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SHP - Shoprite Holdings Limited - Specific issue of shares for the conversion of
Convertible Bonds, Posting of circular and Notice of General Meeting
SHOPRITE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1936/007721/06)
(ISIN: ZAE000012084)
(JSE Share code: SHP)
(NSX Share code: SRH)
(LuSE Share code: SHOPRITE)
("Shoprite Holdings", "Shoprite Group" or "the Company")
SPECIFIC ISSUE OF SHARES FOR THE CONVERSION OF CONVERTIBLE BONDS, POSTING OF
CIRCULAR AND NOTICE OF GENERAL MEETING
1 Introduction
Shoprite Holdings shareholders are referred to the announcement released on
SENS on 22 March 2012 relating to the successful placement of new Shoprite
Holdings ordinary shares ("Ordinary Shares") and convertible bonds for
total gross proceeds of approximately R8.0 billion, by way of concurrent
accelerated bookbuild offerings to qualifying investors ("the Offering"),
as follows:
- Shoprite Holdings issued 27.1 million new Ordinary Shares under a
general authority at R127.50 per share, for gross proceeds of
approximately R3.5 billion ("Share Placement"); and
- Shoprite Investments (Proprietary) Limited issued 6.5% convertible
bonds due April 2017 ("Convertible Bonds") in a nominal amount of R4.5
billion.
On 9 May 2012 Shoprite Investments (Proprietary) Limited issued additional
Convertible Bonds in a nominal amount of R200 million to Shoprite Checkers
(Proprietary) Limited, to be utilized as part of an incentive scheme for
its employees. The details of the incentive scheme will be presented for
approval to Shoprite Holdings shareholders at the next Annual General
Meeting of the Company.
The Convertible Bonds are currently cash-settled instruments. In order for
Shoprite Holdings to settle the Convertible Bonds by the issue of new
Shoprite Holdings Ordinary Shares, a specific authority is being sought
from shareholders for the issue of a maximum of 30 000 000 new Ordinary
Shares upon conversion of the Convertible Bonds. The initial conversion
price is R168.74 per Ordinary Share.
In addition, in terms of Shoprite Holdings` memorandum of incorporation,
whenever the Company issues new Ordinary Shares, Thibault Square Financial
Services (Proprietary) Limited ("Thibault Square") is entitled to subscribe
for additional non-convertible, non-participating no par value deferred
shares in Shoprite Holdings ("Deferred Shares") to ensure that it continues
to hold the same ratio of Deferred Shares to Ordinary Shares, as prior to
the issue of new Ordinary Shares. Shoprite Holdings is therefore also
seeking specific authority from shareholders to issue 13 803 405 Deferred
Shares in terms of the Share Placement and up to a maximum of 15 280 522
Deferred Shares upon the conversion of the Convertible Bonds. The
subscription consideration in respect of the Deferred Shares is 0.1 cent
per Deferred Share.
2 Application of proceeds of the Offering
Shoprite Holdings intends to use the proceeds of the Offering to:
* fund organic growth initiatives, opening new stores in existing
markets and investing further in optimising supply chain and
distribution;
* accelerate the Company`s African expansion through the purchase and
development of property in both new and existing Sub-Saharan African
markets;
* enhance the Company`s ability, independent of any volatility in market
conditions or funding constraints, to pursue acquisitions in South
African and abroad;
* increase balance sheet flexibility and proactively manage the capital
structure, better aligning the funding of the Company`s long term
investments with long term capital, repaying short term credit
facilities and diversifying funding sources; and
* further improve working capital management, leveraging increased
liquidity to obtain better terms from suppliers and strategically
building inventory in an inflationary environment.
3 Independent fairness opinion
An independent professional expert was appointed by the board of directors
of Shoprite Holdings ("the Board") to determine whether the terms and
conditions of the issue of the Convertible Bonds are fair to Shoprite
Holdings shareholders.
The independent professional expert appointed by the Board, has considered
the terms and conditions of the issue of the Convertible Bonds and is of
the opinion that such terms and conditions are fair to Shoprite Holdings
shareholders.
A copy of the independent professional expert`s opinion is included in the
circular to Shoprite Holdings shareholders, as mentioned in paragraph 5
below.
4 Unaudited pro forma financial effects of the Offering
The unaudited pro forma financial information of Shoprite Group is the
responsibility of the Board and has been prepared to illustrate the effects
of the Share Placement, the issue of the cash-settled Convertible Bonds and
the subsequent approval for the issue of Ordinary Shares upon conversion of
the Convertible Bonds, assuming that the Share Placement and the issue of
the Convertible Bonds took place on 1 July 2011 for purposes of the
statement of comprehensive income and on 31 December 2011 for purposes of
the statement of financial position.
The unaudited pro forma financial information has been prepared for
illustrative purposes only and may not give a fair reflection of the
financial position, changes in equity, results of operations or cash flows
of Shoprite Group.
For the six Pro Pro Pro %
months ended 31 Unaudite forma forma forma Chang
December 2011 d 6 after after after e8
(per Ordinary months Share issue approval
Share) ended Placem of for
December ent cashset conversi
2011 tled on into
Convert Ordinary
ible Shares
Bonds
Net asset value cent 1 574 2 133 2 133 2 199 3.1
per share1 s
Basic earnings cent 280.3 279.2 217.3 254.1 17.0
per share2 s
Diluted earnings cent 280.3 279.2 217.3 254.1 17.0
per share3 s
Headline cent 280.8 279.7 217.7 254.6 16.9
earnings per s
share4
Weighted average 506 132 533 533 232 533 232 0.0
number of 513 232 513 513
Ordinary Shares 513
in issue5
Weighted average 506 132 533 533 232 533 232 0.0
diluted number 513 232 513 513
of Ordinary 513
Shares in issue6
Number of 506 132 533 533 232 533 232 0.0
Ordinary Shares 513 232 513 513
in issue7 513
Notes and assumptions:
The unaudited financial information for the six months ended December 2011
has been extracted from the published interim results announcement of
Shoprite Holdings.
Rounding of figures may result in computational discrepancies.
1 Net asset value per share is computed by dividing capital and reserves
by the number of Ordinary Shares in issue (excluding treasury shares).
2 Basic earnings per share is computed by dividing profit attributable
to owners of the parent by the weighted average number of Ordinary
Shares in issue (excluding treasury shares).
3 Diluted earnings per share is computed by adjusting the weighted
average number of Ordinary Shares in issue (excluding treasury shares)
to assume conversion of all dilutive potential Ordinary Shares. The
Convertible Bonds are assumed to have been converted into Ordinary
Shares, and the profit attributable to owners of the parent is
adjusted to eliminate the interest expense less the tax effect. The
issue of cash-settled Convertible Bonds before approval by the
shareholders had no dilutive effect and the approval for conversion
into Ordinary Shares by shareholders results in an anti-dilutive
effect for the six months ended December 2011. Diluted earnings per
share is therefore equal to basic earnings per share.
4 Headline earnings removes items of a capital nature from the
calculation of earnings per share. Headline earnings per share is
computed by dividing headline earnings by the weighted average number
of Ordinary Shares in issue (excluding treasury shares).
5 The weighted average number of Shoprite Holdings Ordinary Shares in
issue (excluding treasury shares) as reflected in the published
interim results announcement of Shoprite Holdings was 506 132 513 for
the six months ended December 2011. This number increased to 533 232
513 as a result of the Share Placement.
6 The weighted average diluted number of Shoprite Holdings Ordinary
Shares in issue (excluding treasury shares) as reflected in the
published interim results announcement of Shoprite Holdings was 506
132 513 for the six months ended December 2011. This number increased
to 533 232 513 as a result of the Share Placement. The issue of cash-
settled Convertible Bonds before approval by the shareholders had no
dilutive effect and the approval by shareholders results in an anti-
dilutive effect for the six months ended December 2011. The weighted
average diluted number of Ordinary Shares in issue is therefore equal
to the weighted average number of Ordinary Shares in issue.
7 The number of Shoprite Holdings Ordinary Shares in issue (excluding
treasury shares) as reflected in the published interim results
announcement of Shoprite Holdings was 506 132 513 for the six months
ended December 2011. This number increased to 533 232 513 as a result
of the Share Placement.
8 The percentage change is calculated as the percentage change in the
pro forma financial effects from after the issue of cashsettled
Convertible Bonds to after the approval for conversion into Ordinary
Shares.
5 Posting of circular and notice of general meeting
A circular, incorporating a notice of general meeting, convening a meeting
of Shoprite Holdings shareholders to consider and approve the resolutions
required for the issue of new Ordinary Shares and Deferred Shares has been
posted to Shoprite Holdings shareholders today.
Notice is hereby given that the general meeting of Shoprite Holdings
shareholders will be held at the Company`s registered office, corner
William Dabs and Old Paarl Roads, Brackenfell, South Africa on Thursday, 28
June 2012 at 09:15 to transact the business as stated in the general
meeting notice.
Cape Town
30 May 2012
Sponsor
Nedbank Capital
Legal adviser
Werksmans
Independent reporting accountants
PwC
Independent professional expert
PSG Capital
Date: 30/05/2012 12:00:05 Supplied by www.sharenet.co.za
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