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Voluntary announcement: Proposed corporate restructuring, special dividend and capital raise
Invicta Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/002182/06)
Ordinary Share code: IVT ISIN code: ZAE000029773
Preference Share code: IVTP ISIN: ZAE000173399
("Invicta" or "the Company")
VOLUNTARY ANNOUNCEMENT: PROPOSED CORPORATE RESTRUCTURING,
SPECIAL DIVIDEND AND CAPITAL RAISE
1. Introduction
1.1. Shareholders are advised that the board of directors of
Invicta (“the Board”) has in principle resolved to
pursue:
1.1.1. a corporate restructuring (“Corporate Restructuring”)
of Invicta and its subsidiaries (“Group”), which will
also include the restructuring of its black economic
empowerment (“BEE”) investors’ interests (“BEE
Restructuring”);
1.1.2. the payment of a special dividend of approximately
R1,5 billion before dividend tax which, as a
consequence of the BEE Restructuring, is expected to
be declared to ordinary shareholders of the Company
in advance of the proposed Capital Raise (as defined
hereunder) (“Special Dividend”); and
1.1.3. a capital raise in the form of an underwritten
renounceable rights offer to ordinary shareholders of
approximately R2 billion before costs (“Rights
Offer”) and further R500 million before costs by way
of a placement of additional cumulative, non- participating no par value preference shares
(“Preference Shares”) under the existing Preference
Share programme memorandum (“Existing Programme”)
(“Preference Share Placement”),
the Rights Offer and the Preference Share Placement
collectively hereinafter referred to as the “Capital
Raise”.
1.2. The terms and conditions of the Corporate Restructuring
(which includes the BEE Restructuring), the Special
Dividend and the Capital Raise are in the process of
finalisation and once finalised, a detailed announcement
will be made to shareholders.
2. Corporate Restructuring
2.1. The following corporate actions comprise the Corporate
Restructuring:
2.1.1. the restructure of Invicta Properties (Proprietary)
Limited (“Invicta Properties”) and establishment of
Invicta South Africa Holdings (Proprietary) Limited
(“Invicta SA”), Invicta Treasury Holdings
(Proprietary) Limited (“Invicta Treasury”), Bearing
Man Group (Proprietary) Limited (“BMG”) and Invicta
Finance (Proprietary) Limited (“Invicta Finance”) as
wholly owned subsidiaries (directly or indirectly) of
Invicta;
2.1.2. the transfer of certain of the Invicta Group assets
to the appropriate Group subsidiary companies
including Invicta SA, Invicta Treasury, Invicta
Properties, BMG, Humulani Marketing (Proprietary)
Limited (to be renamed Capital Equipment Group (Pty)
Limited (“CEG”)) (”Humulani Marketing”), Aptopart
(Pty) Limited (to be renamed Building Supply Group
(Pty) Limited (“BSG”)) and Invicta Finance; and
2.1.3. the BEE Restructuring which includes the purchase by
Invicta of the shares held by the trustees for the
time being of the Humulani Employee Investment Trust
(“HEIT”) and Theramanzi Investments (Proprietary)
Limited (“Theramanzi”) in Humulani Investments (Pty)
Limited (“Humulani Investments”), a subsidiary of
Invicta (“BEE Share Purchases”), and the subsequent
subscription for approximately 5% of the ordinary
shares as well as one voting preference share by HEIT
and 20% of the ordinary shares by Theramanzi (“BEE
Parties”) in Invicta SA (“BEE Subscription”);
2.2. The purpose of the Corporate Restructuring is inter alia
to:
2.2.1. establish a more simplified corporate and
organisational structure of the Group;
2.2.2. establish a centralised treasury function in the
Group to house the financial instruments of the Group
and increase the Group’s ability to borrow in the
market and advance interest-bearing loans to Group
companies;
2.2.3. establish and empower Invicta SA, which will hold all
of Invicta’s South African operational entities. The
BEE Restructuring is intended to facilitate the
investment by the BEE Parties on substantially
similar terms compared to each other and to those on
which they invested in Humulani Investments, limit
their exposure to South African operational entities
only and increase the liquidity of the HEIT’s
investment; and
2.2.4. position Invicta for a potential international
listing and corporate actions in the future.
3. Special Dividend
3.1. In order to enable the BEE Parties to participate in the
BEE Subscription forming part of the Corporate
Restructuring, it is expected that Humulani Investments
will declare a special dividend to its shareholders
which comprise the BEE Parties and Invicta (“Humulani
Dividend”).
3.2. As a result of the Humulani Dividend and the need to
restructure the Company's capital base, it is expected
that the Company will subsequently declare the Special
Dividend, in advance of the opening of the Rights Offer
which will present Invicta’s shareholders with the
opportunity to realise and/or restructure their
investment in the Company.
4. Capital Raise
4.1. The Board has in principle resolved to, subject to
further finalisation and the requisite shareholder
approval, pursue the Rights Offer on the following
indicative terms and conditions:
4.1.1. the Company will seek to raise approximately R2
billion by way of the Rights Offer to be proposed
during or about the month of February 2015 to ordinary
shareholders in proportion to their existing holdings;
4.1.2. the new ordinary shares which will be offered for
subscription under the proposed Rights Offer are
expected to be offered at a discount of between 15% to
20% to the Company’s volume weighted average trading
price of its ordinary shares and it is further
expected that the proposed Rights Offer will be fully
underwritten and/or committed; and
4.1.3. the final terms and conditions of the underwriting
undertaking(s), commitments and pricing of the Rights
Offer will be communicated to shareholders in due
course.
4.2. In addition to the proposed Rights Offer, the Board has
also in principle resolved to pursue the Preference
Share Placement which will require inter alia an
increase in the Company’s existing authorised Preference
Share capital and a reinstatement of the Board’s
authority to place further Preference Shares under the
Existing Programme.
4.3. The purpose of the Capital Raise is to:
4.3.1. strengthen the Company’s capital base by providing an
opportunity to existing shareholders and prospective
new shareholders to invest or participate in the
Rights Offer and/or the Preference Share Placement;
4.3.2. lower the Group’s cost of funding and simultaneously
expand the Company’s shareholder base;
4.3.3. provide the Company with sufficient available capital
to fund potential acquisitions that the Group is pursuing over the short term, which acquisitions are
both complementary and synergistic to the Group’s
current business operations; and
4.3.4. enable any surplus or unutilised cash to be utilised
in the interim to offset any short term liabilities or
obligations the Group may have, while providing a
strong basis for further expansion going forward from
both a balance sheet structure and a debt raising
capability.
5. Approvals required
5.1. In order to pursue the implementation of the Capital
Raise, certain approvals (including in terms of s41(3) of
the Companies Act, 2008) will be sought from:
5.1.1. ordinary shareholders in terms of section 60 of the
Companies Act, 2008 (“Section 60 Notice to ordinary
shareholders”); and
5.1.2. preference shareholders through the calling of a
special general meeting of preference shareholders
(“Notice of General Meeting to preference
shareholders”).
5.2. A further announcement will be made in due course
relating to the timing of the Section 60 Notice to
ordinary shareholders, the Notice of General Meeting to
preference shareholders and the related corporate
actions, including the finalised terms and conditions
attaching thereto.
Cape Town
10 November 2014
Corporate Advisor and Lead Transaction Sponsor: Bravura
Capital (Proprietary) Limited
Lead Independent Sponsor: Deloitte & Touche Sponsor Services
(Proprietary) Limited
Legal Advisors: Webber Wentzel
Tax Advisor: Edward Nathan Sonnenbergs Inc.
Date: 10/11/2014 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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