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Signing of Loan Agreement and Underwriting Agreement, Intended Rights Offer and Cautionary Announcement
BONATLA PROPERTY HOLDINGS LIMITED
(Registration number 1996/014533/06)
Share code: BNT ISIN: ZAE000013694
(”Bonatla” or “the Company”)
ANNOUNCEMENT REGARDING THE SIGNING OF A LOAN AGREEMENT AND
UNDERWRITING AGREEMENT WITH THE KINFEDI CONSORTIUM, INTENDED RIGHTS OFFER
AND NEW CAUTIONARY ANNOUNCEMENT
Shareholders are advised that two inter-related agreements have been signed
between Bonatla and Kinfedi Investments Proprietary Limited (“Kinfedi”) whereby
Kinfedi will provide the Company or its nominee with a R800 million loan facility (“Loan
Agreement”), which funding will be provided by way of approved drawdowns, and
which loan will be used to partially underwrite an intended rights offer at 50 cents per
share in due course. Kinfedi is securing the funding from an infrastructure fund based in
Europe.
1.1 Terms of the loan
The amount of R800 million provided under the loan facility shall be utilised by
Bonatla to acquire properties and plant and machinery and for working capital
for its business to fund its operations. The projects to be funded by the loan facility,
will include a number of investments concluded, and to be concluded, by
Bonatla and/or its subsidiaries.
The loan facility shall be for a period of three years from the first drawdown,
provided that any extension of this period should be agreed to between the
parties in writing at least three months before the third anniversary of the Loan
Agreement. Bonatla may re-borrow any part of the loan facility which is repaid.
The loan will bear interest at 3% per annum on amounts drawn down.
It is intended that amounts drawn down on the loan will be repaid by way of
capitalisation of the loan, through Kinfedi underwriting an intended rights offer by
Bonatla in due course. The funding agreement contains a call option at 50 cents,
which call option will be subject to shareholder approval.
1.2 Terms of the underwriting agreement and intended rights offer
Bonatla plans to raise R800 million by way of a rights offer In due course, which
rights offer will be partially underwritten by Kinfedi. Any shortfall amount not raised
in terms of the rights offer of R800 million will form part of a call option granted to
Kinfedi to convert all or a portion of the loan outstanding into ordinary Bonatla
shares at a fixed price of R0.50 per Bonatla share. The maximum commitment for
Kinfedi in terms of the underwriting agreement will be the equivalent of the full
value of the outstanding loan balance owing by Bonatla to Kinfedi on the last
business day preceding the opening of the rights offer, including costs and interest
thereon.
As it is the intention of the parties for the loan to be settled by Kinfedi underwriting
the intended rights offer, it is has been agreed that security for the due payment
by Bonatla of all the monies which are or may become due and owing to Kinfedi
will only be provided where the loan has been drawn down for property, plant
and equipment assets acquired and not for working capital purposes and until
such time as the loan is capitalised through the rights offer or call option.
The effective date of the agreement will be the date of the first draw down or 31
January 2017. The conversion date will be any date following the approval by the
shareholders of Bonatla at the first shareholder meeting following the signature of
the agreement.
1.3 Rationale
The principle strategic objective behind the transaction is to assist Bonatla to
enhance its profile as a property entity and an investment holding company in
strategic businesses. Kinfedi’s specific interest in Bonatla arises from the
Company’s existing shareholdings in and/or the announcements it has made
regarding the signing of agreements to acquire the following assets:
- The activated carbon business, which relate to manufacturing and green
energy;
- Ruitersvlei and Grande Roche, which present agricultural development,
tourism, property holding and property development opportunities;
- The Kimberley Diamond Hub, affording property and beneficiation
opportunities;
- Lincoln Meade, which provides for the development of middle-income
housing and retail/small office development; and
- Other targeted property and hospitality investment opportunities.
In investing in Bonatla, Kinfedi is partnering with Bonatla in its socially responsible
business endeavours to create additional employment through socio-economic
development, backed by property investment and property development
initiatives and a strong balance sheet. The parties believe that the combination
of business and real estate components will contribute to sustainable growth for
the benefit of all stakeholders.
In addition, the transaction will enable Bonatla to recapitalise its balance sheet,
have access to larger transactions and will enable Bonatla to inject assets and
capital into the Company in order to meet the requirements of paragraph 4.28 of
the Listings Requirements of the Johannesburg Stock Exchange (“JSE”) for a Main
Board listed company.
1.3 Conditions precedent
The implementation of the underwriting agreement and intended rights
offer is subject to the fulfillment of the following conditions:
- Approval being obtained from the JSE for the rights offer circular;
- The shareholders of Bonatla approving, with the necessary majority, all
resolutions required to give effect to the underwriting agreement and
the funding agreement as it relates to the call option;
- Approval being obtained from the JSE for the listing of the letters of
allocation and the subsequent listing of the new shares issued in terms of
the rights offer; and
- Various regulatory approvals, including, but not limited to Exchange
Control and TRP, to the extent that it may be necessary.
Shareholders are advised that in the event that Kinfedi obtains control over
Bonatla as a result of the underwriting of the intended rights offer, a
mandatory offer to minority shareholders in Bonatla will not be required.
1.4 Documentation and categorisation
No shareholder or JSE approval is required for the loan facility and funds are
expected to be available for drawdown by the end of January 2017.
The rights offer, approval of the issue of more than 30% new shares, the call option
and the various acquisitions to which the funds will be applied are category 1
transactions. Circulars will be prepared and a further announcement will be
made in due course.
1.5 Cautionary announcement
Shareholders are advised to exercise caution while dealing with the Company’s
securities until further announcements regarding the above and confirming that
the loan facility has been finalised and the funding available for drawdown are
made.
By order of the board
23 December 2016
SPONSOR
Arbor Capital Sponsors Proprietary Limited
Date: 23/12/2016 11:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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