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Financial effects of loan, issue of debentures, share options, specific issue and withdrawal of cautionary announcem
RBA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/009701/06)
(JSE code: RBA ISIN: ZAE000104154)
(“RBA” or “the company”)
FINANCIAL EFFECTS OF LOAN, ISSUE OF DEBENTURES, SHARE OPTIONS, SPECIFIC
ISSUE AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
1.1. Shareholders are referred to the announcement released on 7 March 2014, that the
company had decided to raise R16.2 million by means of a loan, the issuing of 135
million debentures at 12 cents each, and the granting of options to subscribe for 135
million shares at 12 cents each to related parties.
1.2. On 26 June 2014 it was announced that an additional investor had undertaken to
provide an additional R15 million by means of an additional loan, the subscription for
125 million additional debentures at 12 cents each and options to subscribe for an
additional 125 million shares at 12 cents each to a non-related party.
1.3. The combined effect of the aforegoing is that the subscribers will subscribe in cash for
260 million debentures for an aggregate price of R31.2 (thirty one million two hundred
thousand Rand). RBA will grant share options to subscribe for 260 million ordinary
shares in RBA at 12 cents per share. The issue price was determined by the Board on
7 March 2014, being the date that the Board of RBA approved the transaction with the
related parties.
1.4. The financial effects of the aforegoing are set out below.
2. Financial effects
2.1. The pro forma financial effects have been prepared for the purposes of illustrating how
the loan, issuing of debentures, granting of the share options and specific issue would
have affected the financial position of RBA for the historical financial period indicated.
Accordingly, such effects may not necessarily fairly represent the financial effects of
the loan, issuing of debentures, granting of the share options and specific issue on
RBA’s financial position.
2.2. The pro forma financial effects have been compiled using accounting policies that
comply with IFRS and that are consistent with those applied in the audited consolidated
financial statements of RBA for the year ended 31 December 2013. The pro forma
figures have been given no greater prominence than unadjusted financial figures, and
represented in a manner consistent with both the format and accounting policies
adopted in the historical financial information and adjustments have been quantified on
the same basis as would normally be calculated in preparing financial statements.
2.3. The directors are responsible for the preparation of the pro forma financial effects. The
detailed pro forma financial statements and the independent reporting accountants’
report on the pro forma financial statements will be included in the circular.
2.4. The table below sets out the pro forma financial effects of the loan by the related parties
to RBA on RBA:
After the
Before (1) The loan loan Change
Earnings per share (cents) (2)(5) (6.43) (0.44) (6.87) (7)%
Headline earnings per share (cents) (6.90) (0.44) (7.34) (6)%
(2)(5)
Net asset value per share (3)(4) 6.43 (0.06) 6.37 (1)%
Net tangible asset value per share
(3)(4) 6.43 (0.06) 6.37 (1)%
Number of RBA ordinary shares in
issue 599 182 577 - 599 182 577 -
Weighted average number of ordinary
shares in issue (2) 523 713 423 - 523 713 423 -
Notes
(1) The “Before” column is based on RBA’s published audited financial statements for the
year ended 31 December 2013.
(2) The earnings and headline earnings per share were calculated as if the loan was made
on 1 January 2013.
(3) The net asset value and net tangible asset per share were calculated as if the loan was
made on 31 December 2013.
(4) The “After the loan” column for net asset value and net tangible asset value per
sharehas been adjusted for:
- the loan of R31.2 million;
- cash received of R31.2 million;
- transaction costs of R475 838.
(5) The “After the loan” column earnings per share and headline earnings per share have
been adjusted for:
- the after tax interest paid at 8,1% per annum to Riskowitz, Protea and Midbrook
Lane, which is 90% of prime interest rate and 9.25% to Hillside which is prime
interest rate per the legal agreement;
- transaction costs of R475 838.
(6) The adjustments are expected to have a continuing effect.
2.5. The table below sets out the pro forma financial effects of the issuing of the debentures
and granting of the share options on RBA:
Debentures
After the Change
Before (1) and share
debentures %
options
and share
options
Earnings per share (cents) (2)(5) (6.43) (0.59) (7.02) (9)%
Headline earnings per share (cents)
(2)(5) (6.90) (0.59) (7.49) (9)%
Diluted earnings per share (cents)
(2)(5)(6) (6.43) 2.09 (4.34) 32%
Diluted headline earnings per share (6.90) 2.24 (4.66) 33%
(cents) (2)(5)(6)
Net asset value per share (2)(4) 6.43 0.32 6.75 5%
Net tangible asset value per share
(2)(4) 6.43 0.32 6.75 5%
Number of RBA ordinary shares in
issue 599 182 577 - 599 182 577 -
Weighted average number of ordinary
shares in issue 523 713 423 - 523 713 423 -
Notes
(1) The “Before” column is based on RBA’s published audited financial statements for the
year ended 31 December 2013.
(2) The earnings and headline earnings per share were calculated as if the debentures
were issued and the share options granted on 1 January 2013.
(3) The net asset value and net tangible asset per share were calculated as if the
debentures were issued and the share options granted on 31 December 2013.
(4) The “After the debentures & share options” column on net asset value and net tangible
asset per share has been adjusted for:
- 260 000 000 debentures issued at 12 cents per share;
- the share options granted to subscribe for 260 000 000 ordinary shares in RBA
at 12 cents per share, which equates to a 32% premium to the 30 day VWAP
calculated on 7 March 2014, being the date that the Board of RBA approved the
transaction with the related parties;
- a share option reserve on the convertible debenture of R2.2 million, which has
been calculated using a market related interest rate of 11,25% to determine the
fair value of the convertible debenture instrument;
- transaction costs of R475 838.
(5) The “After the debentures & share options” column earnings per share and headline
earnings per share have been adjusted for:
- the after tax interest paid at 8,1% per annum to Riskowitz, Protea and
Midbrook Lane, which is 90% of prime interest rate and 9.25% to Hillside
which is prime interest rate per the legal agreement;
- transaction costs of R475 838.
(6) The “After the debentures & share options” column earnings per share and headline
earnings per share have been adjusted for the effect of 260 000 000 dilutive share
options in issue from 1 January 2013.
(7) The adjustments are expected to have a continuing effect.
2.6. The table below sets out the pro forma financial effects of the exercise of the share
options and the specific issue of the option shares for cash on RBA:
Before (1) Specific After the Change
issue of specific %
shares issue of
shares
Earnings per share (cents) (2)(3) (6.43) 2.09 (4.34) 33%
Headline earnings per share (cents)
(2) (6.90) 2.25 (4.65) 33%
Net asset value per share (3)(4) 6.43 1.65 8.08 26%
Net tangible asset value per share 6.43 1.65 8.08 26%
(3)(4)
Number of RBA ordinary shares in 599 182 577 260 000 000 859 182 577 -
issue
Weighted average number of 523 713 423 260 000 000 783 713 423 -
ordinary shares in issue
Notes
(1) The “Before” column is based on RBA’s published audited financial statements for the
year ended 31 December 2013.
(2) The earnings and headline earnings per share were calculated as if the specific issue
took place on 1 January 2013.
(3) The net asset value and net tangible asset per share were calculated as if the specific
issue of shares took place on 31 December 2013.
(4) The “After the Specific issue of shares” on net asset value and net tangible asset per
share has been adjusted for:
- 260 000 000 shares to be issued at 12 cents per share, which equates to a
32% premium to the 30 day VWAP calculated on 7 March 2014, being the date
the Board of RBA approved the transaction with the related parties;
- transaction costs of R475 838.
(5) The “After the Specific issue of shares” column earnings per share and headline
earnings per share have been adjusted for transaction costs of R475 838.
(6) The adjustments are expected to have a continuing effect.
3. Loan conditions fulfilled
The conditions precedent in respect of the R16.2 million loan have been fulfilled and the
company has received the loan amount.
4. Withdrawal of cautionary announcement
Shareholders are advised that it is no longer necessary to exercise caution when dealing in
the company’s securities.
Johannesburg
28 August 2014
Designated and Corporate Adviser
Exchange Sponsors
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