Wrap Text
Posting of circular, notice of general meetings and scheme meetings
SYNERGY INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/032604/06)
JSE share code: SGA ISIN: ZAE000161550
JSE share code: SGB ISIN: ZAE000162293
(Approved as a REIT by the JSE)
(“Synergy” or “the company”)
POSTING OF CIRCULAR, NOTICES OF A COMBINED LINKED UNITHOLDERS GENERAL MEETING, AN “A” LINKED UNITHOLDERS SCHEME MEETING, A “B” LINKED
UNITHOLDERS SCHEME MEETING, A COMBINED ORDINARY SHAREHOLDERS GENERAL MEETING, AN “A” ORDINARY SHAREHOLDERS GENERAL MEETING AND A “B”
ORDINARY SHAREHOLDERS GENERAL MEETING
1. INTRODUCTION
Linked unitholders are advised that the company has on Wednesday, 20 May 2015 posted a circular to linked
unitholders (the “circular”) relating to:
- the conversion of the company’s current “A” linked unit capital structure to an “A” ordinary share structure by:
- the delinking of each Synergy “A” ordinary share from a Synergy “A” debenture;
- the cancellation of each “A” debenture and concomitant waiver, for no consideration, by the “A”
debenture holders of their right to be repaid the debt reflected in each “A” debenture or to receive any
other form of compensation;
- the capitalisation of the value allocated to each “A” debenture in the books of account of the company,
equating to the issue price of each “A” debenture, to Synergy’s stated capital account; and
- termination of the Debenture Trust Deed,
to be effected by way of a scheme of arrangement in terms of section 114 of the Companies Act, 71 of 2008 (the
“Companies Act”) which scheme is being proposed by the company between the company and its “A”
debenture holders (the ““A” debenture scheme”);
- the conversion of the company’s current “B” linked unit capital structure to a “B” ordinary share structure by:
- the delinking of each Synergy “B” ordinary share from a Synergy “B” debenture;
- the cancellation of each “B” debenture and concomitant waiver, for no consideration, by the “B”
debenture holders of their right to be repaid the debt reflected in each “B” debenture or to receive any
other form of compensation;
- the capitalisation of the value allocated to each “B” debenture in the books of account of the company,
equating to the issue price of each “B” debenture, to Synergy’s stated capital account; and
- termination of the Debenture Trust Deed,
to be effected by way of a scheme of arrangement in terms of section 114 of the Companies Act, which scheme
is being proposed by the company between the company and its “B” debenture holders (the ““B” debenture
scheme”);
- the amendment of Synergy’s Memorandum of Incorporation to enable the schemes;
- the amendment of Synergy’s Debenture Trust Deed to enable the schemes;
- the adoption of a new Memorandum of Incorporation; and
- the subsequent termination of Synergy’s Debenture Trust Deed,
(collectively the “transactions”).
The circular contains:
- a notice convening a combined linked unitholders general meeting, to be held at 10:00;
- a notice convening an “A” linked unitholders scheme meeting, to be held at the later of 10:15 or 5 minutes after
the completion of the combined linked unitholders general meeting;
- a notice convening a “B” linked unitholders scheme meeting, to be held at the later of 10:30 or 5 minutes after
the completion of the “A” linked unitholders scheme meeting;
- a notice convening a combined ordinary shareholders meeting, to be held at the later of 10:45 or 5 minutes after
the completion of the “B” linked unitholders scheme meeting;
- a notice convening an “A” ordinary shareholders general meeting to be held at the later of 11:00 or 5 minutes
after the completion of the combined ordinary shareholders general meeting; and
- a notice convening a “B” ordinary shareholders general meeting to be held at the later of 11:15 or 5 minutes after
the completion of the “A” ordinary shareholders general meeting,
on Monday, 22 June 2015 at the registered offices of the company at One-on-Ninth, corner Glenhove Road and Ninth
Street, Melrose Estate, 2196, for the purposes of considering and, if deemed fit, passing, with or without modification,
the resolutions required to approve the transactions, including the “A” debenture scheme and the “B” debenture scheme
(collectively the “schemes”).
The circular is also available in electronic format on the company’s website at www.synergyincomefund.com.
2. RATIONALE
In terms of the revised section 13 of the JSE Listings Requirements (which has been amended to cater for REIT
legislation) the total consolidated IFRS liabilities of a REIT may not exceed 60% of its total consolidated IFRS assets.
The liability constituted by a company’s issued debentures is (in terms of IFRS) required to be taken into account in the
calculation for the determination of such 60% threshold.
By converting its capital structure, Synergy will, by virtue of the cancellation of its issued debentures, further reduce the
ratio of its total consolidated liabilities to total consolidated assets from 80.08% to 41.78% (calculated as at the last
practicable date with reference to the company’s unaudited results for the six months ended 31 December 2014). This
will ensure that the company’s consolidated liabilities remain below the aforementioned 60% threshold requirement and
will also provide the company with greater flexibility to take on additional debt should the need arise, and thus allow
the company to pursue an acquisitive growth strategy whilst limiting potential shareholder dilution.
Additional benefits in converting the company’s current linked unit capital structure to an all share structure include:
- the alignment of the company’s capital structure with the internationally recognised all equity REIT capital
structures;
- simplifying the administration and accounting treatment of the company’s capital structure; and
- the removal of the cost structure associated with debentures.
3. CONDITIONS PRECEDENT TO THE “A” DEBENTURE SCHEME
The “A” debenture scheme will be subject to the following conditions precedent:
- the approval of the “A” debenture scheme by the requisite majority of “A” linked unitholders at the “A” linked
unitholders scheme meeting, as contemplated in section 115(2) of the Companies Act;
- to the extent required, the approval of the implementation of such resolution by the Court as contemplated in
section 115(3)(a) of the Companies Act;
- if applicable, the company not treating the aforesaid resolution as a nullity, as contemplated in section 115(5)(b)
of the Companies Act;
- the requisite majority of “A” and “B” linked unitholders collectively approving the relevant resolutions required
to authorise:
- the amendment of the Synergy Debenture Trust Deed;
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit; and
- the termination of the Debenture Trust Deed, without payment or other compensation to “A” debenture
holders or “B” debenture holders,
at the combined linked unitholders general meeting;
- the requisite majority of “A” linked unitholders approving the relevant resolutions required to authorise:
- the amendment of the Synergy Debenture Trust Deed;
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit; and
- the termination of the Debenture Trust Deed, without payment or other compensation to “A” debenture
holders,
at the “A” linked unitholders scheme meeting;
- the requisite majority of “A” and “B” ordinary shareholders collectively approving the relevant resolutions
required to authorise:
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit;
- the amendment of Synergy’s Memorandum of Incorporation; and
- the adoption of a new Memorandum of Incorporation,
at the combined ordinary shareholders general meeting;
- the requisite majority of “A” ordinary shareholders approving the relevant resolutions required to authorise:
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit;
- the amendment of Synergy’s Memorandum of Incorporation; and
- the adoption of a new Memorandum of Incorporation,
at the “A” ordinary shareholders general meeting;
- in respect of the adoption of the new Memorandum of Incorporation, no shareholder exercises its dissenting
shareholder appraisal rights in terms of section 164 of the Companies Act;
- the fulfilment (and/or waiver) of the conditions precedent to the “B” debenture scheme, save for any condition
precedent to the “B” debenture scheme in terms of which the conditions precedent to the “A” debenture scheme
are required to be fulfilled (and/or waived); and
- all applicable regulatory and statutory approvals are obtained.
The conditions precedent have been inserted in the company’s favour. If a condition precedent is capable of being
waived, the company may waive such condition, in its sole discretion, at any time prior to the fulfilment thereof.
4. CONDITIONS PRECEDENT TO THE “B” DEBENTURE SCHEME
The “B” debenture scheme will be subject to the following conditions precedent:
- the approval of the “B” debenture scheme by the requisite majority of “B” linked unitholders at the “B” linked
unitholders scheme meeting, as contemplated in section 115(2) of the Companies Act;
- to the extent required, the approval of the implementation of such resolution by the Court as contemplated in
section 115(3)(a) of the Companies Act;
- if applicable, the company not treating the aforesaid resolution as a nullity, as contemplated in section 115(5)(b)
of the Companies Act;
- the requisite majority of “A” and “B” linked unitholders collectively approving the relevant resolutions required
to authorise:
- the amendment of the Synergy Debenture Trust Deed;
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit; and
- the termination of the Debenture Trust Deed, without payment or other compensation to “A” debenture
holders or “B” debenture holders,
at the combined debenture holders general meeting;
- the requisite majority of “B” linked unitholders approving the relevant resolutions required to authorise:
- the amendment of the Synergy Debenture Trust Deed;
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit; and
- the termination of the Debenture Trust Deed, without payment or other compensation to “B” debenture
holders,
at the “B” linked unitholders scheme meeting;
- the requisite majority of “A” and “B” ordinary shareholders collectively approving the relevant resolutions
required to authorise:
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit;
- the amendment of Synergy’s Memorandum of Incorporation; and
- the adoption of a new Memorandum of Incorporation,
at the combined ordinary shareholders general meeting;
- the requisite majority of “B” ordinary shareholders approving the relevant resolutions required to authorise:
- the delinking of each of the company’s “A” ordinary shares from an “A” debenture so as to no longer
constitute an “A” linked unit;
- the delinking of each of the company’s “B” ordinary shares from a “B” debenture so as to no longer
constitute a “B” linked unit;
- the amendment of Synergy’ Memorandum of Incorporation; and
- the adoption of a new Memorandum of Incorporation,
at the “B” ordinary shareholders general meeting;
- in respect of the adoption of the new Memorandum of Incorporation, no shareholder exercises its dissenting
shareholder appraisal rights in terms of section 164 of the Companies Act;
- the fulfilment (and/or waiver) of the conditions precedent to the “A” debenture scheme, save for any condition
precedent to the “A” debenture scheme in terms of which the conditions precedent to the “B” debenture scheme
are required to be fulfilled (and/or waived); and
- all applicable regulatory and statutory approvals are obtained.
The conditions precedent have been inserted in the company’s favour. If a condition precedent is capable of being
waived, the company may waive such condition, in its sole discretion, at any time prior to the fulfilment thereof.
5. SECTION 114 REPORTS
The board has appointed Mazars Corporate Finance Proprietary Limited (the “independent expert”) as the independent
expert (which meets the requirements set out in section 114(2) of the Companies Act) to advise it on the proposed “A”
debenture scheme and the proposed “B” debenture scheme and to compile a report in terms of section 114 of the
Companies Act to the independent board concerning each of the schemes.
The independent expert has prepared reports to the board in compliance with section 114(3) of the Companies Act, each
of which report confirms that the “A” debenture scheme and the “B” debenture scheme are fair and reasonable to
Synergy’s debenture holders. The independent expert’s reports are included in the circular.
6. VIEWS OF THE BOARD
None of the directors have any conflict of interests in relation to the scheme and all directors are able to make impartial
decisions in relation to the schemes. Accordingly, all directors are considered to be “independent” (as defined under
Regulation 81 of the Takeover Regulations).
The board, having considered the terms and conditions of the schemes, is in favour of the schemes and the transactions
and recommends that linked unitholders vote in favour of the resolutions set out in the notices convening the linked
unitholders combined general meeting, the “A” linked unitholders scheme meeting, the “B” linked unitholders scheme
meeting, the combined ordinary shareholders general meeting, the “A” ordinary shareholders general meeting and the
“B” ordinary shareholders general meeting (collectively the “meetings”), to implement the schemes and the
transactions.
The directors of the company who hold linked units intend to vote in favour of the resolutions set out in the notices
convening the meetings, to implement the schemes and the transactions.
7. SALIENT DATES AND TIMES
The salient dates and times relating to the transactions are as set out below.
2015
Record date to receive circular (together with the notices convening the combined linked
unitholders general meeting, the “A” linked unitholders scheme meeting, the “B” linked
unitholders scheme meeting, the combined ordinary shareholders general meeting, the “A”
ordinary shareholders general meeting, and the “B” ordinary shareholders general meeting
(collectively referred to as the “meetings”)) Friday, 15 May
Circular (together with the notices convening the meetings) posted Wednesday, 20 May
Announcement relating to the issue of the circular (together with the notices convening the
meetings) released on SENS Wednesday, 20 May
Announcement relating to the issue of the circular (together with the notices convening the
meetings) published in the press Thursday, 21 May
Last day to trade in order to be eligible to vote at the meetings Friday, 5 June
Voting record date Friday, 12 June
Last day to lodge forms of proxy for the combined linked unitholders general meeting (by
10:00) Thursday, 18 June
Last day to lodge forms of proxy for the “A” linked unitholders scheme meeting (by 10:15) Thursday, 18 June
Last day to lodge forms of proxy for the “B” linked unitholders scheme meeting (by 10:30) Thursday, 18 June
Last day to lodge forms of proxy for the combined ordinary shareholders general meeting (by
10:45) Thursday, 18 June
Last day to lodge forms of proxy for the “A” ordinary shareholders general meeting (by 11:00) Thursday, 18 June
Last day to lodge forms of proxy for the “B” ordinary shareholders general meeting (by
11:15) Thursday, 18 June
Combined linked unitholders general meeting held at 10:00 Monday, 22 June
“A” linked unitholders scheme meeting held at the later of 10:15 or 5 minutes after the
completion of the combined linked unitholders general meeting Monday, 22 June
“B” linked unitholders scheme meeting held at the later of 10:30 or 5 minutes after the
completion of the “A” linked unitholders scheme meeting Monday, 22 June
Last day for Synergy shareholders to give notice of their objections to the adoption of the new
Memorandum of Incorporation by no later than 10:45 or 5 minutes after the completion of the
“B” linked unitholders scheme meeting, whichever is the later Monday, 22 June
Combined ordinary shareholders general meeting held at the later of 10:45 or 5 minutes after
the completion of the “B” linked unitholders general meeting Monday, 22 June
“A” ordinary shareholders general meeting held at the later of 11:00 or 5 minutes after the
completion of the combined ordinary shareholders general meeting Monday, 22 June
“B” ordinary shareholders general meeting held at the later of 11:15 or 5 minutes after the
completion of the “A” ordinary shareholders general meeting Monday, 22 June
Results of the meetings released on SENS Monday, 22 June
Special resolutions submitted to CIPC for filing Tuesday, 23 June
Results of the meetings published in the press Tuesday, 23 June
Last date on which “A” linked unitholders who voted against the “A” debenture scheme can
require the company to seek court approval in terms of section 115(3)(a) of the Companies
Act, if the “A” debenture scheme is approved by “A” linked unitholders at the “A” linked
unitholder scheme meeting but at least 15% of the votes exercised voted against the “A”
debenture scheme Monday, 29 June
Last date on which “B” linked unitholders who voted against the “B” debenture scheme can
require the company to seek court approval in terms of section 115(3)(a) of the Companies
Act, if the “B” debenture scheme is approved by “B” linked unitholders at the “B” linked unit
scheme meeting but at least 15% of the votes exercised voted against the “B” debenture
scheme Monday, 29 June
Last date for “A” linked unitholders who voted against the “A” debenture scheme to be granted
leave by a court to apply for a review of the“A” debenture scheme in terms of section
115(3)(b) of the Companies Act, if the “A” debenture scheme is approved by “A” linked
unitholders at the “A” linked unitholders scheme meeting Monday, 6 July
Last date for “B” linked unitholders who voted against the “B” debenture scheme to be
granted leave by a court to apply for a review of the“B” debenture scheme in terms of section
115(3)(b) of the Companies Act if the “B” debenture scheme is approved by “B” linked
unitholders at the “B” linked unitholders scheme meeting Monday, 6 July
If no linked unitholders exercise their rights in terms of section 115(3)(a) of section 115(3)(b)
of the Companies Act
Special resolutions expected to be registered by CIPC Wednesday, 8 July
Finalisation date expected to be Friday, 10 July
Finalisation date announcement expected to be released on SENS Friday, 10 July
Finalisation date announcement expected to be published in the press Monday, 13 July
Expected last day to trade in existing “A” linked units on the JSE prior to the delinking of the
“A” linked units and the capitalisation of the “A” debentures Friday, 17 July
Expected last day to trade in existing “B” linked units on the JSE prior to the delinking of the
“B” linked units and the capitalisation of the “B” debentures Friday, 17 July
Trading in delinked “A” ordinary shares of no par value under the new ISIN: ZAE000202883
and the existing code of “SGA” commences Monday, 20 July
Monday, 20 July
Trading in delinked “B” ordinary shares of no par value under the new ISIN: ZAE000202891
and the existing code of “SGB” commences
Expected suspension of listing of “A” linked units on the JSE Monday, 20 July
Expected suspension of listing of “B” linked units on the JSE Monday, 20 July
Expected scheme implementation record date for the delinking of the “A” linked units and the
capitalisation of the “A” debentures at the close of business Friday, 24 July
Expected scheme implementation record date for the delinking of the “B” linked units and the
capitalisation of the “B” debentures at the close of business Friday, 24 July
Expected scheme operative date Monday, 27 July
Expected date by which dematerialised “A” ordinary shareholders will have their accounts
updated at their CSDP or broker Monday, 27 July
Expected date by which dematerialised “B” ordinary shareholders will have their accounts
updated at their CSDP or broker Monday, 27 July
Expected date of issue of new replacement share certificates provided that the old “A” linked
unit certificates have been surrendered by 12:00 on Friday, 24 July 2015 (any certificated “A”
linked units surrendered after this date will be replaced within five business days after receipt
by the transfer secretaries) Monday, 27 July
Expected date of issue of new replacement share certificates provided that the old “B” linked
unit certificates have been surrendered by 12:00 on Friday, 24 July 2015 (any certificated “B”
linked units surrendered after this date will be replaced within five business days after receipt
by the transfer secretaries) Monday, 27 July
Expected termination of listing of “A” linked units (at the commencement of trade) Monday, 27 July
Expected termination of listing of “B” linked units (at the commencement of trade) Monday, 27 July
Notes:
1. All dates and times may be changed by the company. Any change will be published on SENS and in the South African press.
2. Linked unitholders should note that as transactions in Synergy linked units are settled in the electronic settlement system used by Strate,
settlement of trades takes place five business days after such trade. Therefore, unitholders who acquire Synergy linked units after Friday, 5
June 2015 will not be eligible to vote at the combined linked unitholders general meeting, the linked unitholders scheme meetings or the
shareholders general meetings.
3. All times given in this announcement are local times in South Africa.
4. If the combined linked unitholders general meeting, “A” linked unitholders scheme meeting, “B” linked unitholders scheme meeting,
combined ordinary shareholders general meeting, “A” ordinary shareholders general meeting and/or “B” ordinary shareholders general
meeting are adjourned or postponed, forms of proxy submitted for the initial combined linked unitholders general meeting, “A” linked
unitholders scheme meeting, “B” linked unitholders scheme meeting, combined ordinary shareholders general meeting, “A” ordinary
shareholders general meeting and/or “B” ordinary shareholders general meeting, as the case may be, will remain valid in respect of any
adjournment or postponement of the combined linked unitholders general meeting, “A” linked unitholders scheme meeting, “B” linked
unitholders scheme meeting, combined ordinary shareholders general meeting, “A” ordinary shareholders general meeting and/or “B”
ordinary shareholders general meeting, as the case may be.
5. No dematerialisation of linked unit certificates may take place after Friday, 17 July 2015.
20 May 2015
Corporate advisor and sponsor
Java Capital
Independent expert
Mazars Corporate Finance (Pty) Ltd
Legal advisor
DLA Cliffe Dekker Hofmeyr
Date: 20/05/2015 05:22:00 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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
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