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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').
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