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Redemption and subsequent issue of preference share capital by a major subsidiary
ELB GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1930/002553/06)
Share code: ELR
ISIN: ZAE000035101
(“ELB”, “the Company” or “the Group”)
REDEMPTION AND SUBSEQUENT ISSUE OF PREFERENCE SHARE CAPITAL BY A MAJOR
SUBSIDIARY
1. BACKGROUND
Shareholders are referred to the announcement released on SENS on 17 March 2006
("announcement") and the circular issued to shareholders of ELB on 21 April 2006
(“circular”) advising that ELB had concluded an agreement with ELB Engineering Proprietary
Limited (“ELB Engineering”), ELB Equipment Holdings Proprietary Limited (“ELB Equipment
Holdings”) and ELB Engineering Services Proprietary Limited (“ELB Engineering Services”), to
restructure the operations of the Company to facilitate the introduction of a suitable
empowerment partner.
ELB Engineering settled a portion of the purchase price of the restructured companies
acquired from ELB through the allotment and issue of 900 (nine hundred) cumulative,
convertible, redeemable preference shares in ELB Engineering to the value of R90 million
(“preference shares”), effective 30 June 2006.
Further to the terms and conditions of the preference shares, where the redemption had
not taken place by the end of ten years after date of issue, then conversion to ordinary
shares would be compulsory.
Shareholders are advised to refer to the announcement and circular for further background
information to the original restructure transaction and terms and conditions of the
preference shares.
2. THE TRANSACTION
The board has resolved that the preference shares are to be redeemed at 30 June 2016
(“redemption”).
According to the terms and conditions of the preference shares, the redemption will be
undertaken for a value equivalent to the subscription price and no additional premium will
be added to the subscription price for this purpose.
Following the successful redemption, ELB will subscribe for 1 (one) 8% R90 million
cumulative convertible redeemable “A” preference share on similar terms and conditions as
the redeemed preference shares (“subscription”).
The redemption and subscription are collectively referred to as the “transaction.”
3. RATIONALE FOR THE TRANSACTION
The rationale for the original restructuring transaction was to facilitate the introduction of a
suitable empowerment partner into the Group and to enhance the dividend flow to ELB
shareholders. The Group wishes to continue its relationship with its empowerment partner.
4. FINANCIAL IMPACT OF THE SUBSCRIPTION
The financial impact of the subscription on the Group is nil as the investment and all
dividends will be eliminated on consolidation.
5. THE EFFECTIVE DATE OF THE TRANSACTION
The effective date of the redemption and subscription will be 30 June 2016 and is subject to
the lodgement of the amended ELB Engineering Memorandum of Incorporation (embodying
the terms and conditions of the new preference share to be issued in terms of the
subscription) with the Companies and Intellectual Property Commission.
6. CATEGORISATION
In terms of the JSE Limited Listings Requirements, the subscription is classified as a Category
2 transaction.
Johannesburg
3 June 2016
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 03/06/2016 10:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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