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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').
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