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Rights Offer Declaration Announcement and Revised Timetable
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NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,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.
RIGHTS OFFER DECLARATION ANNOUNCEMENT AND REVISED DATES AND TIMES
1. INTRODUCTION
ADvTECH shareholders are referred to the announcement released on the Stock Exchange News Service
(“SENS”) on Monday, 7 September 2015 in which the Company declared its intention to undertake a
renounceable rights offer to its shareholders (“rights offer”) to raise up to R850 million. A condition precedent
to the rights offer requires that the special resolutions which approved the increase of authorised share capital
and amendments to Memorandum of Incorporation be registered with the Companies and Intellectual
Property Commission (“CIPC”). Confirmation of registration has not yet been received from CIPC and as such
the timetable below has been amended to facilitate the confirmation of registration.
2. BACKGROUND TO AND RATIONALE FOR THE RIGHTS OFFER
ADvTECH shareholders were advised in the ADvTECH Group’s interim results for the six months ended 30 June
2015 that the 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.
To implement the rights offer, the Company was 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. This shareholder approval was obtained on Tuesday, 13 October 2015.
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 acquisition 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 a 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; and
- 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. Funds raised will be used to reduce 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. THE RIGHTS OFFER
3.1 SALIENT TERMS
In terms of the rights offer, 75,555,556 new ADvTECH ordinary shares (“rights offer shares”) will be
offered to ADvTECH shareholders recorded in ADvTECH’s share register at the close of business on
Friday, 20 November 2015 (“record date”), at a subscription price of R11.25 cents per rights offer
share, in the ratio of 16.59818 rights offer shares for every 100 ADvTECH ordinary shares held.
The subscription price per rights offer share represents a 10% discount to the 30 day volume
weighted average price of ADvTECH ordinary shares listed on the JSE Limited (“JSE”) as at the close
of business on Wednesday, 21 October 2015, being the date on which the rights offer was priced.
Shareholders holding shares that are cum rights the last day to trade, being Friday, 13 November
2015, will be entitled to trade their rights in the form of letters of allocation. The letters of
allocation will be listed and commence trading on the JSE on Monday, 16 November 2015.
The relevant dates are set out in the table below.
The rights offer shares issued will rank pari passu with the existing issued ordinary shares of
ADvTECH.
3.2 REVISED SALIENT DATES AND TIMES
2015
Special resolution to approve the increase in authorised share capital registered
with CIPC by Monday, 9 November
Finalisation announcement to be published on SENS by 11:00 Tuesday, 10 November
Last day to trade in ADvTECH ordinary shares in order to participate in the rights Friday, 13 November
offer (cum entitlement)
ADvTECH ordinary shares commence trading ex-entitlement at 09:00 Monday, 16 November
Listing of and trading in the letters of allocation on the JSE commences at 09:00 Monday, 16 November
Rights offer circular and form of instruction posted to certificated ADvTECH Tuesday, 17 November
shareholders
Record date for the rights offer Friday, 20 November
Rights offer opens at 09:00 Monday, 23 November
Letters of allocation credited to an electronic account created by the transfer Monday, 23 November
secretaries in respect of holders of certificated shares
CSDP or broker accounts credited with entitlements in respect of holders of Monday, 23 November
dematerialised shares
Rights offer circular posted to dematerialised shareholders who have elected to Tuesday, 24 November
receive such documents
Last day for trading letters of allocation on the JSE Friday, 27 November
Listing of rights offer shares and trading therein on the JSE commences at 09:00 Monday, 30 November
Rights offer closes at 12:00 Friday, 4 December
Record date for the letters of allocation Friday, 4 December
Rights offer shares issued on or about Monday, 7 December
CSDP or broker accounts in respect of holders of dematerialised shares debited Monday, 7 December
and updated with rights offer shares and share certificates posted to certificated
shareholders by registered post on or about
Results of the rights offer released on SENS Monday, 7 December
Results of the rights offer published in the press Tuesday, 8 December
CSDP or broker accounts in respect of holders of dematerialised shares debited Wednesday, 9 December
and updated with any excess shares allocated and share certificates posted to
certificated shareholders by registered post on or about
Refund cheques posted to holders of certificated shares in respect of Wednesday, 9 December
unsuccessful applications
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. Share certificates may not be dematerialised or rematerialised between Monday, 16 November 2015
and Friday, 20 November 2015, both days inclusive.
3.3 IRREVOCABLE UNDERTAKINGS AND UNDERWRITING COMMITMENTS
The following ADvTECH shareholders have irrevocably undertaken to follow their rights in terms of
the rights offer as set out below:
Number of ordinary Number of rights % of rights offer
shares held in offer shares shares
Name of shareholder ADvTECH before the
rights offer
Coronation 116,997,675 19,419,489 25.7%
Visio Capital 41,970,000 6,966,258 9.2%
Kyocraft 33,678,494 5,333,333 7.1%
Total 192,646,169 31,719,080 42.0%
In addition, the rights offer has been partially underwritten by Coronation and Visio Capital. In terms
of the underwriting agreements, Coronation and Visio Capital have provided ADvTECH with
irrevocable undertakings to underwrite 16,136,067 and 16,063,742 rights offer shares respectively,
(being R362.2 million in aggregate).
In aggregate, the irrevocable undertakings and underwriting commitments cover 63,918,889 of the
75,555,556 rights offer shares, representing 88% of the shares being offered.
3.4 EXCESS APPLICATIONS
ADvTECH shareholders will have the right to apply for any excess rights offer shares not taken up by
other shareholders subject to such rights being transferable upon renunciation of the letters of
allocation, and any such excess shares will be attributed equitably, taking cognisance of the number
of shares and rights held by the shareholder just prior to such allocation, including those taken up as
a result of the rights offer, and the number of excess rights offer shares applied for by such
shareholder.
3.5 FOREIGN SHAREHOLDERS
Introduction
Foreign shareholders may be affected by the rights offer, having regard to prevailing laws in their
relevant jurisdictions. Such foreign shareholders should inform themselves about and observe any
applicable legal requirements of such jurisdiction in relation to all aspects of the rights offer circular
that may affect them, including the rights offer. It is the responsibility of each foreign shareholder to
satisfy himself as to the full observation of the laws and regulatory requirements of the relevant
foreign jurisdiction in connection with the rights offer, including the obtaining of any governmental,
exchange or other consents or the making of any filing which may be required, the compliance with
other necessary formalities and the payment of any issue, transfer or other taxes or other requisite
payments due in such jurisdiction. The rights offer is governed by the laws of South Africa and is
subject to applicable laws and regulations, including the Exchange Control Regulations.
Affected foreign shareholders
Any ADvTECH shareholder who is in doubt as to his position with respect to the rights offer in any
jurisdiction, including, without limitation, his tax status, should consult an appropriate independent
professional advisor in the relevant jurisdiction without delay. Foreign shareholders are reminded
that they may dispose of their ADvTECH ordinary shares on or prior to the last day to trade, in which
case they will not participate in the rights offer.
Foreign shareholders accordingly must take their own advice on whether they are entitled, after the
rights offer, to continue beneficially to hold any ADvTECH ordinary shares distributed to them and
take the appropriate action in accordance with that advice.
Note to U.S. shareholders
The rights offer shares will not be registered with the U.S. Securities and Exchange Commission
(“SEC”) under the U.S. Securities Act of 1933, as amended, or any U.S. state securities laws. Neither
the SEC nor any U.S. federal or state securities commission has registered, approved or disapproved
the rights offer shares or passed comment or opinion upon the accuracy or adequacy of the circular
to be issued by ADvTECH in respect of the rights offer. Any representation to the contrary is a
criminal offence in the U.S.
ADvTECH shareholders who are citizens or residents of the U.S. are advised that the rights offer
shares have not been and will not be registered under the U.S. Securities Exchange Act of 1934, as
amended.
Sale of letters of allocation
It is the responsibility of any person outside the common monetary area (including, without
limitation, nominees, agents and trustees for such persons) wishing to take up rights offer shares
under the rights offer, to satisfy themselves as to full observance of the applicable laws of any
relevant territory, including obtaining any requisite governmental or other consents, observing any
other requisite formalities and paying any issue, transfer or other taxes due in such territories.
If a premium can be obtained over the expenses of the sale, the rights of ADvTECH shareholders in
the jurisdictions in which it is illegal to make an offer will be sold by the transfer secretaries on the
JSE for the benefit of such ADvTECH shareholders, in accordance with this section. Any premium
over the expenses of the sale of the rights of ADvTECH shareholders in these jurisdictions (including
applicable taxes, brokerage fees and commissions) shall be remitted to such ADvTECH shareholders.
None of ADvTECH, the transfer secretaries or any broker appointed by them or ADvTECH, will have
any obligation or be responsible for any loss or damage whatsoever in relation to, or arising out of,
the timing of such sales or the remittance of the net proceeds of such sales.
3.6 DISTRIBUTION OF CIRCULAR
ADvTECH shareholders are advised that a circular containing full details of the rights offer will be
posted on the dates set out in paragraph 3.2 above.
Johannesburg
3 November 2015
Sole bookrunner, financial advisor and transaction sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
Legal adviser
Cliffe Dekker Hofmeyr
Sponsor
Bridge Capital Advisors Proprietary Limited
Date: 03/11/2015 08:25:00 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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