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FINBOND GROUP LIMITED - Underwritten rights offer declaration, finalisation data announcement with regards to the North American Expansion

Release Date: 12/02/2016 12:50
Code(s): FGL     PDF:  
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Underwritten rights offer declaration, finalisation data announcement with regards to the North American Expansion

Finbond Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: FGL
ISIN: ZAE000138095
(“Finbond” or “the Company”)

UNDERWITTEN RIGHTS OFFER DECLARATION AND FINALISATION DATA ANNOUNCEMENT
WITH REGARDS TO FINBOND GROUP LIMITED’S NORTH AMERICAN EXPANSION


1. INTRODUCTION AND TERMS OF THE RIGHTS OFFER
   Shareholders are referred to the transaction announcement released on
   SENS on Friday, 5 February 2016 and are advised that the Board of
   Directors of Finbond have resolved to implement a capital raising of
   approximately R525 million by way of an underwritten rights offer
   (“the rights offer”).

   In terms of the rights offer, 157 185 629 new Finbond ordinary shares
   of 0.0001 cents each, in the authorised but unissued share capital of
   the Company (“the rights offer shares”), will be offered for
   subscription to Finbond shareholders recorded in the register at the
   close of trade on Friday, 26 February 2016 who will receive rights to
   subscribe for the rights offer shares on the basis of 25.98001 rights
   offer shares for every 100 Finbond ordinary shares held, at 334 cents
   per rights offer share.

2. RATIONALE FOR THE RIGHTS OFFER
   Finbond has embarked on an earnings enhancing growth strategy of
   establishing a business presence in the North American pay day
   lending   (short-term  lending)   market  through   acquisitions and
   subsequent organic growth of a number of pay day lenders in North
   America that specialise in the advancement of short-term credit.

   The initial phase of this strategy will be through the acquisition of
   4 North American pay day lending businesses in the United States of
   America and Canada that will give Finbond a branch network of 91
   branches in North America and Canada of which 85 will be in the
   United States of America (“USA”) and 6 in Canada. Following these
   acquisitions approximately 40% - 50% of Finbond’s Net Earnings will
   be denominated in US$ within 12 months of the effective date and the
   intention is to grow US$ earnings to approximately 70% - 80% of net
   earnings in 3 to 5 years.

   The purpose of the Rights Offer is to provide Finbond with capital in
   the amount of R525 million to enable it to conclude the initial North
   American acquisitions and for general working capital, funding and
   future growth. The salient terms and details of the initial North
   American acquisitions were announced on SENS on Friday, 5 February
   2016.

   The rationale for the North American acquisitions inter alia
   includes:
   - Earnings enhancing growth;
   - Significant growth and consolidation opportunity in the North
     American pay day lending industry;
   - Organic growth in Finbond’s core “30-day” or “pay day lending”
     competency;
   - Diversification of Country and Political Risk;
   - Effective ZAR hedge. Approximately 40% - 50% of earnings will be in
     hard currency 12 months after the North American acquisitions;
   - Economies of scale;
   - Teaming up with existing owners/managers with 10 - 30 years’
     experience in operating pay day lending businesses in North
     America;
   - Unique opportunity for South Africa’s largest short-term micro
     lender to enter the USA pay day lending market.

3. IRREVOCABLE UNDERTAKINGS AND UNDERWRITING
   Pursuant to the underwriting agreement between Finbond Group Limited
   and Midbrook Lane (Pty) Ltd (“Midbrook”), Net 1 Finance Holdings
   (Pty) Limited (“Net1”) and Finbond Chief Executive Officer, Dr.
   Willie van Aardt through Kings Reign Investments (Pty) Ltd (“KRI”),
   irrevocably committed to subscribe for R136 050 642 (40 733 725
   rights offer shares) and R75 000 000 (22 455 090 rights offer shares)
   respectively.

  Midbrook have further committed to underwrite the balance of the
  rights offer, being R313 949 358, subject to the irrevocable
  undertakings by KRI and Net 1 and the rights offer allowing for
  excess applications. An underwriting fee of 2.5% of the quantum of
  the rights offer which is underwritten, excluding the amounts to be
  subscribed for by KRI and Net 1, will be payable to Midbrook. The net
  effect is that Finbond has commitments for the take up of the full
  rights offer amount of R525 000 000.

4. EXCESS APPLICATIONS
   Finbond shareholders will be permitted to apply for new Finbond
   shares in excess of their entitlement. Should there be excess rights
   offer shares available for allocation, these will be allocated to
   applicants in a manner viewed as equitable in terms of the Listings
   Requirements of the JSE.

5. FRACTIONS
   The whole number of rights to subscribe for rights offer shares to
   which qualifying shareholders will become entitled will be determined
   by the ratio of entitlement. Only whole numbers of new Finbond shares
   will be issued and Finbond shareholders will be entitled to rounded
   numbers of shares once the ratio has been applied, using the rounding
   principle where allocations will be rounded up or down, as
   appropriate with fractions of 0.5 and above being rounded up and
   fractions below 0.5 being rounded down to the nearest whole number
   resulting in allocations of whole numbers of rights offer shares, in
   accordance with the Listings Requirements.

6. IMPORTANT DATES AND TIMES
                                                                    2016
   Rights    offer    declaration     data    and
   finalisation announcement released on SENS        Friday, 12 February
   Last day to trade in Finbond ordinary shares
   in order to participate in the rights offer
   (cum entitlement)                                 Friday, 19 February
   Listing of and trading in the letters of
   allocation on the JSE under JSE code FGLN
   and ISIN ZAE000214581                             Monday, 22 February
   Finbond ordinary shares commence trading ex
   rights on the JSE at 09:00                        Monday, 22 February
   Circular (and Form of Instruction) posted to
   (certificated) shareholders                      Tuesday, 23 February
   Record date for the rights offer for
   purposes    of   determining    the    Finbond
   shareholders entitled to participate in the
   rights offer at the close of business on          Friday, 26 February
   Rights offer opens at 09:00                       Monday, 29 February
   Certificated shareholders will have their
   letters   of   allocation   credited    to  an
   electronic account held at the transfer
   secretaries                                       Monday, 29 February
   Dematerialised shareholders will have their
   Letters of Allocation credited to their
   accounts held at their CSDP or broker             Monday, 29 February
   Last day for trading letters of allocation        Friday, 4 March
 on the JSE
 Listing of rights offer shares and trading
 therein on the JSE commences at 09:00               Monday, 7 March
 Rights offer closes at 12:00. Payment to be
 made and form of instruction lodged by
 certificated shareholders at the transfer
 secretaries                                         Friday, 11 March
 Record date for the letters of allocation           Friday, 11 March
 Rights offer shares issued and posted to
 shareholders in certificated form on or
 about                                               Monday, 14 March
 CSDP or broker accounts in respect of
 dematerialised shareholders will be updated
 with rights offer shares and debited with
 any payments due                                    Monday, 14 March
 Results of rights offer announced on SENS           Monday, 14 March
 In respect of successful excess applications
 (if applicable), rights offer shares issued
 to qualifying dematerialised shareholders
 and   or   share    certificates   posted   to
 qualifying certificated shareholders on or
 about                                            Wednesday, 16 March
 In    respect     of    unsuccessful    excess
 applications     (if    applicable),    refund
 payments made to certificated shareholders
 on or about                                      Wednesday, 16 March

Notes:
6.1.   All references to dates and times are to local dates and times
       in South Africa.
6.2.   Holders of dematerialised Finbond shares are required to
       notify their CSDP or Broker of the action they wish to take in
       respect of the rights offer in the manner and by the time
       stipulated in the agreement governing the relationship between
       the dematerialised shareholder and his CSDP or Broker.
6.3.   Finbond share certificates may not be dematerialised or
       rematerialised between Monday, 22 February 2016 and Friday, 26
       February 2016, both days inclusive.
6.4.   CSDPs effect payment in respect of holders of dematerialised
       rights offer shares on a delivery versus payment basis.
6.5.   Dematerialised shareholders will have their accounts at their
       CSDP or Broker automatically credited with their rights and
       certificated shareholders will have their rights credited to
       an account at the transfer secretaries.
6.6.   Rights offer share certificates to be issued in terms of the
       rights offer will be posted to persons entitled thereto, by
       registered post, at the risk of the certificated shareholders
       concerned.
6.7.   Any material changes to the dates and times above will be
       announced on SENS.

7. DOCUMENTATION
   A circular to Finbond shareholders, setting out full details of the
   rights offer, will be posted to shareholders on or about Monday, 22
   February 2016. A form of instruction in respect of the letters of
   allotment will be enclosed with the circular for use by Finbond
   shareholders who have not dematerialised their Finbond shares. The
   circular   will  also   be   available   on  the   Company’s website
   (www.finbondlimited.co.za) from Monday, 22 February 2016.

8. RESTRICTIONS
   The granting of the right to subscribe for rights offer shares in
   certain jurisdictions other than South Africa may be restricted by
   law and a failure to comply with any of those restrictions may
   constitute a violation of the securities laws of any such
   jurisdiction.

   The shares have not been and will not be registered for the purposes
   of the rights offer under the securities laws of the United Kingdom,
   Canada, United States of America or any other country outside South
   Africa and accordingly, are not being offered, sold, taken up, re-
   sold or delivered directly or indirectly to rights recipients with
   registered addresses outside South Africa.

  The rights offer does not constitute an offer in any area of
  jurisdiction in which it is illegal to make such an offer.


Johannesburg
12 February 2016

Corporate Advisor and JSE Sponsor
Grindrod Bank Limited

Date: 12/02/2016 12:50:00 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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