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Erbacon Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2007/014490/06)
Share code: ERB
ISIN: ZAE000111571
(Erbacon or the Company)
DECLARATION ANNOUNCEMENT IN RESPECT OF THE RIGHTS OFFER IN
PURSUANCE OF THE DEBT RESTRUCTURING PLAN
1. Introduction
1.1 Shareholders are referred to the SENS announcements dated 27
March 2012, 4 May 2012, 16 May 2012, 17 May 2012,1 June 2012,
and 29 June 2012 wherein shareholders were advised of a
recapitalisation plan consisting of, inter alia:
1.1.1 the conversion of the outstanding loans due to certain
loan providers (Loan Providers) (Conversion of the Loan
Accounts);
1.1.2 the conversion of the preference shares into ordinary
shares in Erbacon; and
1.1.3 a specific issue of shares to certain members of
management after having advanced loan funding to the
Company and participating in the Conversion of the Loan
Accounts.
(all of the above hereinafter referred to as the Debt
Restructuring Plan)
2. Conversion of the Loan Accounts
2.1 As communicated to shareholders, the Conversion of the Loan
Accounts will be implemented by way of a rights offer (Rights
Offer) in terms whereof, inter alia, the Loan Providers will
set off the total outstanding loan amount, together with all
accrued interest thereon, against the subscription price
payable by the Loan Providers in terms of the Rights Offer.
2.2 All shareholders of the Company will be entitled to
participate in the Rights Offer on the same basis as the Loan
Providers. To the extent that any of the Loan Providers are
not shareholders and therefore are not entitled to receive
rights in terms of the Rights Offer, the remaining Loan
Providers who are shareholders will renounce such Rights Offer
rights not taken up by them to such non-shareholder Loan
Providers in order to allow such non- shareholder Loan
Providers to convert their portion of the loan accounts into
ordinary shares.
3. Registration of Special Resolutions
Shareholders are advised that Erbacon received confirmation that
the Special Resolutions required to implement the Debt
Restructuring Plan were successfully registered by the Companies
and Intellectual Property Commission.
4. Salient features of the Rights Offer
4.1 Further to the above, shareholders are advised that the
Company will be proposing a Rights Offer in terms of which
390 240 594 new Ordinary Shares of no par value (Rights Offer
Shares) will be offered to Shareholders, at a subscription
price of R0.40 per Rights Offer Share, in the ratio of 2
Rights Offer Shares for every 1 ordinary share held on the
record date of the Rights Offer.
4.2 The subscription price represents a discount of 23.1% to the
30 day VWAP as at 26 March 2012, being the day preceding the
date the Debt Restructuring Plan was first announced on SENS,
and a discount of 9.1% to the 30 day VWAP as at 31 May 2012,
being the day preceding the date the specific details of the
Debt Restructuring Plan was announced on SENS.
4.3 The Rights Offer will not include the right for shareholders to
apply for excess shares.
5. Salient Dates And Times
The salient dates and times of the Rights Offer are as follows:
Finalisation announcement to be Friday, 20 July 2012
released on SENS
Last day to trade in Erbacon Shares in Friday, 27 July 2012
order to settle trades by the Record
Date for the Rights Offer and to
qualify to participate in the Rights
Offer (cum entitlement) on
Erbacon Shares commence trading ex- Monday, 30 July 2012
rights on the JSE at 09:00 on
Listing of and trading in the Letters Monday, 30 July 2012
of Allocation on the JSE under the JSE
code ERBN and ISN ZAE000169017 at 09:00
on
Record Date for purposes of determining Friday, 3 August 2012
the Erbacon Shareholders entitled to
participate in the Rights Offer at the
close of business on
Circular and, where applicable, Form of Monday, 6 August 2012
Instruction posted to Shareholders on
Rights Offer opens at 09:00 on Monday, 6 August 2012
Holders of dematerialised Erbacon Monday, 6 August 2012
Shares will have their accounts at
their CSDP or broker automatically
credited with their Letters of
Allocation on
Holders of certificated Erbacon Shares Monday, 6 August 2012
will have their Letters of Allocation
credited to an electronic register at
the Transfer Secretaries on
Last day to trade in Letters of Friday, 17 August 2012
Allocation in order to settle trades by
the Record Date for the Rights Offer
and participate in the Rights Offer at
the close of business on
Listing and trading of Rights Offer Monday, 20 August 2012
Shares commences on the JSE at 09:00 on
Last day for Form of Instruction to be Friday, 24 August 2012
lodged with the Transfer Secretaries by
holders of certificated Erbacon Shares
wishing to sell all or part of their
entitlement by 12:00 on
Rights Offer closes at 12:00 and Friday, 24 August 2012
payment to be made and Form of
Instruction lodged by holders of
certificated Erbacon Shares with the
Transfer Secretaries by that time on
(see note 2)
Record Date for Letters of Allocation Friday, 24 August 2012
at 12:00 on
CSDP/broker accounts credited with Monday, 27 August 2012
Rights Offer Shares and debited with
any payments due in respect of holders
of dematerialised Rights Offer Shares
on
Rights Offer Shares certificates in Monday, 27 August 2012
terms of the Rights Offer posted to
holders of certificated Rights Offer
Shares on or about
Results of Rights Offer announced on Monday, 27 August 2012
SENS on
Notes:
1. All times referred to in the announcement are local times
in South Africa.
2. Holders of dematerialised Erbacon Shares are required to
notify their CSDP or broker of the action they wish to
take in respect of the Rights Offer in the manner and by
the time stipulated in the agreement governing the
relationship between the Erbacon Shareholder and his CSDP
or broker.
3. Erbacon Share certificates may not be dematerialised or
rematerialised between Monday, 30 July 2012, and Friday, 3
August 2012, both days inclusive.
4. CSDPs effect payment in respect of holders of
dematerialised Rights Offer Shares on a delivery versus
payment basis.
5. To the extent that the rights are accepted, Dematerialised
Shareholders will have their accounts at their CSDP
automatically credited with their rights and Certificated
Shareholders will have their rights credited to an account
at Computershare.
6. Pro Forma Financial Effects Of The Debt Restructuring Plan
(Incorporating The Rights Offer)
6.1 The unaudited pro forma financial effects of the Debt
Restructuring Plan incorporating the Rights Offer, as set out
in the table below, are the responsibility of the Directors
and have been prepared for illustrative purposes to reflect
how the Debt Restructuring Plan may have affected Erbacons
results for the year ended 29 February 2012, based on the
assumptions that:
6.1.1 Erbacons results for the year ended 29 February 2012 were
adjusted to take into account the effect of the additional
loans that were advanced by certain of the Loan Providers
post year end to meet funding requirements;
6.1.2 for the purpose of calculating earnings per Share and
headline earnings per Share, the Debt Restructuring Plan
incorporating the Rights Offer was effected on 1 March
2011; and
6.1.3 for the purpose of calculating net asset value and net
tangible asset value per Share, the Debt Restructuring
Plan incorporating the Rights Offer was effected on 29
February 2012.
6.2 Taking the above factors into consideration and because of
their nature, the unaudited pro forma financial effects may
not fairly reflect Erbacons financial performance and
position post the implementation of the Debt Restructuring
Plan.
Before Pro forma Pro forma Change
restated after Debt
(incorporating Restructuring
Management and Plan
Shareholder (incorporating
loans) the Rights
Offer)
Basic and diluted (92.35) (92.92) (26.66) 71%
loss per Share
(cents)
Headline and (70.81) (71.39) (21.29) 70%
diluted headline
loss per Share
(cents)
Net asset value per 49.08 49.08 37.49 (24%)
Share (cents)
Net tangible asset (17.69) (17.69) 20.86 n/m
value per Share
(cents)
Weighted number of 193.8 193.8 777.9 301.3%
Shares in issue
(millions)
Number of Shares in 193.8 193.8 777.9 301.3%
issue (millions)
Note: Due to the interrelated nature of all of the corporate
actions forming part of the Debt Restructuring Plan (which
includes the Rights Offer), the pro forma financial information
has been prepared taking into account the pro forma financial
effect of all the corporate actions forming part of the Debt
Restructuring Circular (which includes the Rights Offer). The
standalone effects of the Rights Offer will be provided in the
Rights Offer Circular.
7. Documentation
A circular containing full details of the Rights Offer will be
posted to shareholders on 6 August 2012 (the circular).
8. Jurisdiction
The distribution of the circular and/or accompanying documents
and/or the transfer of the new Erbacon shares and/or the rights
to subscribe for new Erbacon shares in jurisdictions other than
South Africa may be restricted by law and failure to comply with
any of those restrictions may constitute a violation of the laws
of any such jurisdiction in which it is illegal to make such a
Rights Offer. In such circumstances, the circular will not be
addressed to such shareholders and the Rights Offer will be made
only to qualifying shareholders.
Midrand
13 July 2012
Designated Advisor: PSG Capital Proprietary Limited
Date: 13/07/2012 03:00:00 Supplied by www.sharenet.co.za
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