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TDH - Tradehold Limited - Capital Raising of R650 Million by way of a fully
underwritten renounceable rights offer - declaration data announcement and
withdrawal of cautionary announcement
Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
("Tradehold" or "the Company")
Share code: TDH
ISIN code: ZAE000152658
CAPITAL RAISING OF R650 MILLION BY WAY OF A FULLY UNDERWRITTEN RENOUNCEABLE
RIGHTS OFFER - DECLARATION DATA ANNOUNCEMENT AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1 Introduction, rationale and terms of the rights offer
Tradehold shareholders ("Shareholders") are referred to the cautionary
announcements released on the Securities Exchange News Service ("SENS") of the
JSE Limited ("JSE") on Tuesday, 16 November 2010, Friday, 17 December 2010 and
Friday, 21 January 2011, whereby Shareholders were advised that Tradehold
intends raising equity capital in the amount of up to R650 million by way of a
fully underwritten renounceable rights offer ("rights offer") for 103 833 866
new ordinary shares with a par value of 1 cent each in the authorised and issued
ordinary share capital of the Company ("rights offer shares").
The purpose of the rights offer is to strengthen the Company`s balance sheet and
provide working capital for future expansion.
In terms of the rights offer, 103 833 866 rights offer shares will be offered
for subscription to Shareholders recorded on the Shareholder register on the
record date of the rights offer, Friday, 15 April 2011 ("Qualifying
Shareholders"). Qualifying Shareholders will be entitled to subscribe for
298.94835 rights offer shares for every 100 Tradehold ordinary shares held on
the record date of the rights offer, at a subscription price of 626 cents per
rights offer share ("subscription price").
The subscription price represents a discount of 15% to the volume-weighted
average price of the Tradehold shares on the exchange operated by the JSE for
the 30 business days ended Tuesday, 8 March 2011.
The rights offer shares will, upon allotment and issue, rank pari passu, with
the existing authorised and issued ordinary shares of the Company, in terms of
both voting rights and dividends and do not provide for any preferential or
convertibility rights.
2 Underwriting agreement, irrevocable undertakings and excess applications
The Company has entered into an underwriting agreement ("underwriting
agreement") with Granadino Investments (Proprietary) Limited ("the Underwriter")
to fully underwrite the rights offer in respect of the maximum subscription
consideration of R650 million. In terms of the underwriting agreement:
* an underwriting fee equal to R100 000, excluding Value Added Tax, is
payable by the Company to the Underwriter, which equates to 0.015% of the
amount underwritten; and
* the Underwriter is obliged to subscribe for the rights offer shares not
subscribed for by Qualifying Shareholders pursuant to the rights offer,
upon receipt of the allocation notice, which shall be delivered to the
Underwriter after the closing date of the rights offer.
The underwriting agreement is subject to certain conditions, which are normal
for a transaction of this nature.
In addition, Shareholders including Titan Nominees (Proprietary) Limited, Titan
Premier Investments (Proprietary) Limited, Titan Share Dealers (Proprietary)
Limited and Titan Global (Proprietary) Limited ("Titan"), holding 62% of the
ordinary shares in issue have provided written undertakings that they would
follow all their rights in respect of the rights offer ("irrevocable
undertakings`).
Further details of the underwriting agreement and the irrevocable undertakings
are set out in the rights offer circular expected to be posted to Shareholders
on or about Monday, 18 April 2011 ("circular").
Qualifying Shareholders may not apply for rights offer shares in excess of those
allocated to them in terms of the rights offer, and any rights offer shares that
are not accepted, renounced or sold shall revert to the Underwriter.
3 Preference share issue
In terms of and in accordance with the obligations and rights of Titan, the
holder of the non-convertible, non-participating, non-transferable redeemable
unlisted preference shares in the capital of the Company with a par value of 1
cent each ("preference shares"), as set out in Article 39 of the Articles of
Association of the Company ("Articles"), 43 005 592 preference shares will be
allotted and issued to Titan following the rights offer, against the
subscription consideration of 1 cent per preference share. This allotment and
issue of preference shares is to ensure that Titan continues to hold the ratio
of preference shares to ordinary shares which it held immediately prior to the
issue of ordinary shares pursuant to the rights offer as required in Article
39.7.2 of the Articles.
4 Conditions precedent
The rights offer remains subject to:
* the registration, by the Companies and Intellectual Property Registration
Office ("CIPRO"), of all the documents required to be registered in terms
of the Companies Act 1973 (Act 61 of 1973), as amended, for implementation
of the rights offer; and
* the circular, incorporating revised listing particulars, and renounceable
nil paid letters of allocation being approved by the JSE and registered by
CIPRO.
5 Consolidation
Shareholders are further advised that on 31 January 2011, the authorised and
issued ordinary share capital and non-convertible non-participating non-
transferable redeemable preference share capital ("preference share capital") of
the Company was consolidated on the basis of 1 share for every 10 shares held
("consolidation").
6 The pro-forma financial effects of the rights offer
The unaudited pro forma financial effects are provided for illustrative purposes
only to provide information as to how the rights offer might have impacted on
Tradehold`s results and financial position had the rights offer been implemented
on 31 August 2010 for purposes of the statement of financial position and on 1
March 2010 for purposes of the statement of comprehensive income. Due to the
nature of the pro forma financial information, it may not fairly present the
financial position, changes in equity, results of operations or cash flows of
Tradehold and its subsidiaries ("the Group") after the rights offer.
The unaudited pro forma financial effects have been prepared in accordance with
the JSE Listings Requirements and the Guide on Pro Forma Financial Information
issued by The South African Institute of Chartered Accountants ("SAICA"). These
unaudited pro forma financial effects are the responsibility of the board of
directors of Tradehold as at the date of this announcement.
Before the After the After the Percentage change
consolidat consolidat consolidati
ion and ion but on and
rights before the rights
offer rights offer
offer
(pence) (pence) (pence) (%)
Earnings per share 0.2 1.6 0.4 (75.0%)
("EPS")
Diluted EPS 0.2 1.6 0.4 (75.0%)
Headline earnings 0.2 1.6 0.4 (75.0%)
per share ("HEPS")
Diluted HEPS 0.2 1.6 0.4 (75.0%)
Net asset value 8.6 86.4 62.9 (27.3%)
per share ("NAV")
Tangible net asset 8.6 86.4 62.9 (27.3%)
value per share
("TNAV")
Ordinary shares in 346 542 34 654 138 488 299.6%
issue (net of
treasury shares)
(`000)
Weighted average 346 542 34 654 138 488 299.6%
number of ordinary
shares in issue
(`000)
Notes and
assumptions:
(8.19 (b))
1 The `Before the consolidation and rights offer` column has been extracted
from the published financial statements of Tradehold for the six months
ended 31 August 2010 as released on SENS on 16 November 2010, other than
the TNAV which was not published, but has been calculated for presentation
in this announcement for purposes of compliance with the JSE Listings
Requirements.
2 EPS, Diluted EPS, HEPS, Diluted HEPS, NAV and TNAV reflected in the `After
the consolidation but before the rights offer` column are based on the
weighted average number of shares and the weighted average number of
diluted shares in issue as at 31 August 2010 of 346 542 120, adjusted for
the consolidation of ordinary shares on a 10:1 basis.
3 EPS, Diluted EPS, HEPS, Diluted HEPS, NAV and TNAV reflected in `After the
consolidation and rights offer` column are based on the weighted average
number of shares and the weighted average number of diluted shares in issue
post the consolidation of 34 654 212 adjusted for 103 833 866 rights offer
shares issued. No interest or other income has been assumed on the
proceeds of the rights offer as per the Guide on Pro Forma Financial
Information, issued by SAICA.
4 The unaudited pro forma financial effects on the `statement of
comprehensive income` were prepared on the basis that the rights offer was
fully subscribed and completed on 1 March 2010 and the unaudited pro forma
financial effects on the `financial position` were prepared on the basis
that the rights offer was fully subscribed and completed on 31 August 2010.
5 NAV and TNAV have been adjusted to include the net cash proceeds of the
rights offer (comprising the proceeds received from the subscription of the
rights offer shares and the subscription of the preference shares, net of
transaction costs), assumed to be R648 million (GBP57 million), the
increase in ordinary share capital and ordinary share premium arising from
the issue of 103 833 866 ordinary shares of 1 cent each at an issue price
of 626 cents per share and an increase in preference share capital arising
from the issue of 43 005 592 preference shares of 1 cent each at an issue
price of 1 cent per share. Estimated costs of R2.5 million pertaining to
the rights offer (inclusive of underwriting fees) have been capitalised
against ordinary share premium. The estimated costs are once-off by
nature.
6 Per Tradehold`s accounting policies, assets and liabilities are translated
at the closing rate at the date of the statement of financial position,
being 31 August 2010 (GBP0.0882:R1), and income and expenses for each
profit or loss are translated at an average exchange rate (GBP0.0884:R1)
for the six months ended 31 August 2010, all resulting exchange differences
are recognised as a separate component of equity in other comprehensive
income.
7 In order to be consistent with the interim results for the six months ended
31 August 2010, the pro forma financial effects have been presented in
Pound Sterling, the Company`s functional currency and the Group`s
presentation currency.
7 Salient dates and times
The salient dates and times in respect of the rights offer are set out below:
2011
Last day to trade in Tradehold shares in Friday, 8 April
order to settle trades by the record date for
the rights offer and to qualify to
participate in the rights offer (cum
entitlement) at 17:00 on
Tradehold shares commence trading ex- Monday, 11 April
entitlement at 09:00 on
Listing of and trading in the letters of Monday, 11 April
allocation on the exchange operated by the
JSE commences at 09:00 on
Record date for purposes of determining the Friday, 15 April
Shareholders entitled to participate in the
rights offer
The circular and form of instruction, where Monday, 18 April
applicable, posted to Shareholders
Rights offer opens at 09:00 on Monday, 18 April
Letters of allocation credited to an Monday,18 April
electronic account held at the transfer
secretaries in respect of Shareholders
holding certificated shares
Central Securities Depository Participant Monday, 18 April
("CSDP") or broker accounts credited with
letters of allocation in respect of
Shareholders holding dematerialised shares
Last day for trading letters of allocation on Thursday, 28 April
the exchange operated by the JSE in order to
settle trades by record date for the rights
offer and participate in the rights offer
Last day for the form of instruction to be Thursday, 28 April
lodged with transfer secretaries by
Shareholders holding certificated shares
wishing to sell all or part of their
entitlement by 12:00 on
Listing and trading of rights offer shares on Friday, 29 April
the exchange operated by the JSE commences at
09:00 on
Rights offer closes at 12:00 (See note 4) Friday, 6 May
Payment to be made and form of instruction to
be lodged by Shareholders holding
certificated shares with the transfer
secretaries by 12:00 on
Record date for the letters of allocation Friday, 6 May
Rights offer shares allocated on Monday, 9 May
CSDP or broker accounts in respect of Monday, 9 May
Shareholders holding dematerialised shares
debited and updated with rights offer shares
and share certificates posted Shareholders
holding certificated shares by registered
post on or about
Results of the rights offer announced on SENS Monday, 9 May
Allocation notice delivered to Underwriter Monday, 9 May
Results of the rights offer published in the Tuesday, 10 May
press
Payment in terms of the allocation notice to Wednesday, 11 May
be received from Underwriter
Rights offer shares not subscribed for by Wednesday, 11 May
Qualifying Shareholders allotted and issued
to the Underwriter on or about
Notes:
1 Unless otherwise indicated, all times referred to in this announcement are
local times in the Republic of South Africa on a 24 hour basis.
2 The above dates could be varied. Any material variation to the above dates
and times will be announced on SENS and published in the press.
3 Share certificates in respect of Tradehold shares may not be dematerialised
or rematerialised between Monday, 11 April 2011 and Friday, 15 April 2011,
both days inclusive.
4 If you are a Qualifying Shareholder holding dematerialised shares you are
required to notify your duly appointed CSDP or broker of your acceptance of
the rights offer in the manner and time stipulated in the custody agreement
and/or broker mandate governing the relationship between yourself and your
CSDP or broker.
5 CSDPs effect payment on a delivery versus payment method in respect of
Qualifying Shareholders holding dematerialised shares.
8 Finalisation announcement
It is anticipated that the finalisation announcement for the rights offer will
be released on SENS on Friday, 1 April 2011 and in the press on Monday, 4 April
2011.
9 Posting of the rights offer circular
Shareholders are advised that the circular, containing full details of the terms
of the rights offer, and a form of instruction in respect of letter of
allocation will be mailed to all Qualifying Shareholders on or about Monday, 18
April 2011.
10. Jurisdiction
The rights offer does not constitute an offer in any jurisdiction in which it is
illegal to make such an offer and in such circumstances, the circular, if sent,
is sent for information purposes only.
The rights offer contained in the circular does not constitute an offer in the
United States of America, the District of Columbia, the Dominion of Canada, the
Commonwealth of Australia, Japan or in any other jurisdiction in which, or to
any person to whom, it would not be lawful to make such an offer. Shareholders
should consult their professional advisors immediately to determine whether any
governmental or other consents are required or other formalities need to be
observed to allow them to take up the rights offer, or trade their entitlement.
The purpose of these provisions is not to exclude any Shareholder or category of
Shareholders from the rights offer, but to ensure that no laws of any
jurisdiction are breached. A Shareholder who resides in a jurisdiction where the
rights offer by virtue of this paragraph does not constitute an offer, may
accept the rights offer in any other jurisdiction in which it is not illegal to
make the rights offer. Any rights offer shares that are not accepted, renounced
or sold or allowed to be taken up shall revert to the Underwriter.
11. Withdrawal of cautionary
As the details of the rights offer have now been announced, as per this
announcement, Shareholders are no longer required to exercise caution when
dealing in the Company`s shares.
Cape Town
9 March 2011
Corporate advisor Transaction and lead sponsor
Bravura Equity Services (Proprietary)
Limited logo Deloitte & Touche Sponsor
Services (Proprietary) Limited
logo
Attorneys Financial advisor and sole
Werksmans Incorporated logo financier to the Underwriter and
Investment bank to Tradehold
The Hongkong and Shanghai Banking
Corporation Limited (Incorporated
in Hong Kong) - Johannesburg
Branch (HSBC) logo
Company sponsor Independent reporting accountants
to Tradehold
PricewaterhouseCoopers Inc logo
Barnard Jacobs Mellet Corporate Finance
(Proprietary) Limited
Date: 09/03/2011 16:52:00 Supplied by www.sharenet.co.za
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