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Declaration information relating to a renounceable rights offer of ZAR 4 billion
PPC Ltd
Registration Number 1892/000667/06
JSE & ZSE Code: PPC
ISIN: ZAE000170049
(“PPC” or the “Company” or “the Group”)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA AND JAPAN,
OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF
APPLICABLE LAW OR REGULATION
ANNOUNCEMENT RELATING TO:
- DECLARATION INFORMATION RELATING TO A RENOUNCEABLE RIGHTS OFFER OF
ZAR 4 BILLION; AND
- FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders of PPC (“Shareholders”) are referred to the announcement released on the
Stock Exchange News Service (“SENS”) of the JSE Limited (“JSE”) on Monday, 1 August
2016 relating to the approval by the requisite majority of Shareholders of all the resolutions
proposed at the general meeting of Shareholders held on Monday, 1 August 2016, for
purposes of implementing a proposed rights offer.
The Company intends to raise a gross total of ZAR 4 billion through a fully underwritten
renounceable rights offer ("the Rights Offer"), subject to the satisfaction of the conditions
precedent set out in paragraph 4 below.
A further announcement setting out the full terms and finalisation information of the Rights
Offer will be released on or about Wednesday, 24 August 2016.
2. RATIONALE FOR THE RIGHTS OFFER
PPC embarked on a strategy in 2010 to expand into Africa to extract value from high-growth
economies and diversify the Group’s exposure from the South African economy, as well as
to expand the Group’s business into adjacent and downstream cement business (the
“Expansion Strategy”). As part of the Expansion Strategy, the Group has invested in projects
in Rwanda, the Democratic Republic of Congo, Zimbabwe and Ethiopia. Given the project
lifecycle in the cement industry and the long lead time required to implement these projects,
the Group has drawn down on pre-arranged project finance debt without an immediate
concomitant increase in earnings and resultant cash flow. In order to help finance these
projects, the Group incurred additional debt during a period of deterioration in the
macroeconomic environment in which the Group operates which has impacted negatively on
the profitability of the Group’s existing operations and consequently the liquidity and
leverage position of the Group as a whole.
On 30 May 2016, S&P Global Ratings downgraded the Company’s long-term and short-term
South African national scale corporate credit ratings to zaBB-/zaB from zaA/zaA-2
respectively (the “Ratings Downgrade”).
As a result of the Ratings Downgrade, noteholders of outstanding notes (the “Notes”) issued
under PPC’s domestic medium term note programme (the “Note Programme”) had the right
to elect that the Company redeem their Notes (value at issuance of ZAR 1.75 billion) at par
plus accrued interest. As an interim measure and in order to ensure it was in a position to
honour its commitments to any holders of the outstanding Notes (“Noteholders”) who made
such an election, in June 2016 the Company concluded a short-term liquidity and guarantee
facility with The Standard Bank of South Africa Limited (“Standard Bank”), Absa Bank
Limited (“Absa Bank”), Nedbank Corporate and Investment Banking (a division of Nedbank
Limited) (“Nedbank”) and Rand Merchant Bank (a division of FirstRand Bank Limited)
(“RMB”) (collectively “the Banks”) which provides liquidity for the Company to redeem the
Notes (the “Liquidity and Guarantee Facility”).
On 24 June 2016, the majority of Noteholders elected that the Company redeem their Notes
at par plus accrued interest. On 15 July 2016, Notes with an aggregate value of
approximately ZAR 1.6 billion, were redeemed by the Company, whilst the remaining
ZAR 136 million remain to be redeemed on the original maturity dates.
In order to address the challenges outlined above, the Company is seeking to raise
ZAR 4 billion in gross proceeds through the Rights Offer.
3. USE OF PROCEEDS
The Board intends to use the net proceeds of the Rights Offer to: (i) repay outstanding
amounts under the Liquidity and Guarantee Facility (expected to be approximately ZAR 1.8
billion); (ii) repay outstanding amounts advanced by the Banks under other finance facilities
(expected to be approximately ZAR 1.2 billion); and (iii) to finance existing projects of the
Group and meet other requirements for funding its operations with the remainder of the
proceeds.
4. CONDITIONS PRECEDENT
The implementation of the Rights Offer is subject to the fulfilment of the following conditions
precedent:
- approval by the JSE of the circular relating to the Rights Offer ("the Rights Offer
Circular");
- approval by the JSE of the application for the listing of renounceable (nil paid) letters of
allocation (“Letters of Allocation”) envisaged in terms of the Rights Offer and of the
application for listing of any Rights Offer shares required for implementation of the
Rights Offer on the JSE; and
- any other relevant approvals required by the JSE and/or the Zimbabwe Stock Exchange
(“the ZSE”).
5. SALIENT DATES AND TIMES OF THE RIGHTS OFFER
Subject to the fulfilment of the conditions precedent as set out in paragraph 4 above, the
proposed salient dates and times for the Rights Offer are set out below:
2016
Finalisation announcement released on SENS Wednesday, 24 August
Last day to trade in PPC shares in order to participate in the Rights Offer
* Last day to trade for Zimbabwe is Friday, 26 August 2016 due to settlement cycle Tuesday, 30 August
Listing and commencement of trading of Letters of Allocation on the JSE
under share code: "PPCN" and ISIN: ZAE000222527
* Listing and trading of Letters of Allocation on the ZSE on Monday, 29 August 2016 Wednesday, 31 August
PPC ordinary shares commence trading on the JSE ex-Rights Offer
entitlement
* Trading in Zimbabwe will commence ex-Rights Offer on Monday, 29 August 2016 Wednesday, 31 August
Rights Offer Circular and form of instruction posted to qualifying
certificated Shareholders Thursday, 1 September
Record date for determination of Shareholders entitled to participate in the
Rights Offer Friday, 2 September
Dematerialised Shareholders will have their accounts at their Central
Securities Depository Participant (“CSDP”) or broker automatically
credited with their entitlement Monday, 5 September
Certificated Shareholders on the register will have their entitlement
credited to an electronic account held at Computershare Investor Services
Proprietary Limited (“Computershare”), in relation to qualifying
Shareholders on the South African register and Corpserve Transfer
Secretaries (Pvt) Ltd (“Corpserve” together with Computershare, “Transfer
Secretaries”) in relation to qualifying Shareholders on the Zimbabwean
register Monday, 5 September
Rights Offer opens at 09:00 Monday, 5 September
Rights Offer Circular posted to dematerialised Shareholders (where
applicable) Tuesday, 6 September
Last day to trade Letters of Allocation on the JSE and ZSE Tuesday, 13 September
Maximum number of Rights Offer shares listed and trading therein
commences on the JSE and ZSE Wednesday, 14 September
Rights Offer closes at 12:00 Friday, 16 September
Record date for Letters of Allocation Friday, 16 September
Rights Offer shares issued on Monday, 19 September
Dematerialised Shareholders’ accounts updated and debited by CSDP or
broker (in respect of entitlements to Rights Offer shares) Monday, 19 September
Certificates posted to certificated Shareholders (in respect of the Rights
Offer shares) on or about Monday, 19 September
Results of Rights Offer announced on SENS Monday, 19 September
Results of Rights Offer announced in the South African press Tuesday, 20 September
Refunds (if any) to certificated Shareholders in respect of unsuccessful
excess applications made and share certificates posted to certificated
Shareholders in respect of successful excess applications Wednesday, 21 September
Dematerialised Shareholders’ accounts updated and debited by their
CSDP or broker (in respect of successful excess applications) Wednesday, 21 September
Notes:
1. All references to times are local times in South Africa.
2. Share certificates in respect of PPC ordinary shares may not be dematerialised or rematerialised (a) in the case of PPC
ordinary shares listed on the JSE, between 31 August 2016 and 2 September 2016, both days inclusive and (b) in the case
of PPC ordinary shares listed on the ZSE, between 29 August 2016 and 2 September 2016, both days inclusive.
3. CSDPs effect payment on a delivery versus payment basis in respect of dematerialised shares.
4. Qualifying dematerialised Shareholders are required to inform their CSDP or broker of their instructions in terms of the
Rights Offer in the manner and time stipulated in the agreement governing the relationship between the qualifying
dematerialised Shareholders and their CSDP or broker. Qualifying dematerialised Shareholders are advised to contact
their CSDP or broker as early as possible to establish what the cut-off dates and times are for acceptance of the Rights
Offer, as set out in the custody agreement, as this may be earlier than the proposed closing time of the Rights Offer.
5. Transfers between the JSE and ZSE are not allowed.
6. FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the final terms of the Rights Offer will be announced on or
about Wednesday, 24 August 2016 and accordingly, Shareholders should continue to
exercise caution when dealing in the Company's securities.
Johannesburg
23 August 2016
Sole Global Co-ordinator, Joint Bookrunner and Joint Transaction Sponsor
The Standard Bank of South Africa Limited
Joint Bookrunner and Joint Transaction Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Joint Bookrunners
ABSA Bank Limited
Rand Merchant Bank, a division of FirstRand Bank Limited
Legal Advisor to PPC as to South African Law
Bowman Gilfillan Inc.
Legal Advisor to PPC as to US and English Law
Freshfields Bruckhaus Deringer LLP
Legal Advisor to the Joint Bookrunners as to South African Law
Webber Wentzel
Legal Advisor to the Joint Bookrunners as to US and English Law
Linklaters
Financial Advisor and Company Sponsor
Merrill Lynch South Africa (Pty) Limited
Sponsoring Brokers in Zimbabwe
Imara Edwards Securities
PPC:
Azola Lowan
Tel: +27 (0) 11 386 9000
Azola.Lowan@ppc.co.za
Financial Communications Advisor:
Instinctif Partners
Morne Reinders
Mobile: +27 (0) 82 325 1810
Morne.Reinders@instinctif.com
Louise Fortuin
Mobile: +27 (0) 71 605 4294
Louise.Fortuin@instinctif.com
NOTICE TO RECIPIENTS
This announcement is not for distribution, directly or indirectly, in or into the United States
(including its territories and dependencies, any State of the United States and the District of
Columbia), Canada and Japan.
This announcement includes certain "forward-looking statements" that reflect the current views
or expectations of the Board with respect to future events and financial and operational
performance. All statements other than statements of historical fact are, or may be deemed to
be, forward-looking statements, including, without limitation, those concerning: the Group's
strategy; the economic outlook for the industry; use of the proceeds of the Rights Offer. These
forward-looking statements are not based on historical facts, but rather reflect the Group's
current plans, estimates, projections and expectations concerning future results and events and
generally may be identified by the use of forward-looking words or phrases such as "believe",
"expect", "anticipate", "intend", "should", "planned", "may", "potential" or similar words and
phrases.
This announcement does not constitute an offer of, or an invitation to purchase, any securities
of the Company in any jurisdiction. This announcement does not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in the United States. The securities
mentioned herein (the “Securities”) have not been, and will not be, registered under the United
States Securities Act of 1933 (the “Securities Act”). The Securities may not be offered or sold in
the United States absent registration or an applicable exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
Date: 23/08/2016 11:14:00 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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