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Proposed Rights Offer And Cautionary Announcement
Gijima Group Limited
(previously Gijima AST Group Limited)
Registration number 1998/021790/06
Share code: GIJ
ISIN: ZAE000147443
(“Gijima” or "the Company")
PROPOSED RIGHTS OFFER AND CAUTIONARY ANNOUNCEMENT
1. Introduction
Gijima, a leading JSE-listed IT company, believes it is positioned for strong growth after a
challenging operational period. Employing more than 2,500 highly qualified, dedicated and
committed professionals, in more than 100 offices and service centres throughout
southern Africa, Gijima remains well positioned to add value to all its clients. Gijima is
positive about the growth of the company and has secured a number of new contracts and
extended current contracts.
The board of Gijima has resolved to raise R150 million, by way of a renounceable rights
offer to Gijima shareholders (the "Rights Offer"), in order to re-capitalise the Company, to
ensure compliance with all of the its funding covenants under the Securitisation and to
finance the working capital requirements of the Company.
GijimaAst Finance (Pty) Limited (“GijimaAst Finance”) issued debentures to Futuregrowth
Asset Management (Pty) Ltd and Investec Asset Management (Pty) Ltd (in their capacity as
agents for their respective investment clients) (the “Funders”) as part of the trade
receivables securitisation funding programme put in place by Gijima ("the Securitisation").
In terms of the Securitisation, GijimaAst Finance owes R255 million to the Funders.
Pursuant to the Securitisation, GijimaAst Finance is subject to a number of financial
covenants, including a minimum asset cover and gearing covenant. Following negotiations,
the Funders have conditionally agreed to provide temporary leniency in respect of non-
compliance by GijimaAst Finance with such covenants. One of the conditions for which
such leniency is to be granted is that sufficient equity capital must be raised by Gijima,
and funds made available by Gijima to GijimaAst Finance, to ensure that GijimaAst
Finance will meet the required minimum asset cover ratio and have sufficient funding
reserves to cater for unforeseen risks.
2. Rights offer
In terms of the Rights Offer Gijima will offer 3 000 000 000 shares (the “Rights Offer
Shares”) at a subscription price of R0.05 per Rights Offer Share, in the ratio of 309.80298
Rights Offer Shares for every 100 shares held by Gijima shareholders at the close of
business on the record date of the Rights Offer.
The proceeds from the Rights Offer will be used, inter alia, to recapitalise the Company,
to ensure compliance with all of the funding covenants under the Securitisation and to
finance the working capital requirements of the Company.
The Rights Offer is expected to be concluded within the current financial year.
3. Shareholder support
Shareholders, collectively holding or managing 70.2% of Gijima shares (“the Principal
Shareholders”), have undertaken to support the Rights Offer and have committed to vote
in favour of, or to recommend to their clients, as regards Allan Gray and Investec Asset
Management and further subject to certain exceptions, to vote in favour of, all of the
resolutions required to facilitate the implementation of the Rights Offer (refer to
paragraph 5 below).
The Principal Shareholders have undertaken to subscribe for, or as regards Allan Gray and
Investec Asset Management and further subject to certain exceptions to recommend to
their clients that they subscribe for, all of the Rights Offer Shares offered to them
pursuant to the Rights Offer, as follows:
Shareholder Number of rights % of rights offer Value of rights
offer shares shares offer shares (Rand
(million) million)
Guma Group1 1 094 36.5% 54.7
Allan Gray 713 23.8% 35.7
Investec Asset 300 10.0% 15.0
Management
Total 2 107 70.2%2 105.3
Note:
1. Guma Group represents the combined interests of Guma Tech (Pty) Ltd, Guma Support
(Pty) Ltd, Guma Investment Holdings (Pty) Ltd and Guma Tech Group (Pty) Ltd.
2. Total differs from individual percentages due to rounding differences
The undertakings by the Principal Shareholders are provided, inter alia, on the condition
that the Company is not placed under supervision for business rescue in accordance with
the Companies Act, 2008 or into provisional or final liquidation prior to the close of the
Rights Offer.
4. Underwriting
The balance of the Rights Offer Shares, not subscribed for by the Principal Shareholders,
will be underwritten on the following basis:
Underwriter Number of rights % of rights offer Value of rights
offer shares shares offer shares (Rand
(million) million)
Guma Group1 406 13.5% 20.3
Futuregrowth Asset 487 16.2% 24.4
Management
Total 893 29.7% 44.7
5. Rights Offer conditions precedent
The implementation of the Rights Offer is subject to the fulfilment of inter alia the
following conditions precedent:
- Gijima shareholders approving an increase in the authorised share capital of Gijima and
an amendment to the Memorandum of Incorporation of Gijima in order to give effect to
the increase in the authorised share capital including a conversion of the ordinary shares
from par value to no par value;
- Gijima shareholders approving the issue of new Gijima shares pursuant to the Rights
Offer;
- CIPC registration of the special resolutions as a condition precedent to the Rights Offer;
- the JSE approving the Rights Offer circular, incorporating revised listing particulars, to
be issued to Gijima shareholders;
- the JSE approving the listing of the letters of allocation and the listing of the Rights
Offer Shares; and
- Conclusion of a bridging finance facility agreement with Yebo Guma Investments (Pty) Ltd
pursuant to which the Company has access to a facility for working capital purposes in an
amount of not less than R50 million, which facility is available for draw down during the
period between 3 April 2013 and the closing date of Rights Offer.
6. Cautionary
The final terms, salient dates and pro forma financial effects of the Rights Offer are in the
process of being finalised and will be announced in due course. Gijima shareholders are
advised to exercise caution when dealing in their Gijima shares until a further
announcement is made.
Centurion
28 March 2013
Merchant bank and sponsor to Gijima
Rand Merchant Bank Limited (a division of FirstRand Bank Limited)
Legal adviser to Gijima
Webber Wentzel
Date: 28/03/2013 04:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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