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JDG - JD Group Limited - Launch of convertible bond offering
JD Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1981/009108/06)
JSE share code: JDG
ISIN: ZAE000030771
("JD Group")
LAUNCH OF CONVERTIBLE BOND OFFERING
1. Introduction
JD Group is pleased to announce the launch of its inaugural offering of
convertible bonds due June 2017 (the "Bonds") in a nominal amount of up to
R1.0 billion, with an option to increase the issue size (the "Offering").
The Bonds will be issued by JD Group, under its existing general authority
(the "General Authority"), approved by JD Group shareholders ("Shareholders")
at the Annual General Meeting of Shareholders held on Thursday, 16 February
2012.
2. Terms of the Offering
The Bonds are expected to carry a semi-annual coupon of between 7.0-7.5% per
annum and will be convertible into ordinary shares in JD Group ("JD Group
Shares"). The initial conversion price in respect of the Bonds is expected to
be set at a premium of 30-35% above the reference price of R43.62, being the
5-day volume-weighted average price of JD Group Shares up to Monday, 11 June
2012.
The Bonds will be issued at 100% of their nominal amount and, unless
converted, repurchased or redeemed before June 2017, will be redeemed at par
in June 2017. JD Group will have the option to call the Bonds after four
years, if the price of JD Group Shares exceeds 130% of the then prevailing
conversion price over a specified period.
The Offering will be made by way of an accelerated bookbuild offering to
local and international qualifying institutional investors only. In terms of
the General Authority, the Offering will not be made to any related parties
of JD Group as defined in the Listings Requirements of the JSE Limited
("JSE").
The Offering is open with immediate effect and will close as soon as is
practicable today, Tuesday, 12 June 2012.
3. Rationale and use of proceeds
The Offering will enable JD Group to:
- optimise its capital structure and cost of capital;
- extend its debt maturity profile by raising five-year bullet funding;
- achieve better matching of its assets and liabilities by the funding of
long-term assets with long-term debt;
- access capital markets to diversify its sources of funding and reduce
its reliance on traditional bank funding sources;
- provide flexibility in the capital and funding structure by issuing an
instrument that can be converted into equity over the life of the
instrument; and
- enhance the financial flexibility of the business in an environment
where availability of longer-term bank funding may become constrained or
less attractively priced.
JD Group intends to use the net proceeds of the Offering to primarily fund
the expected growth in its consumer finance business.
4. Fairness opinion
In terms of the General Authority, the issuance of a fairness opinion
prepared by an independent professional expert is a condition precedent to
the issue of the Bonds.
In accordance with the Listings Requirements of the JSE,
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited ("PwC") has
been appointed by the board of directors of JD Group as independent
professional expert to consider and issue an opinion on whether the terms of
the Offering are fair in so far as Shareholders are concerned (the "Fairness
Opinion").
The Fairness Opinion will be submitted to the JSE for approval and will
become available for inspection at the registered office of JD Group (being
JD House, 27 Stiemens Street, Braamfontein, Johannesburg) for a period of two
weeks from the date of settlement.
5. Settlement and listing
It is expected that settlement of the Bonds will take place on or about
Wednesday, 20 June 2012.
JD Group will apply for admission of the Bonds to trading on the Main Board
of the JSE. It is expected that listing of the Bonds will take place on or
about Wednesday, 20 June 2012.
6. Lock-in
JD Group, its Chief Executive Officer, its Executive Chairman and its major
shareholder, Steinhoff Africa Holdings (Proprietary) Limited, have agreed not
to issue or dispose of any JD Group Shares, or securities convertible or
exchangeable into JD Group Shares, held by or on behalf of them, for a period
of 120 days following the Offering, subject to certain customary exceptions.
7. Bookrunners
Rand Merchant Bank, a division of FirstRand Bank Limited and The Standard
Bank of South Africa Limited, are acting as joint bookrunners for the
Offering (the "Bookrunners").
Johannesburg
12 June 2012
Joint Transaction Adviser and Bookrunner
Rand Merchant Bank, a division of FirstRand Bank Limited
Joint Transaction Adviser and Bookrunner
Standard Bank
Sponsor to JD Group
PSG Capital Proprietary Limited
Independent Professional Expert
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited
Legal adviser to JD Group
DLA Cliffe Dekker Hofmeyr
Legal adviser to the Bookrunners
Webber Wentzel
This announcement is not for publication or distribution or release, directly
or indirectly, in the United States of America (including its territories and
possessions, any state of the United States and the District of Columbia).
This announcement does not constitute or form part of an offer or
solicitation of an offer to purchase or subscribe for securities in the
United States or any other jurisdiction. The securities referred to herein
have not been and will not be registered under the United States Securities
Act of 1933, as amended (the "Securities Act"), and may not be offered or
sold, directly or indirectly, in the United States, absent registration or an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. No public offering of securities is being
made in the United States. This announcement does not and is not intended to
constitute an offer to the public in South Africa in terms of Chapter 4 of
the South African Companies Act, 2008 (as amended). Neither this announcement
nor any copy of it may be taken, transmitted or distributed, directly or
indirectly in or into the United States, Canada, Australia or Japan.
This announcement is for information purposes only and in member states of
the European Economic Area (other than the United Kingdom) is directed only
at persons who are qualified investors (as defined in article 2(1)(e) of EU
directive 2003/71/EC (the "Prospectus Directive") and the relevant
implementing rules and regulations adopted by each Member State). In the
United Kingdom, this announcement is directed only at the following persons:
investment professionals falling within article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order");
and high net worth entities, and other persons to whom it may lawfully be
communicated, falling within article 49(2)(a) to (d) of the Order.
This announcement has been issued by and is the sole responsibility of JD
Group. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by any of the Bookrunners or by any of their respective affiliates
or agents or advisers as to, or in relation to, the accuracy or completeness
of this announcement or any other written or oral information made available
to or publicly available to any interested party or its advisers, and any
liability therefore is expressly disclaimed.
This announcement does not purport to identify or suggest the risks (direct
or indirect) which may be associated with an investment in the securities.
Any investment decision to buy securities in the Offering must be made solely
on the basis of publicly available information which has not been
independently verified by the Bookrunners.
The Bookrunners are acting for JD Group, and no one else, in connection with
the Offering and will not be responsible to anyone other than JD Group for
providing the protections offered to clients of the Bookrunners, nor for
providing advice in relation to the Offering.
The Bookrunners may participate in the Offering on a proprietary basis.
Date: 12/06/2012 08:00:19 Supplied by www.sharenet.co.za
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