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Joint Firm Intention Announcement
Dorbyl Limited Naledi Foundry of Republic of
(Incorporated in the Republic South Africa Proprietary Limited
of South Africa) (Incorporated in the Republic
Registration Number: Registration Number:
1911/001510/06 2012/194053/07
Share Code: DLV (“Naledi Foundry” or “the
ISIN: ZAE000002184 Offeror”)
(“Company” or “Dorbyl”)
FIRM INTENTION BY NALEDI FOUNDRY OF REPUBLIC OF SOUTH AFRICA PROPRIETARY
LIMITED (“Naledi” or “the Offeror”) TO MAKE AN OFFER TO ALL DORBYL
SHAREHOLDERS EXCLUDING AFRICAN DUNE INVESTMENTS 311 (PROPRIETARY) LIMITED
(“African Dune”), TO ACQUIRE ALL THE SHARES IN THE ISSUED SHARE CAPITAL OF
DORBYL LIMITED (“Dorbyl”) EXLUDING SUCH SHARES HELD BY AFRICAN DUNE AND BY
NALEDI BY WAY OF THREE INDEPENDENT SCHEMES OF ARRANGEMENT (“Schemes”)
1. Introduction
1.1 The shareholders of Dorbyl are advised that the board of directors
of Dorbyl (“the Board” or “the Dorbyl Board”) received a firm
intention offer letter from the Offeror to make an offer to all
Dorbyl shareholders excluding African Dune, to acquire all of the
following shares in the issued share capital of Dorbyl excluding such
shares held by the Offeror and by African Dune by way of the Schemes
(“the Firm Intention Offer”), being the:
1.1.1 ordinary shares of no par value in the issued share capital of Dorbyl
(“Ordinary Shares”);
1.1.2 5% cumulative preference shares with a par value of R2.00 (two rand)
in the issued share capital of Dorbyl (“DLVP Preference Shares”); and
1.1.3 5.5% cumulative preference shares with a par value of R2.00 (two rand)
in the issued share capital of Dorbyl (“DLP1 Preference Shares”),
the above classes of shares will collectively be referred to
hereinafter as the “Scheme Shares”.
1.2 Of the current share capital of Dorbyl:
1.2.1 the Offeror holds 18 398 173 Ordinary Shares and African Dune holds
11 925 963 Ordinary Shares, collectively representing approximately
88% of the total issued Ordinary Shares;
1.2.2 the Offeror holds 157 757 DLVP Preference Shares, representing
approximately 21% of the total issued DLVP Preference Shares; and
1.2.3 the Offeror holds 1 204 893 DLP1 Preference Shares, representing
approximately 96% of the total issued DLP1 Preference Shares.
1.3 The purpose of this joint announcement (“Joint Announcement”), is to
advise shareholders of the terms and conditions relating to the Firm
Intention Offer received.
2. Rationale for the Firm Intention Offer
The rationale for the Firm Intention Offer is to provide an exit
mechanism for the last of the remaining shareholder minorities of
Dorbyl and to delist Dorbyl.
3. Mechanics of the Schemes
3.1 Each of the Schemes will constitute an “affected transaction” as
defined in section 117(c) of the Companies Act, 2008 (Act 71 of 2008),
as amended (“the Companies Act”) and will be regulated by the Companies
Act, the Companies Regulations, 2011 (“the Companies Regulations”) and
the Takeover Regulation Panel (“TRP”).
3.2 The Schemes will be implemented by way of three inter-conditional schemes
of arrangement in terms of section 114 of the Companies Act, one to each
class of shareholder, to be proposed by the Dorbyl Board, between Dorbyl
and its shareholders other than African Dune and Naledi.
3.3 The Firm Intention Offer is subject only to the fulfilment of the posting
conditions as set out below in paragraph 5 (“Posting Conditions”).
3.4 The Schemes will be subject only to the fulfilment of the scheme conditions
as set out below in paragraph 6 (“Scheme Conditions”).
3.5 Post the implementation of the Schemes, all 3 (three) classes of shares
will be delisted from the JSE Limited (“JSE”).
4. Firm Intention Offer
4.1 The Firm Intention Offer will be made on the basis that the Offeror will
acquire the Scheme Shares being:
4.1.1 all of the Ordinary Shares not already held by African Dune and Naledi,
collectively, for an acquisition consideration of R0.80 (eighty cents)
per Ordinary Share (“Ordinary Share Scheme”);
4.1.2 all of the DLVP Preference Shares not already held by Naledi for an
acquisition consideration of R1.50 (one rand and fifty cents) per DLVP
Preference Share (“DLVP Preference
Share Scheme”); and
4.1.3 all of the DLP1 Preference Shares not already held by Naledi for an
acquisition consideration of R1.60 (one rand and sixty cents) per DLP1
Preference Share (“DLP1 Preference Share Scheme”),
the above considerations will hereinafter be referred to as
“the Scheme Considerations”.
4.2 The aggregate Scheme Considerations payable by Naledi, amounts to
R3 815 718.80 (three million eight hundred and fifteen thousand
seven hundred and eighteen rand and eighty cents) comprising of:
4.2.1 R2 923 053.60 (two million nine hundred and twenty three thousand
and fifty three rand and sixty cents) in respect of the Ordinary
Share Scheme;
4.2.2 R820 494 (eight hundred and twenty thousand four hundred and ninety
four rand) in respect of the DLVP Preference Share Scheme; and
4.2.3 R72 171.20 (seventy two thousand one hundred and seventy one rand
and twenty cents) in respect of the DLP1 Preference Share Scheme.
4.3 In order to implement the Schemes, the Dorbyl Board is requested to
call the following general meetings (“Scheme Meetings”) of each class
of shareholders entitled to participate being:
4.3.1 a general meeting of Ordinary shareholders to consider and vote by
way of a special resolution to approve of the Ordinary Share Scheme;
4.3.2 a general meeting of the DLVP Preference shareholders to consider and
vote by way of a special resolution to approve of the DLVP Preference
Share Scheme; and
4.3.3 a general meeting of the DLP1 Preference shareholders to consider and
vote by way of a special resolution to DLP1 Preference Share Scheme,
the above resolutions hereinafter collectively referred to as
“the Scheme Resolutions”.
4.4 Once all the Posting Conditions and the Scheme Conditions have been
fulfilled and the Schemes are implemented, Dorbyl shareholders will
receive the Scheme Considerations insofar as it relates to them and
each class of Scheme Shares will be delisted from the JSE.
5. Posting Conditions
5.1 The posting of the circular in relation to the Schemes (“Circular”)
to Dorbyl shareholders is subject to the conditions that, by no later
than 4 April 2014:
5.1.1 the Dorbyl Board confirms in writing, by the counter signature and
return of a signed copy of the Firm Intention Offer letter to Naledi,
that it will co-operate with Naledi and will propose the Schemes to
Dorbyl shareholders in accordance with the terms and conditions of
the Firm Intention Offer letter; and
5.1.2 all requisite approvals having been received from the JSE, the TRP
and the Financial Surveillance Department of the South African Reserve
Bank for the posting of the Circular, to the extent required.
5.2 The Posting Conditions cannot be waived, although the time period within
which such conditions are to be fulfilled may be extended by the Offeror,
in its sole discretion, by notice to Dorbyl in writing.
6. Scheme Conditions
6.1 Each of the Schemes will be subject to (and will become operative on the
relevant operative date) upon the fulfilment of the following Scheme
Conditions on or before 31 May 2014:
6.1.1 the approval of each of the Schemes by the requisite majority of Dorbyl
shareholders by voting in favour of each of the Scheme Resolutions as
contemplated in section 115(2)(a) of the Companies Act, and: (a) to the
extent required, the approval of the implementation of such resolution
by a High Court in terms of section 115(2)(c) of the Companies Act;
and (b) if applicable, Dorbyl not treating the aforesaid resolution as
a nullity, as contemplated in section 115(5)(b) of the Companies Act;
6.1.2 in relation to any objections to either of the Schemes by each class of
Dorbyl shareholders:
6.1.2.1 no class of Dorbyl shareholders give notice objecting to their
applicable Schemes, as contemplated in section 164(3) of the
Companies Act and vote against either of the resolutions
proposed at their applicable Scheme Meeting to approve their
applicable Scheme; or
6.1.2.2 if a class of Dorbyl shareholders gives notice objecting to their
applicable Scheme, as contemplated in section 164(3) of the Companies
Act, and vote against the resolutions proposed at their applicable
Scheme Meeting, Dorbyl shareholders holding no more than 5% of all
of the applicable Scheme Shares eligible to be voted at the relevant
Scheme Meeting give such notice and vote against the resolutions
proposed at the relevant Scheme Meeting; or
6.1.2.3 if a class of Dorbyl shareholders holding more than 5% of the applicable
Scheme Shares eligible to be voted at the applicable Scheme Meeting
give such notice objecting to their applicable Scheme, as contemplated
in section 164(3) of the Companies Act, and vote against the resolutions
proposed at their applicable Scheme Meeting, the relevant Dorbyl shareholders
do not exercise their appraisal rights, by giving valid demands in terms
of sections 164(5) to 164(8) of the Companies Act within 30 business days
following their applicable Scheme Meeting, in respect of more than 5% of the
applicable Scheme Shares eligible to be voted at their said Scheme Meeting;
6.1.3 in respect of the implementation of the Schemes and only to the extent that same may be
applicable, the approval of the JSE, the TRP and any other relevant regulatory
authorities (either unconditionally or subject to conditions acceptable
to Dorbyl).
6.2 The Scheme Conditions set out in paragraphs 6.1.1 and 6.1.3 cannot be waived.
6.3 The Scheme Condition set out in paragraph 6.1.2 may be waived in respect of
each applicable Scheme by Naledi, upon written notice to Dorbyl, prior to the
date for fulfilment of the relevant Scheme Condition.
6.4 Naledi will be entitled to extend the date for the fulfilment of any of the Scheme
Conditions, by up to 60 days, in its own discretion, upon written notice to Dorbyl,
but shall not be entitled to extend the date to a date later than the aforesaid
60 day period without the prior written consent of Dorbyl.
7. Acting in concert and voting restrictions
7.1 As required by regulation 101(7)(a) of the Companies Regulations, Naledi is acting
in concert with African Dune insofar as it relates to this Firm Intention Offer
and the Schemes.
7.2 As a result of the Offeror and African Dune acting in concert, both parties will
be prohibited from voting on any of the Scheme Resolutions to be proposed and
voted on at the respective Scheme Meetings.
8. Voting requirements and irrevocable undertakings received
8.1 In terms of section 115(2) of the Companies Act, each of the Scheme Resolutions
must be adopted by Dorbyl shareholders entitled to vote at the respective Scheme
Meetings (excluding Naledi and African Dune in lieu of paragraph 7 above) by way
of a 75% (seventy five percent) majority vote in favour of each respective Scheme
Resolution, in order to give effect to the successful implementation of the Schemes.
8.2 Shareholders are advised that the Offeror has received irrevocable undertakings from
the following shareholders who have undertaken to vote in favour of the Schemes:
8.2.1 Ordinary Shareholders, collectively, holding 2 888 751 Ordinary Shares, which
represents 79.1% of total Ordinary Shares entitled to vote at the Ordinary
Shareholders Scheme Meeting;
8.2.2 DLVP Preference Shareholders, collectively, holding 459 406 DLVP Preference Shares,
which represents 84% of total DLVP Preference Shares entitled to vote at the DLVP
Preference Shareholders Scheme Meeting; and
8.2.3 DLP1 Preference Shareholders, collectively, holding 41 228 DLP1 Preference Shares,
which represents 91.4% of total DLP1 Preference Shares entitled to vote at the DLP1
Preference Shareholders Scheme Meeting.
9. Information on Naledi
9.1 Naledi is a private company and the controlling shareholder of Dorbyl.
9.2 The shareholders of Naledi comprise the Industrial Development Corporation of
Southern Africa Limited, the trustees for the time being of The Ginny Eunice
Maphatiane Trust, the trustees for the time being of The Mukovhe Share 2 Trust
and Mr. Sibusiso Maphatiane. Mr. Maphatiane is acting (under a stipulatio
alteri) as stipulator on behalf of (i) a trust named “The Dorbyl Employees Trust”
which has been established to hold shares in Naledi Foundry on behalf of management
and employees of Dorbyl from time to time, and (ii) a trust that will be established
on behalf of the surrounding communities where the Company operates.
10. Information on African Dune
10.1 African Dune is a privately owned investment holding company with various interests
in steel and steel related companies.
10.2 These companies operate predominantly in the galvanized wire, barbed wire, razor wire,
diamond mesh, netting, field fencing, tubing, nails and reinforcing steel industry.
11. Certainty of funds
The TRP has been given appropriate written confirmation by Siyaka Beja Inc, as contemplated
in regulation 111(4) and regulation 111(5) of the Companies Regulations, that the Offeror
has sufficient cash resources and/or facilities available to it to meet its cash commitments
to the Dorbyl shareholders in relation to the Firm Intention Offer.
12. Regulatory Issues
The Offeror is aware that certain regulatory bodies will require notification of the Firm
Intention Offer and will work together with the Dorbyl shareholders, Dorbyl and their
advisors to ensure that any standard regulatory approvals are achieved timeously, and that
all reasonably necessary actions required to secure such approvals (if any) are taken.
13. Amendment or variation of the Firm Intention Offer
No amendment or variation of the Firm Intention Offer shall be valid unless it is
agreed to by the Offeror in writing and approved by the TRP, provided that the Offeror
shall not agree to any amendment or variation that has the effect of reducing the Scheme
Considerations.
9. No set-off of Scheme Considerations
Settlement of the Scheme Considerations pursuant to the Firm Intention Offer
will be implemented in full in accordance with the terms of the Firm Intention
Offer without regard to any lien, right of set-off, counterclaim, deduction,
withholding or other analogous right to which the Offeror may otherwise be,
or claim to be, entitled against any shareholder.
10. Arrangements, Agreements and Undertakings
There are no arrangements, agreements or undertakings between the Offeror,
Dorbyl, any director of Dorbyl, any person who was a director of Dorbyl in
the previous 12 months, any shareholder of Dorbyl or any shareholder of
Dorbyl in the previous 12 months, that is material to the Firm Intention
Offer.
11. Opinions and Recommendations
11.1 As required in terms of the Companies Act and the Companies Regulations,
Dorbyl will constitute an independent board (“Dorbyl Independent Board”)
to assess the Schemes.
11.2 The Board will convene in due course to make the necessary appointments
to the Independent Board.
11.3 The Dorbyl Independent Board will appoint an independent expert to provide
the Dorbyl Independent Board with external advice in regard to the Firm
Intention Offer and to make appropriate recommendations to the Dorbyl
Independent Board for the benefit of shareholders.
11.4 The substance of the external advice and the views of the Dorbyl Independent
Board will be detailed in the Circular referred to above.
12. Directors’ Responsibility Statement
12.1 The directors of the Offeror, insofar as the information in this Joint Announcement
relates to the Offeror:
12.1.1 collectively, and individually, accept full responsibility for the accuracy
of the information given in this Joint Announcement;
12.1.2 certify that, to the best of their knowledge and belief, the information in
this Joint Announcement is true and correct;
and
12.1.3 certify that the Joint Announcement does not omit anything likely to affect
the importance of the information disclosed.
12.2 The Dorbyl Board, insofar as the information in this Joint Announcement relates
to Dorbyl:
12.2.1 collectively, and individually, accept full responsibility for the accuracy
of the information given in this Joint Announcement;
12.2.2 certify that, to the best of their knowledge and belief, the information in
this Joint Announcement is true and correct;
and
12.2.3 certify that the Joint Announcement does not omit anything likely to affect
the importance of the information disclosed.
13. Circular
It is anticipated that the posting of the Circular to shareholders shall take place
on or before 4 April 2014, if not sooner.
14. Costs
The Offeror will carry all of the costs associated with the successful implementation
of the Firm Intention Offer (including the Schemes).
15. Governing Law
The Firm Intention Offer and the Schemes will be governed by and construed in accordance
with the laws of South Africa and shall be subject to the exclusive jurisdiction of
the South African courts.
By order of the Board
Johannesburg
14 March 2014
PSG Capital Proprietary Limited
Transaction Advisor and Sponsor to Dorbyl
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