsset Agreement and the Pinebridge Amendment Agreement, are in the
process of being finalised, shareholders are advised to continue to
exercise caution when dealing in their Blue securities until a further
announcement regarding the financial effects is made.
5. CHANGE TO THE BOARD
In terms of paragraph 3.59(a) of the listings requirements of the JSE, the
board of directors of Blue ("board") is pleased to announce the
reappointment of MG Meehan as an independent non-executive director of the
board. Mr Meehan will also assume the role of chairman of the audit
committee of the Company.
Mr Meehan is a chartered accountant with extensive commercial experience
having sat on the boards, in an executive capacity, of various main board
listed companies in the past. Mr Meehan currently serves as an independent
non-executive director on the board of another ALTx listed company as well
as on the boards of other non-listed companies. Mr Meehan previously served
on the board of Blue as an independent non-executive director from 26
February 2009 until 13 December 2010.
Pretoria
21 January 2011
Designated adviser to Blue
Grindrod Bank Limited
Financial adviser to Blue in relation to the Early Conversion
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited
Date: 21/01/2011 13:00:02 Supplied by www.sharenet.co.za
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