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RAR - Rare Holdings Limited - Announcement of the proposed Claw-Back Offer
and conclusion of Subscription Agreement
RARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 2002/025247/06
Share Code: RAR ISIN: ZAE000092714
("the Company" or "Rare")
ANNOUNCEMENT OF THE PROPOSED CLAW-BACK OFFER AND CONCLUSION OF SUBSCRIPTION
AGREEMENT
1. INTRODUCTION TO THE CLAW-BACK OFFER
Shareholders are referred to the announcement dated 19 April 2012
whereby it was mentioned that the Company will pursue a capital raising
by way of a proposed Claw-Back Offer ("the Claw-Back Offer") in order
to re-capitalise the Company. Subsequent to the aforementioned
announcement, shareholders are hereby advised that the Company has
since entered into a subscription agreement with Mr Thembinkosi Siyolo
("Siyolo") and Doculate Investments (Pty) Limited ("Doculate"), the
latter being wholly-owned nominee company of Siyolo, in pursuance of
the Claw-Back Offer ("the Subscription Agreement").
2. RATIONALE
2.1 To recapitalise the business following the introduction of a new
management team during April 2012 and in the wake of a poor
performance during the preceding 6 month period as a result of
substantial provisions against old stock and debtors.
2.2 Furthermore, to introduce a long term strategic BEE partner and
secure a unique position within the industry as a majority black
owned listed Company.
3. SALIENT FEATURES OF THE CLAW-BACK OFFER
3.1 In terms of the of the Subscription Agreement, Siyolo and/or
Doculate ("the Subscribers") will, subject to the fulfilment of
the conditions precedent in paragraph 5 below, subscribe for 625
000 000 ordinary shares in Rare ("the Claw-Back Shares") at an
issue price of of 8 cents per share ("the Issue Price") amounting
to a total subscription price of R50 million ("the Total Purchase
Consideration").
3.2 The Issue Price represents a discount of approximately 31% to the
30 day volume weighted average share price of Rare as at 25 May
2012.
3.3 The Total Purchase Consideration is to be settled by way of the
procurement by the Subscribers of the cession of the following
loan claim portions (in the amount of R50 million) to Rare:
3.3.1 R35 million being a portion of the claims Mayfair
Speculators (Pty) Limited ("Mayfair") holds against Rare
Group (Pty) Limited; and
3.3.2 R15 million being a portion of the claims Mayfair holds
against Rare Capital (Pty) Limited.
3.4 Following the fulfilment of the last condition precedent detailed
in paragraph 4 below, all shareholders will be given the right to
participate in the Claw-Back Offer by acquiring from the
Subscribers such amount of Claw-Back Shares pro rata to their
shareholding as at the record date, details of which will be
included in the salient dates and times of the Waiver Circular (as
defined hereunder).
3.5 The aforementioned right to acquire the Claw-Back Shares from the
Subscribers will be afforded to shareholders on the same terms and
conditions (as may be applicable) at which the Subscribers
acquired the Claw-Back Shares in terms of the Subscription
Agreement.
3.6 A first circular is anticipated to be distributed to shareholders
on or about 1 June 2012 ("the Waiver Circular"), which circular
will provide shareholders with the relevant information regarding
the:
3.6.1 Waiver of the Mandatory Offer (as defined hereunder);
3.6.2 authority to issue the Claw-Back Shares in terms of
section 41(3) and 41(1)(a) of the Companies Act no 71 of
2008, as amended and its Regulations ("the Act")("the
Authority to Issue the Claw-Back Shares"); and
3.6.3 notice to convene the General Meeting in order to
propose such resolutions as are necessary to implement
the Claw-Back Offer ("the General Meeting").
4. POTENTIAL MANDATORY OFFER AND WAIVER THEREOF
4.1 In terms of section 123 of the Act, any person acting alone, or
two or more persons acting in concert, are required to make an
offer to minority holders in the event that they acquire such
number of shares which, together with any such shares already held
directly or indirectly, represent 35% or more of the total issued
share capital of the company("the Mandatory Offer).
4.2 In anticipation that certain shareholders might not follow their
rights, the Subscribers, individually and/or collectively, could
potentially surpass the 35% shareholding level and could therefore
be required to make a Mandatory Offer, unless same is waived in
terms of regulation 86(4) of the Companies Regulations (the
"Waiver of the Mandatory Offer").
4.3 In order to implement the Claw-Back Offer, independent
shareholders holding more than 50% of the general voting rights of
all the issued securities of the Company will be requested to
approve such resolutions tabled at the General Meeting as may be
necessary in support of the Waiver of the Mandatory Offer ("the
Waiver Resolution").
4.4 The Takeover Regulations Panel ("the TRP") has advised that it
will consider an application for the Waiver of the Mandatory offer
in terms of regulation 86(4) of the Companies Regulations,
provided that the Waiver of the Mandatory Offer is approved by
resolution of independent shareholders, as set out above, and
after considering any representations made by independent
shareholders.
4.5 Rare shareholders representing approximately 68.7% of the
independent shares in issue have irrevocably undertaken to vote in
favour of the Waiver of the Mandatory Offer required to implement
the the Claw-Back Offer.
4.6 Further details insofar the Mandatory Offer will be included in
the Waiver Circular.
5. CONDITIONS PRECEDENT
The Subscription Agreement is subject to the fulfilment of the
following conditions precedent:
5.1 The passing of the Waiver Resolution at the General Meeting;
5.2 The TRP granting the Waiver of the Mandatory Offer;
5.3 The passing of the resolution required for the Authority to Issue
the Claw-Back Shares;
5.4 All other regulatory approvals being obtained as may be required,
either unconditionally or subject to conditions acceptable to the
Subscribers and Rare; and
5.5 Approval by the JSE of the listing of the Claw-Back Shares.
6. DIRECTORS RESPONSIBILITY
The directors of Rare:
6.1 Collectively and individually accept full responsibility for the
accuracy of the information given in this announcement;
6.2 Certify that, to the best of their knowledge and belief, the
information in this announcement is true and correct; and
6.3 Certify that, the announcement does not omit anything likely to
affect the importance of the information.
7. FURTHER CORRESPONDENCE
7.1 Shareholders will be duly advised on the date the Waiver Circular
has been posted which will include the notice of the General
Meeting.
7.2 A second circular ("the Claw-Back Circular") incorporating the
full details of the Claw-Back Offer will be distributed to
shareholders after the General Meeting was held, subject to the
fulfilment of the Conditions Precedent in paragraph 4 above.
8. CAUTIONARY ANNOUNCEMENT
As the proposed Claw-Back Offer may have a material effect on the share
price of Rare, Shareholders are accordingly advised to exercise caution
when dealing in the securities of the Company until a further detailed
announcement setting out the salient dates and times as well as the
detailed pro forma financial effects of the Claw-Back Offer is made.
Johannesburg
31 May 2012
Corporate and Designated Adviser: PSG Capital Proprietary Limited
Date: 31/05/2012 16:00:02 Supplied by www.sharenet.co.za
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