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ADW - AFDAWN - Financial Effects of Rights Offer and Convertible Bonds and

Release Date: 05/08/2011 16:09
Code(s): ADW
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ADW - AFDAWN - Financial Effects of Rights Offer and Convertible Bonds and Withdrawal of Cautionary AFRICAN DAWN CAPITAL LIMITED (Incorporated in the Republic of South Africa) (Registration number 1998/020520/06) JSE code: ADW ISIN: ZAE000060703 ("Afdawn" or "the company") - FINANCIAL EFFECTS OF RIGHTS OFFER AND CONVERTIBLE BONDS - WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 1. Introduction Shareholders are referred to an announcement released on SENS on 14 June 2011 wherein Afdawn shareholders were advised that the company had entered into a settlement agreement with The National Housing Finance Corporation Limited ("NHFC") in respect of outstanding loans to the company and its subsidiary, Nexus Personnel Finance Proprietary Limited and that the board of directors of Afdawn had therefore resolved to raise approximately R36.7 million by way of: - a R25 million partially underwritten renounceable rights offer ("rights offer") of 250 million new ordinary Afdawn shares of R0.01 each ("rights offer shares") to Afdawn shareholders at a subscription price of R0.10 per rights offer share ("subscription price") and in the ratio of 112 rights offer shares for every 100 Afdawn shares held. The subscription price represents a premium of 11% to the closing price of Afdawn ordinary shares on 13 June 2011 of R0.09. The rights offer is partially underwritten by Sandown Capital Proprietary Limited ("Sandown Capital"),PCI Fintrade Proprietary Limited ("PCI") and Imperial Crown 377 Proprietary Limited ("Imperial Crown"); - a R10 million 3 year convertible bond to be issued by Elite Group Proprietary Limited ("Elite") to Sandown Capital ("Sandown Capital Bond"), subject to shareholder approval; and - a R1.7 million 3 year convertible bond to be issued by Afdawn to PCI ("PCI Bond"), subject to shareholder approval, collectively, ("the transaction"). 2. Financial Effects The pro forma financial effects of the transaction are set out below. The pro forma financial effects have been prepared for illustrative purposes only to provide information on how the transaction may have impacted on the results and financial position of Afdawn. Preparation of the pro forma financial effects is the responsibility of the directors of Afdawn. Because of their nature, the pro forma financial effects may not fairly present Afdawn`s financial position after the transaction or the effects on future earnings. Before After the Percent- After the Percent- the Transac- age Transac- age transac- tions(1) change tions(2) change tions
28-Feb- 11 Earnings per 1.63 3.46 113% 2.73 67% share (cents) Headline 1.03 3.17 208% 2.50 142% earnings per share (cents) NAV (cents per 11.69 12.03 3% 11.59 -1% share) TNAV (cents per 11.69 12.03 3% 11.59 -1% share) Number of shares 222,926 452,416 103% 576,161 158% in issue (`000) Weighted average 222,926 452,416 103% 576,161 158% number of shares in issue (`000) - Pro forma adjustments to the Afdawn statement of financial position are calculated on the assumption that the proceeds of the transaction were received on 28 February 2011 and liabilities settled on the same day. - Pro forma adjustments to the Afdawn statement of comprehensive income are calculated on the assumption that the proceeds of the transaction were received on 1 March 2010. - Estimated transaction costs of R1.7 million, relating to the transaction, have been taken into account in determining the financial effects and have been allocated to share capital or retained earnings. Notes: Prepared on a minimum base scenario of: - R10.125 million received in respect of the Rights Offer in line with the conditional irrevocable undertakings received; - R10 million (Sandown Capital underwrite); - R1.7 million (PCI underwrite); - R0.75 million (Imperial Crown 377 (Pty) Ltd underwrite); - R10 million (Sandown Capital Bond); and - R1.7 million (PCI Bond). Proceeds of the transaction were assumed to be utilised as follows: - Settle the NHFC loan (long term borrowings) with R23 million - Pay taxation of R1 million - Settle FNB overdraft of R0.3 million Prepared on a maximum base scenario of: - R25 million for the Rights Offer; - R7.5 million (Sandown underwrite); - R1.7 million (PCI underwrite); - R0.75 million (Imperial underwrite); - R10 million (Sandown Capital Bond); and - R1.7 million (PCI Bond) Proceeds of the transaction were assumed to be utilised as follows: - Settle the NHFC loan (long term borrowings) with R23 million - Pay taxation of R 11.1 million - Settle FNB overdraft of R 0.3 million - Retain working capital of R1 million - Pay transaction costs of R 1.3 million 3. Withdrawal of cautionary announcement Having regard to the information disclosed above, shareholders are advised that they are no longer required to exercise caution when dealing in the company`s securities. A circular to Afdawn shareholders containing revised listing particulars, the requisite information pertaining to the transactions and convening a general meeting of shareholders will be posted to shareholders on or about Wednesday, 10 August 2011. Johannesburg 5 August 2011 Designated advisor and corporate advisor: Sasfin Capital A division of Sasfin Bank Limited Date: 05/08/2011 16:09:14 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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