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Section 151 of the Companies Act: Notice of meeting of creditors, other holders of voting interest and shareholders
Total Client Services Limited
Incorporated in the Republic of South Africa
(Registration number 1998/025018/06)
Share code: TCS ISIN: ZAE000116208
(“TCS” or “the Company”)
NOTICE OF A MEETING OF CREDITORS, OTHER HOLDERS OF A VOTING INTEREST AND
SHAREHOLDERS IN TERMS OF SECTION 151 OF THE COMPANIES ACT
Creditors, other holders of a voting interest and shareholders are advised that a proposed business rescue
plan ("Business Rescue Plan") has been published today, 2 May 2014.
Meeting of creditors and other holders of a voting interest
Creditors and other holders of a voting interest are accordingly hereby given notice that a meeting of
creditors and other holders of a voting interest in terms of Section 151 of the Companies Act, 2008 (71 of
2008) (“the Act”) will be held at 09:30, on Monday, 19 May 2014 at Fluxmans Attorneys, 30 Jellicoe Avenue,
Rosebank, Johannesburg for the purpose of considering the Business Rescue Plan.
The Board has determined that, in terms of section 62(3)(a), as read with section 59 of the Companies Act,
the record date for the purposes of determining which shareholders of the Company are entitled to
participate in and vote at the Meeting is Friday, 9 May 2014. Accordingly, the last day to trade in the
Company’s shares in order to be recorded in the Register to be entitled to vote was Wednesday, 30 April
2014.
In terms of Section 152 of the Act, the agenda for the meeting of creditors and other holders of a voting
interest will be as follows:
1. Explanation of the time lines relating to the Business Rescue process entered into by TCS.
2. An introduction to the proposed business rescue plan for consideration by creditors and
shareholders and a presentation on the salient terms and conditions of the Business Rescue Plan.
3. Confirmation of the business rescue practitioner’s belief that there remains a reasonable prospect of
the Company being rescued.
4. The consequences for shareholders and creditors if the Business Rescue Plan is accepted versus if
the plan is not accepted and the Company is placed in liquidation.
5. A presentation by the employees’ representatives if they wish to make such a presentation.
6. Discussions and the conducting of a vote on any motions:-
(i) To amend the proposed plan, in any manner moved and seconded by holders of creditors
voting interests which is satisfactory to the Business Rescue Practitioner;
(ii) For directions to the Business Rescue Practitioner to adjourn the meeting in order to revise
the Business Rescue Plan for further consideration;
7. Preliminary voting on the proposed Business Rescue Plan (as amended if applicable) provided the
meeting is not to be adjourned;
8. Results of the preliminary vote;
9. Report on whether the plan has or has not been adopted.
Meeting of shareholders
Shareholders are accordingly hereby given notice that a meeting of shareholders will be held on Monday,
19 May 2014 immediately after the meeting of creditors and other holders of a voting interest of the
Company at the registered office of Fluxmans Inc., situated at 30 Jellicoe Avenue, Rosebank, Johannesburg,
2196 in terms of the provisions of Section 152 (3)(c) of the Act for the purpose of considering the Business
Rescue Plan.
The agenda for the meeting of shareholders will be as follows:
1. Voting for the final approval of the Business Rescue Plan; and
2. Results of the vote.
Salient features of the Business Rescue Plan
1. Approval of the Business Rescue Plan
Creditors, other holders of a voting interest and shareholders will be required to vote and approve the
adoption of the Business Rescue Plan. The Business Rescue Plan shall only be deemed to have been
adopted by TCS once the requisite majority of creditors, other holders of a voting interest and
shareholders have voted in favour of the adoption of the Business Rescue Plan.
2. Raising of capital
Capital of R2 million will be provided to TCS by Slade Investments CC (Registration number:
1994/009720/23) (“Slade Investments CC”) via:
- the issuance of new shares in TCS; and
- the provisioning of a loan
on the terms and conditions detailed below.
2.1 Issue of new shares
R1 million will be raised via the issue of 100 million ordinary shares in TCS to Slade Investments CC at a
price of 1 cent per share.
2.2 Provisioning of a loan
2.2.1 A R1 million loan ("Term Loan") shall be provided by Slade Investments CC to TCS.
2.2.2 The Term Loan shall bear no interest for the initial 12 month period beginning on the date the
Business Rescue Plan is approved by the requisite majority of shareholders and creditors ("Initial
Period") and no capital repayments will be made during the Initial Period.
2.2.3 Once the Initial Period has concluded, Slade Investments CC shall have the option to convert the
Term Loan into ordinary shares in TCS at a conversion price of 1 cent per share.
2.2.4 Should Slade Investments CC elect not to exercise its option to convert the Term Loan, TCS shall
be obliged to repay the Term Loan over the ensuing 12 month period and the Term Loan shall
begin to bear interest at the Prime Rate of Interest.
3. Restructuring of existing amounts owing to Mvelaphanda Holdings Proprietary Limited
3.1 An amount of R35.77 million is currently due and payable to Mvelaphanda Holdings Proprietary
Limited ("Mvela") in terms of the preference shares issued to Mvela by TCS. Such amount due to
Mvela shall be restructured as follows:
3.1.1 R5 million shall be written off.
3.1.2 R5 million shall be converted into a senior loan ("Senior Loan") repayable over 36 months. The
Senior Loan shall bear interest at a fixed rate of 10%. Interest shall only begin to accrue and
capital repayments are only required to be made from 1 March 2015.
3.1.3 The balance of R25.77 million shall be converted into a loan to be subordinated in favour of all
other creditors ("Subordinated Loan").
3.1.4 The Subordinated Loan shall bear no interest for the Initial Period and no capital repayments
shall be made during the Initial Period.
3.1.5 Once the Initial Period has concluded, Mvela shall have the option to convert the Subordinated
Loan into ordinary shares in TCS at a conversion price of 1 cent per share.
3.1.6 Should Mvela elect not to exercise its option to convert the Subordinated Loan, the
Subordinated Loan shall begin to bear interest at the Prime Rate of Interest and TCS shall be
obliged to repay the Subordinated Loan over a 36 month period. The 36 month period over
which the Subordinated Loan must be repaid, shall only begin once the Senior Loan has been
fully repaid.
4. Restructuring of existing amounts owing to the South African Revenue Services
4.1 The South African Revenue Services ("SARS") is the second biggest creditor of TCS and the
Business Rescue Plan provides for interest and penalties owed to SARS to be written off and the
capital amount to be repaid over 24 months beginning on 1 January 2015.
A conditional tax clearance certificate shall be issued by SARS.
5. Remaining creditors
The remaining creditors of TCS shall be repaid in the ordinary course of business.
6. Restructure of operations
6.1 The head office lease agreement shall be renegotiated or terminated.
6.2 Certain staff members shall be retrenched.
Copies of the complete Business Rescue Plan may be obtained from the Company’s registered office,
situated at River Falls Office Park, Bushwillow Building, No. 3, Rose Avenue, Centurion, on the Company’s
website at www.tcsonline.co.za or from Mr Piers Marsden, the business rescue practitioner, who can be
contacted on (011) 728 7166/7. The Business Rescue Plan will be available until Monday, 19 May 2014.
Sandton
2 May 2014
Designated Adviser
Merchantec Capital
Legal Adviser
Fluxmans
Business Rescue Practitioner
Matuson & Associates
Date: 02/05/2014 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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