Wrap Text
Rights offer and EGM
ADvTECH Limited
(Incorporated in the Republic of South Africa)
(Registration number 1990/001119/06)
Share Code: ADH
ISIN: ZAE000031035
("ADvTECH" or the "Company")
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN OR ANY OTHER JURISDICTION IN RESPECT OF WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE,
DIRECTLY OR INDIRECTLY, OF THIS ANNOUNCEMENT WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION OR IN RESPECT OF WHICH THE OFFERING CONTEMPLATED BY THIS ANNOUNCEMENT IS UNLAWFUL. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE, OTHERWISE
ACQUIRE, SUBSCRIBE FOR, SELL, OTHERWISE DISPOSE OF OR PURCHASE ANY SECURITY IN ANY JURISDICTION.
ANNOUNCEMENT REGARDING:
- A PROPOSED RIGHTS ISSUE;
- THE DISTRIBUTION OF A CIRCULAR; AND
- A NOTICE OF AN EXTRAORDINARY GENERAL MEETING
1. INTRODUCTION
ADvTECH shareholders are referred to the announcement released on the Stock Exchange News Service
("SENS") on 24 August 2015 relating to the ADvTECH Group's (the "Group") interim results for the six months
ended 30 June 2015, in which shareholders were advised that the board of directors of ADvTECH ("Board") was
considering the optimal capital structure for the ADvTECH Group and formulating a financing strategy that would
allow the Group to support an accelerated growth strategy in the most efficient manner.
The Board hereby advises of its intention to undertake a renounceable rights offer to its shareholders ("rights
offer") to raise up to ZAR850 million. The terms of the rights offer have not been finalised and announcements
will be released on SENS and published in the South African press in due course setting out the terms of the
rights, including the rights offer price, the final number of ADvTECH ordinary shares being offered and the ratio
of entitlement.
To implement the rights offer, the Company is required to obtain shareholder approval to increase its authorised
but unissued share capital and to place sufficient unissued shares under the control of the Board to undertake
the rights offer.
2. RATIONALE FOR THE RIGHTS OFFER
Central to the Board's strategy are the sustained and consistent growth of operations both locally and in sub-
Saharan Africa and development of the present project pipeline. The acquisition of the Gaborone International
School in Botswana concluded earlier this year signalled the Company's intent to pursue growth opportunities
outside South Africa, while implementation of the acquisitions of the Centurus and Maravest Schools groups
alongside organic growth initiatives have materially increased ADvTECH's schools footprint within the country.
The Tertiary division has resumed an accelerating growth strategy and is developing new organic and acquisitive
investment opportunities in this sector.
As a result of ADvTECH's standard working capital cycle and seasonal cash variations, ADvTECH's borrowings are
expected to increase from ZAR1.7 billion to ca. ZAR1.9 billion by calendar year end, assuming the addition of no
new projects beyond the previously announced ZAR3.0 billion rolling capital expansion programme ("the
announced programme").
Current ADvTECH Group debt facilities total ca. ZAR1.8 billion consisting of a Bridge Facility, a Revolving Credit
Facility ("RCF") and an Overdraft Facility.
- The ZAR350 million RCF has been fully drawn to fund capital work in progress.
- The RCF is complemented by an overdraft facility with a current limit of ZAR122 million.
- The Bridge Facility of ZAR1 350 million has been fully utilised for capital expenditure and recent
acquisitions.
Covenants in place allow for indebtedness of ZAR1.9 billion, leaving limited headroom to pursue incremental
growth opportunities above and beyond the announced programme. At present management has identified
near-term organic and acquisitive-led investment opportunities totalling almost ZAR1.0 billion that are over and
above the board-approved projects already recorded.
Aside from creating a flexible capital structure that will enable the Company to pursue accelerated growth
opportunities most efficiently, the Board believes it necessary to refinance existing facilities so as to reflect more
accurately the seasonality of its funding requirements, improve the match between the nature of investment
and the sources of capital, and lower its overall cost of capital.
With this in mind, and having reviewed in detail its financing options, the Board has decided to pursue a capital
increase by way of a rights offer of up to ZAR850 million and will approach shareholders to secure the requisite
approvals in order to proceed. Funds raised will be used to reduce to some extent and restructure current
indebtedness, fund capital projects and planned acquisitions and ensure that ADvTECH is adequately positioned
to execute on further growth opportunities identified from evaluation of the growing deal flow available at
present.
3. CONDITIONS PRECEDENT TO THE RIGHTS OFFER
The implementation of the rights offer is subject to the fulfilment of the following conditions:
- approval being obtained from ADvTECH shareholders of the resolutions required to implement the
rights offer;
- approval being obtained from the JSE Limited ("JSE") of the rights offer circular; and
- approval being obtained from the JSE for the listing of the letters of allocation and the listing of the
rights offer shares.
4. DISTRIBUTION OF CIRCULAR
ADvTECH shareholders are advised that a circular containing:
- details of resolutions to:
(i) increase the current authorised share capital from 500 000 000 (five hundred million) ordinary
shares of no par value to 1 000 000 000 (one billion) ordinary shares of no par value; and
(ii) place up to 90 000 000 (ninety million) of the authorised but unissued shares under the control
of the Board for purposes of the rights offer;
- a notice convening a general meeting of ADvTECH shareholders ("general meeting"); and
- a form of proxy to vote at the general meeting (for use by certificated ADvTECH shareholders and own-
name dematerialised ADvTECH shareholders),
will be posted to shareholders on 11 September 2015. The circular will also be available on the Company's
website: www.advtech.co.za.
5. NOTICE OF GENERAL MEETING
The general meeting will be held at 10:00 on Tuesday, 13 October 2015 at the Fairlawns Boutique Hotel,
Alma Road, Sandton, Johannesburg to consider and, if deemed fit, pass, with or without modification, the
resolutions proposed.
6. EXPECTED TIMETABLE FOR THE GENERAL MEETING AND RIGHTS OFFER
2015
Record date to be entitled to receive the circular incorporating the notice of
general meeting Friday, 4 September
Circular and notice of general meeting posted to ADvTECH shareholders Friday, 11 September
Last day to trade in ADvTECH shares in order to be eligible to vote at the general
meeting Friday, 25 September
Record date to be entitled to participate in and vote at the general meeting Friday, 2 October
Last day to lodge forms of proxy for the general meeting by 10:00 Friday, 9 October
General meeting of shareholders to be held at 10:00 Tuesday, 13 October
Results of the general meeting released on SENS Tuesday, 13 October
Special resolution to approve the increase in authorised share capital registered
with CIPC by Monday, 2 November
Finalisation announcement to be published on SENS Tuesday, 3 November
Last day to trade in ADvTECH ordinary shares in order to participate in the rights
offer (cum entitlement) Friday, 6 November
ADvTECH ordinary shares commence trading ex-entitlement at 09:00 Monday, 9 November
Listing of and trading in the letters of allocation on the JSE commences at 09:00 Monday, 9 November
Rights offer circular and form of instruction posted to certificated ADvTECH
shareholders Tuesday, 10 November
Record date for the rights offer Friday, 13 November
Rights offer opens at 09:00 Monday, 16 November
Letters of allocation credited to an electronic account created by the transfer
secretaries in respect of holders of certificated shares Monday, 16 November
CSDP or broker accounts credited with entitlements in respect of holders of
dematerialised shares Monday, 16 November
Rights offer circular posted to dematerialised shareholders who have elected to
receive such documents Tuesday, 17 November
Last day for trading letters of allocation on the JSE Friday, 20 November
Listing of rights offer shares and trading therein on the JSE commences at 09:00 Monday, 23 November
Rights offer closes at 12:00 Friday, 27 November
Record date for the letters of allocation Friday, 27 November
Rights offer shares issued on or about Monday, 30 November
CSDP or broker accounts in respect of holders of dematerialised shares debited
and updated with rights offer shares and share certificates posted to certificated
shareholders by registered post on or about Monday, 30 November
Results of the rights offer released on SENS Monday, 30 November
Results of the rights offer published in the press Tuesday, 1 December
CSDP or broker accounts in respect of holders of dematerialised shares debited
and updated with any excess shares allocated and share certificates posted to
certificated shareholders by registered post on or about Wednesday, 2 December
Refund cheques posted to holders of certificated shares in respect of
unsuccessful applications Wednesday, 2 December
Notes:
1. All times shown in this circular are South African local times.
2. These dates and times are subject to change. Any material changes will be released on SENS.
3. ADvTECH shareholders should note that as transactions in shares are settled in the electronic settlement
system used by Strate, settlement of trades takes place five business days after such trade. Therefore
persons who acquire ADvTECH ordinary shares after the voting last day to trade will not be eligible to
vote at the general meeting.
4. If a form of proxy is not received by the transfer secretaries by the time and date shown above or not less
than 48 hours before recommencement of any adjourned or postponed meeting, it may be handed to
the Chairman of the general meeting no later than ten minutes before the general meeting is due to
commence or recommence.
5. Share certificates may not be dematerialised or rematerialised between Monday, 9 November 2015 and
Friday, 13 November 2015, both days inclusive.
6. If you are a qualifying dematerialised ADvTECH shareholder you are required to notify your duly
appointed CSDP or broker of your acceptance of the rights offer in the manner and time stipulated in the
agreement governing the relationship between yourself and your CSDP or broker.
7. CSDPs effect payment on a delivery versus payment method in respect of qualifying dematerialised
ADvTECH shareholders.
8. Share certificates will be posted at the risk of the qualifying certificated ADvTECH shareholders (or their
renouncees).
Johannesburg
7 September 2015
Financial advisor and transaction sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
Legal adviser
Cliffe Dekker Hofmeyr Inc
Sponsor
Bridge Capital Advisors (Proprietary) Limited
Date: 07/09/2015 08:15:00 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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