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Edcon launches bond offering
Edcon (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2007/003525/07)
Company code: BIEDC1
(“Issuer” or “Edcon”)
Johannesburg, South Africa —5 February 2013. Edcon Proprietary
Limited (“Edcon”) today launched an offering of €325 million
equivalent in aggregate principal amount of euro-denominated 9.5%
senior secured notes and U.S. dollar-denominated 9.5% senior secured
notes, each due 2018 (collectively, the “Notes”).
Edcon also announced the launch of a tender offer for up to €700
million aggregate principal amount of its €1,141,353,000 aggregate
principal amount of senior secured floating rate notes due 2014 (the
“2014 Notes”) held by persons not located or resident in the United
States.
The net proceeds from the offering of the Notes will be used, together
with part of the net proceeds from the sale of R8.8 billion aggregate
amount of receivables under our private label store card programme,
the proceeds from the termination of certain derivatives entered into
in connection with the 2014 Notes, and the estimated net proceeds from
the R4.12 billion rand-denominated senior secured term loan facility
that we intend to enter into pursuant to commitments we have received
from certain financial institutions, to finance the repurchase of the
2014 Notes pursuant to the Tender Offer.
The Notes are being offered only to qualified institutional buyers in
accordance with Rule 144A under the Securities Act and outside the
United States in accordance with Regulation S under the Securities
Act.
About Edcon
Edcon is the largest non-food retailer in South Africa, with a 27%
market share in the South African clothing and footwear market by
revenue in 2012. Edcon has been in operation for over 80 years,
successfully expanding its footprint to cover 1,173 stores under three
principal divisions and nine key store chains across southern Africa.
Edcon’s Edgars division, consisting of department stores targeted to
middle- to upper-income customers, includes store chains such as
Edgars, Edgars Active, Edgars Shoe Gallery, Boardmans, and Red Square,
and accounted for 52.5% of Edcon’s total retails sales in the last
twelve months ended 29 September 2012. Edcon’s Discount division,
which consists of discount stores selling value merchandise targeted
at lower- to middle-income customers, includes store chains such as
Jet, Legit, and Jet Mart, and accounted for 39.5% of Edcon’s total
retail sales in the last twelve months ended 29 September 2012. In
addition, Edcon is the leading retailer of stationary, books, and
magazines in South Africa under its CNA division, which accounted for
8.3% of Edcon’s total retail sales in the last twelve months ended 29
September 2012. Finally, 10.3% of Edcon’s total retail sales in the
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last twelve months ended 29 September 2012 derived from its sale of
mobile phones, related accessories and airtime across all Edcon
divisions. Edcon Holdings Ltd, Edcon’s ultimate parent company, is
controlled by certain funds advised by affiliates of Bain Capital and
certain co-investors.
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The offering of the Notes is being made by means of an offering
memorandum. This announcement does not constitute an offer to sell or
the solicitation of an offer to buy the Notes or any other security
and shall not constitute an offer, solicitation or sale in the United
States or in any jurisdiction in which, or to any persons to whom,
such offering, solicitation or sale would be unlawful.
The Notes have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), or any U.S.
state securities laws, and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act. Accordingly,
the Notes are being offered and sold in the United States only to
qualified institutional buyers in accordance with Rule 144A under the
Securities Act and outside the United States in accordance with
Regulation S under the Securities Act.
Promotion of the Notes in the United Kingdom is restricted by the
Financial Services and Markets Act 2000 (the "FSMA"), and accordingly,
the Notes are not being promoted to the general public in the United
Kingdom. This announcement is for distribution only to, and is only
directed at, persons who (i) have professional experience in matters
relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as
amended (the "Financial Promotion Order"), (ii) are persons falling
within Article 49(2)(a) to (d) (high net worth companies,
unincorporated associations, etc.) of the Financial Promotion Order,
or (iii) are persons to whom an invitation or inducement to engage in
investment activity within the meaning of section 21 of the FSMA in
connection with the issue or sale of any securities may otherwise
lawfully be communicated or caused to be communicated (all such
persons together being referred to as "relevant persons"). This
announcement is directed only at relevant persons and must not be
acted on or relied on by anyone who is not a relevant person.
The Tender Offer is not being made, and will not be made, directly or
indirectly in or into, or by the use of the mails of, or by any means
or instrumentality of interstate or foreign commerce of or of any
facilities of a national securities exchange of the United States. The
2014 Notes may not be tendered in the Tender Offer by any such use,
means, instrumentality or facility from or within the United States or
by persons located or resident in the United States. Any purported
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tender of 2014 Notes in the Tender Offer resulting directly or
indirectly from a violation of these restrictions will be invalid.
This announcement does not constitute an offer to purchase the 2014
Notes.
5 February 2013
Debt Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
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