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BEIGE HOLDINGS LIMITED - Odd lot and specific repurchase offers, consolidation of share capital, salient dates & update on claw-back offer

Release Date: 18/02/2015 16:51
Code(s): BEG     PDF:  
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Odd lot and specific repurchase offers,  consolidation of share capital, salient dates & update on claw-back offer

BEIGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/006871/06)
(“Beige” or “the Company”)
ISIN Code: ZAE000034161 Share Code: BEG


PROPOSED ODD-LOT AND SPECIFIC REPURCHASE OFFERS; PROPOSED CONSOLIDATION OF
ORDINARY SHARE CAPITAL, SALIENT DATES AND UPDATE ON PROPOSED CLAW-BACK
OFFER


1.   INTRODUCTION
     Shareholders are referred to the announcements released on SENS on
     28 May 2014, 20 June 2014, 2 July 2014 and 31 October 2014, which
     announcements detailed, inter alia:
     (i)    a proposed claw-back offer through which the Company will raise
            R60m at R0.02 per share (“the claw-back offer”);
     (ii)   a proposed odd lot offer to shareholders holding 5000 or less
            shares in the Company (“odd lot holders”) to repurchase such
            odd lot holders shares (“odd lot holdings”) for R0.03 per share
            (“odd lot offer”);
     (iii)  a proposed specific offer to shareholders holding from 5001 up
            to and including 10 000 ordinary shares (“specific offer
            holders”) in the Company to repurchase such specific offer
            holders shares (“specific offer holdings”) for R0.03 per share
            (“specific offer”); and
     (iv)   a consolidation of the ordinary share capital on a 10:1 basis
            (“the consolidation”),

     and are advised that a circular detailing, inter alia, the proposed
     odd-lot offer, specific offer and consolidation of the ordinary share
     capital and including resolutions to approve these corporate actions
     as well as a further increase in authorised share capital has been
     prepared and was posted to shareholders on 6 February 2015. The claw
     back circular will be finalised and posted separately as detailed in
     paragraph 7 below.

2.   THE CLAW-BACK OFFER
     As detailed in the reviewed results announcement dated 31 October 2014
     and the change statement released on SENS on 2 February 2015, the
     value of the previously announced claw-back offer has been increased
     from R30m to R60m and Lion Match has agreed to effectively
     "underwrite" the increased claw-back offer to its full value by
     subscribing for all of the 3 000 000 000 ordinary shares which will
     form the subject of the claw-back offer (“the claw-back shares”) for a
     subscription price of R0.02 per share (“subscription price”).

   2.1   Rationale for the Claw-back Offer
         As previously announced, the proceeds of the Claw-back Offer will
         be applied to re-finance the Group through the conversion of
         existing debt to equity.  Lion Match has already injected in
         excess of R60m into the Company in the form of a shareholder loan
         of R35.8m as at 30 June 2014, a loan relating to the R25 million
         plus interest due to Lion Match for the redemption of the
         preference shares which were to have been redeemed in May 2014
         (“the preference share loan”) and a further loan of R10m from the
         R100m facility made available to Beige post year-end.  The R60m
         subscription price will be settled through the capitalisation of
         the preference share loan and a portion of the shareholder loan,
         totally R60m.   The claw-back offer mechanism has been chosen as
         the means by which to recapitalise the Company in order to
         provide shareholders with an equal opportunity to participate in
         the recapitalisation.

  2.2   Changes to the Terms of the Claw-back Offer Pursuant to the
        Increase in Value and the Reduction in the Subscription Price
        As a result of the subscription price being reduced from R0.03 per
        share to R0.02 per share, the terms of the claw-back offer have been 
        amended.  Beige shareholders will now be granted the opportunity to 
        subscribe for the claw-back shares at the subscription price of R0.02 
        per share and in the ratio of 183.84365 claw-back shares for every 100 
        ordinary Beige shares held on a date to be determined (“the record date”)
        following the approval by the JSE of a circular to shareholders
        detailing the terms of the claw-back offer.  Following the
        closing of the claw-back offer, the subscriber will be paid the
        proceeds received from Beige shareholders who have “clawed-back”
        their pro-rata portion of the claw-back shares and will transfer
        such “clawed-back” portion to the shareholder concerned.

  2.3   Proposed Salient Dates in Respect of the Claw-back Offer
        The claw-back offer is expected to open on or about 7 April 2015
        and to close on or about 24 April 2015. These dates are, however,
        subject to a special resolution for the increase in authorised
        share capital being registered by CIPC by 16 March 2015.

3. THE ODD LOT OFFER AND THE SPECIFIC OFFER
  3.1   Details of the odd-lot Offer
        Odd lot holders will be given the opportunity to sell their odd
        lot holdings to Zizmax Investments (Pty) Ltd t/a Dudley Products
        (“Zizmax”), a wholly-owned subsidiary of Beige at an odd lot
        offer price of R0.03 per share.  Odd-lot holders who do not
        expressly elect to retain their Odd-lots will be deemed to have
        elected to sell their odd-lots to Zizmax.

  3.2   Details of the Specific Offer
        Specific offer holders will be given the opportunity to sell
        their specific offer holdings to Zizmax at a specific offer price
        of R0.03 per share.  Zizmax will only purchase the shares of
        those specific offer holders who have elected to accept the
        specific offer.

  3.3   Rationale for the Odd-lot Offer and Specific Offer
        As at 24 December 2014, approximately one third of Beige
        shareholders, or 418 out of 1 254 shareholders, collectively held
        0.12% or 1 972 shares of the 1 631 821 425 issued ordinary shares
        in the Company. The directors have resolved to propose the odd-
        lot offer and the specific offer in order to reduce the
        substantial administration costs associated with this number of
        small shareholders and to enable these odd-lot holders and
        specific offer holders to exit their shareholding in the Company
        in a cost-effective manner, without incurring transactions costs
        such as transfer fees, brokerage fees and securities transfer
        tax.

  3.4   Proposed Salient Dates in Respect of the Odd Lot Offer and the
        Specific Offer

                                                                  2015
        Circular posted to shareholders on            Friday, 6 February
        Voting last day to trade in order to be on
        the Beige register and eligible to vote at
        the general meeting                           Friday, 20 February
        Voting record date to be able to
        participate in and vote at the general
        meeting                                       Friday, 27 February
        Forms of proxy for the general meeting of
        shareholders to be received by the transfer
        secretaries by 10H00 on                       Wednesday, 4 March
        General meeting of shareholders held at
        10H00 on                                         Friday, 6 March
        Results of general meeting published on
        SENS on                                          Friday, 6 March
        Special resolution submitted to CIPC on          Friday, 6 March
        Odd lot offer and specific offer open at
        09h00:                                        Thursday, 30 April
        Last day to trade in Beige shares in order
        to be eligible to participate in the odd
        lot offer and the specific offer                   Friday, 8 May
        Shares trade “ex” the odd lot offer and the
        specific offer                                    Monday, 11 May
        Forms of election and surrender for the odd
        lot offer and the specific offer to be
        received by the transfer secretaries by
        12h00 on                                          Friday, 15 May
        Odd lot offer and the specific offer close
        at 12h00 on                                       Friday, 15 May
        Record date for the odd lot offer and the
        specific offer (to determine the
        shareholders entitled to participate in the
        odd lot offer) at the close of business on        Friday, 15 May
        Implementation of the odd lot offer and the
        specific offer takes effect at commencement
        of business on                                    Monday, 18 May
        Odd lot holders and specific offer holders
        with dematerialised shares have their
        accounts held at their CSDP or broker
        updated and credited with the cash amount,
        unless shareholders have elected to retain
        their odd lot holding, as the case may be,
        on                                                Monday, 18 May
        Cheques in respect of the sale of odd lot
        holdings by odd lot holders and specific
        offer holdings by specific offer holders
        with certificated shares posted, at the           Monday, 18 May
        risk of such odd lot holders and specific
        offer holders, on or about
        Results of odd lot offer released on SENS         Monday, 18 May
        Notes:
        1. These dates are subject to the special resolution for the
           increase in the authorised share capital being registered by
         CIPC by 16 March 2015 and the claw-back offer opening on
         7 April 2015. Any change in these dates will be announced on
         SENS.
        2. Shareholdings may not be dematerialised or rematerialised
           between Monday, 11 May 2015 and Friday, 15 May 2015.

4. INCREASE IN AUTHORISED SHARE CAPITAL AND CONSOLIDATION OF SHARE
   CAPITAL ON A 10:1 BASIS

  4.1   Rationale for the increase in authorised share capital
        As noted above, the Company intends proceeding with a claw-back
        offer to raise R60m, which monies will be applied to a re-
        financing strategy for the Group. In order to be able to proceed
        with the claw-back offer, the Company will need to increase its
        authorised share capital to enable the issue and allotment of the
        claw-back offer shares.  Shareholders will accordingly be
        requested to approve an increase in the authorised share capital
        from 3 500 000 000 ordinary shares to 10 000 000 000 ordinary
        shares.

  4.2   Rationale for the consolidation of the share capital on a 10:1
        basis
        Beige currently has 1 631 821 425 ordinary shares in issue. The
        board is proposing a 10:1 consolidation of the share capital as
        it is of the opinion that a consolidation will result in:
        -     Beige having a more stable share price; and
        -     a narrowing of the high percentage bid-offer spread, which,
              in turn, will make the share more attractive to potential
              investors.

  4.3   Proposed Salient Dates in Respect of the Consolidation of the
        Ordinary Share Capital

                                                                        2015
        Circular posted to shareholders on                Friday, 6 February
        Forms of proxy for the general meeting of         Wednesday, 4 March
        shareholders to be received by the
        transfer secretaries by 10H00 on
        General meeting of shareholders held at              Friday, 6 March
        10H00 on
        Results of general meeting published on              Friday, 6 March
        SENS on
        Special resolutions submitted to CIPC on             Friday, 6 March
        Special resolutions registered by CIPC no           Monday, 16 March
        later than:
        Publication of finalisation announcement              Friday, 15 May
        on SENS in respect of the consolidation:
        Last day to trade in existing Beige                   Friday, 22 May
        shares on the JSE prior to the
        consolidation:
        Trading in consolidated shares commences              Monday, 25 May
        under the new ISIN code: ZAE000189528
        commences on:
        Consolidation record date:                            Friday, 29 May
        Record date for the increase in                       Friday, 29 May
        authorised share capital at the close of
        business on:
        Dematerialised shareholders will have                 Monday, 1 June
        their accounts at their CSDP or broker
        updated on:
        Date of issue of new replacement share                Monday, 1 June
        certificates provided that old share
        certificates have been lodged by 12:00 on
        the Friday, 29 May 2015, on or about:
        (share certificates received after this
        date will be posted within 5 business
        days of receipt)
        Notes:
        1. These dates are subject to the special resolution for the
           increase in the authorised share capital being registered by
           CIPC by 16 March 2015 and the claw-back offer opening on
           7 April 2015. Any change in these dates will be announced on
           SENS.
        2. Shareholdings in pre-consolidated form may not be
           dematerialised or rematerialised after Friday, 22 May 2015.

5. FINANCIAL INFORMATION
   In accordance with paragraph 9.15(d) and (e) shareholders are advised
   that the Claw-back Offer will have the effect of increasing the
   share/stated capital of the Company by R60 000 000 (less the costs of
   the Claw-back Circular), and will result in a decrease in liabilities
   and preference loan liabilities by R60 000 000. There are no profits
   attributed to the subscription of R60 000 000. However, the interest
   charge on the shareholder loan (incurring interest at 2% above the
   prime rate) and preference loan (incurring interest at 8% above the
   prime rate) will no longer be incurred with effect from 1 January
   2015. The costs of the Claw-back Circular are expected to be set off
   against stated capital.

   The repurchase of ordinary shares pursuant to the odd lot offer and
   the specific offer will have no significant impact on Beige?s earnings
   per share, headline earnings per share, net asset value per share and
   net tangible asset value per share.  Cash and share/stated capital
   will reduce by approximately R60 000 respectively.

   The Company currently has 87 624 017 treasury shares. Following the
   implementation of the claw-back offer, the odd lot offer and the
   specific offer, it is expected that the number of treasury shares will
   reduce to 1 972 947 ordinary shares (before consolidation).    This is
   based on the assumption that:
  (i) the 87 624 017 existing treasury shares will be utilised for
      purposes of the claw-back offer (which will run prior to the
      implementation of the odd lot offer and the specific offer); and
 (ii) 463 393 shares being the subject of the odd lot offer and
      1 509 554 shares being the subject of the specific offer, are all
      repurchased by Zizmax and held as treasury shares (before
      consolidation).

6. NEW ISIN
   Assuming the consolidation is approved by shareholders, the Company?s
   ISIN will be changed to ZAE000189528 with effect from Monday, 25 May
   2015, being the expected commencement date for trading in Beige shares
   under the Company?s new consolidated share capital.

7. DOCUMENTATION
   A circular containing full details of the odd lot offer, the specific
   offer, the increase in authorised ordinary share capital and the
   consolidation of the ordinary share capital on a 10:1 basis and
   incorporating a notice of general meeting was posted to shareholders
   on 6 February 2015 and a general meeting at which the resolutions
   required to approve and/or ratify these transactions will be
   considered for approval will be held at 10:00 on Friday, 6 March 2015
   at the offices of The Lion Match Company (Pty) Ltd, 36 Essex Terrace,
   Westville, 3629, Durban.

   A circular containing full details of the claw-back offer is expected
   to be posted to shareholders in April 2015, following the registration
   by CIPC of a resolution required to increase the authorised share
   capital.

Johannesburg
18 February 2015

Designated Advisor
Arbor Capital Sponsors Proprietary Limited

Date: 18/02/2015 04:51:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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