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Announcement regarding Sasfin’s Broad-Based Black Economic Empowerment transaction and renewal of cautionary
Sasfin Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/002097/06)
Ordinary share code: SFN ISIN: ZAE000006565
Preference share code: SFNP ISIN: ZAE000060273
(“Sasfin” or “the Company”)
ANNOUNCEMENT REGARDING:
- THE IMPLEMENTATION, SUBSCRIPTION AND RELATIONSHIP AGREEMENT ENTERED INTO
WITH BROAD-BASED BLACK ECONOMIC EMPOWERMENT (“B-BBEE”) INVESTOR WOMEN
INVESTMENT PORTFOLIO HOLDINGS LIMITED ("WIPHOLD") AND ITS WHOLLY OWNED
SUBSIDIARY, SINVENT INVESTMENTS 245 PROPRIETARY LIMITED, ("WIPHOLD SPV"); AND
- RENEWAL OF CAUTIONARY ANNOUNCEMENTS
1. Introduction
Sasfin shareholders (“Shareholders”) are referred to the cautionary announcement published on
16 March 2017 wherein they were advised that WIPHOLD had confirmed its interest to conclude a
transaction with Sasfin upon implementation of which, WIPHOLD would hold 25.1% of the ordinary
shares in the issued capital of Sasfin.
Shareholders are advised that Sasfin has now entered into an implementation, relationship and
subscription agreement with WIPHOLD and WIPHOLD SPV, (“Subscription Agreement”) on 7 June
2017 (“Signature Date”) in terms of which, inter alia:
- WIPHOLD SPV will subscribe for Sasfin ordinary shares (“Shares”) in terms of a specific issue
of shares for cash (“Subscription”); and
- Sasfin will make an offer to repurchase all or some of the Shares held by Shareholders
(“Repurchase Offer”) in compliance with all of the applicable requirements for a scheme of
arrangement in terms of section 114 of the Companies Act, 71 of 2008 (“Companies Act”) read
with section 115 of the Companies Act.
The Subscription and Repurchase Offer (collectively “Transaction”) are indivisibly linked and the
details of the Subscription and Repurchase Offer, including the suspensive conditions to which the
Transaction is subject, are set out below. Amongst such conditions is the condition that the
Repurchase Offer is accepted in respect of at least 16.3% of all Shares in the issued share capital of
Sasfin as at the closing date of the Repurchase Offer, on the basis that this condition may be waived
or relaxed by Sasfin (in its sole discretion).
2. The Subscription
In terms of the Subscription Agreement, WIPHOLD SPV will subscribe for 8 107 662 Shares (or such
greater number of Shares if the Repurchase Offer is undersubscribed as envisaged below)
(“Subscription Shares”) for an aggregate subscription consideration of R413 490 762 (“Subscription
Consideration”) being R51.00 per Share or such lower price per Share if the Repurchase Offer is
undersubscribed as envisaged below (“Subscription Price Per Share”).
The Subscription Price Per Share represents a 5.6% premium to R48.27 being Sasfin's 30 day volume
weighted average price on the exchange operated by JSE Limited (“JSE”) up to and including 6 June
2017, being the date immediately prior to the Signature Date.
Save that (i) the Subscription Shares shall, after the implementation of the Transaction, constitute
25.1% of the entire issued ordinary share capital of Sasfin and (ii) the Subscription Shares shall be
listed on the JSE and will rank pari passu with all other issued and listed Shares, no warranty in
respect of the Subscription Shares, Sasfin, the Sasfin group and its business or any other matter
whatsoever, whether express or implied, is given to WIPHOLD SPV.
3. The Repurchase Offer
As an indivisible component of the Transaction and subject to the suspensive conditions set out in
paragraph 4 below, Sasfin will make the Repurchase Offer to repurchase all or some of the Shares
held by Shareholders recorded on the share register on the share repurchase record date (excluding
WIPHOLD SPV for the avoidance of any doubt) (“Repurchase Offer Participants”) which offer such
Repurchase Offer Participants may, in each case, accept or decline in whole or in part, subject to a
maximum aggregate repurchase equal to 25.1% of all Shares in the issued share capital of Sasfin as
at the closing date of the Repurchase Offer, being 8 107 662 Shares. Some of the terms of the
Repurchase Offer to be contained in the circular in relation to the Transaction to be dispatched by
Sasfin to those Shareholders and other persons who are entitled to receive such document
("Circular") are as follows:
- the Repurchase Offer will be made at a price of R51.00 per Share;
- subject to the prescribed maximum fixed number of Shares that may be repurchased by Sasfin,
each Repurchase Offer Participant (acting alone or as a group as envisaged below) may, in each
case, accept or decline the Repurchase Offer in whole or in part;
- the maximum number of Shares that may be repurchased by Sasfin in terms of the Repurchase
Offer shall be 8 107 662 Shares and if Repurchase Offer Participants tender Shares in excess of
such fixed number of Shares then the number of their tendered Shares shall be reduced on a pro
rata basis in accordance with the following formula:
X = Y/Z x W
where:
X = the number of Shares to be repurchased from the Repurchase Offer Participant
(which shall be subject to rounding convention);
Y = the number of Shares tendered by the Repurchase Offer Participant for repurchase in
terms of the Repurchase Offer;
Z = the total number of Shares tendered for repurchase by all Repurchase Offer
Participants in terms of the Repurchase Offer;
W = the maximum number of Shares being repurchased by Sasfin, namely 8 107 662
Shares;
- 2 or more Repurchase Offer Participants may group together before the closing date of the
Repurchase Offer and accordingly be treated as a single Shareholder for the purpose of the
formula set out above and decide amongst themselves in writing how "X" will be apportioned
amongst them;
- the aggregate repurchase consideration to be paid to all Repurchase Offer Participants who
accept the Repurchase Offer shall not exceed the Subscription Consideration to be paid by
WIPHOLD SPV in terms of the Subscription;
- Repurchase Offer Participants will be required to accept or decline the Repurchase Offer in whole
or in part before the closing date of the Repurchase Offer, failing which they will be deemed to
have elected to decline the Repurchase Offer; and
- the Repurchase Offer shall not constitute an offer to purchase or the solicitation of an offer to sell
any Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Therefore, if:
- the Repurchase Offer is oversubscribed, the number of Shares tendered in by the Repurchase
Offer Participants will be reduced on a pro rata basis; and
- the Repurchase Offer is undersubscribed, only the total number of Shares tendered in by the
Repurchase Offer Participants will be repurchased. In this event, Sasfin may need to waive or
relax the condition that the Repurchase Offer is accepted in respect of 16.3% of all Shares in the
issued share capital of Sasfin as at the closing date of the Repurchase Offer, and the number of
Subscription Shares required to be issued to WIPHOLD SPV shall increase so as to ensure that
the Subscription Shares represent 25.1% of the total issued ordinary share capital of Sasfin
immediately after the implementation of the Repurchase Offer and the Subscription. In these
circumstances, as the number of Subscription Shares to be issued to WIPHOLD SPV increases,
the Subscription Price Per Share will decrease below R51.00 per Share but the Subscription
Consideration will remain unchanged.
All Shares acquired in terms of the Repurchase Offer will be cancelled and will have the same status
as Shares that have been authorised but not issued. Consequently, upon implementation of the
Transaction, WIPHOLD SPV will hold 25.1% of the entire issued share capital of Sasfin.
4. Suspensive Conditions
The Transaction is subject, inter alia, to the following material suspensive conditions:
- confirmation from WIPHOLD SPV that it has the requisite funding to discharge the Subscription
Consideration, on the basis that this condition may be waived or relaxed by Sasfin (in its sole
discretion);
- the Sasfin board passing such resolutions as may be necessary to implement the Transaction;
- Sasfin obtaining irrevocable undertakings from Shareholders who hold at least 65% of all
Shares in issue in terms of which such Shareholders undertake to vote in favour of all
resolutions to implement the Transaction;
- a fair and reasonable opinion regarding the Repurchase Offer in terms of Section 114(3) of the
Companies Act (read with Regulation 90 of the of the Companies Regulations 2011, (the
"Regulations") ("Independent Expert Opinion");
- a general meeting is held to approve all requisite resolutions in respect of the Transaction,
including but not limited to (i) such resolutions as are contemplated in the JSE Listings
Requirements and Sasfin's memorandum of incorporation, including the requisite resolution to
implement the Subscription and the requisite resolution to implement the Repurchase Offer; (ii)
a special resolution in terms of section 48(8)(a) of the Companies Act, to the extent that any
Shareholders who accept the Repurchase Offer are directors or prescribed officers of Sasfin or
to the extent that any Shareholders which accept the Repurchase Offer are related to a director
or prescribed officer of Sasfin and (iii) the approval of the repurchase (and, in particular, the
Repurchase Offer (being an indivisible component of the Transaction), as required by section
48(8)(b) of the Companies Act), by way of a special resolution of the Shareholders in terms of
section 115(2) of the Companies Act;
- all other regulatory approvals required to give effect to and implement the Transaction are
granted, including, without limitation, the approval of the South African Registrar of Banks in
terms of section 37 of the Banks Act, the Takeover Regulation Panel and the South African
exchange control authorities; and
- the Repurchase Offer is accepted in respect of at least 16.3 % of all Shares as at the closing
date of the Repurchase Offer, on the basis that this condition may be waived or relaxed by
Sasfin (in its sole discretion).
5. Required B-BBEE Ownership Level, Shareholder of Reference and Board Seats
Subject to the provisions of the Subscription Agreement, WIPHOLD SPV has undertaken that for
the period commencing on the subscription date, being the date on which WIPHOLD SPV
becomes a Sasfin shareholder (“Subscription Date”), and expiring on the seventh anniversary
thereof (“Lock-in Period”):
- each of WIPHOLD SPV, WIPCapital and any entity to whom WIPCapital may lawfully assign
rights and obligations under the service level agreement envisaged in paragraph 6 below, are
and will be at least a 50.1% Black Women owned company (by reference to B-BBEE
legislation in force as at the Signature Date); and
- it will not dispose of or encumber any or all of its Shares.
Subject to the final agreement between WIPHOLD SPV and the South African Registrar of Banks,
WIPHOLD SPV will undertake to become a shareholder of reference during the Lock-in Period
and so long as its shareholding in Sasfin represents 15% or more of all issued Sasfin share
capital.
Save for these undertakings, there are no further undertakings from WIPHOLD SPV.
Subject to the provisions of the Subscription Agreement, with effect from the Subscription Date
and for the duration of the Lock-in Period, WIPHOLD SPV shall be obliged to recommend and
propose that, as non-executive directors:
- two black women be co-opted to the Sasfin board;
- one black woman be co-opted to the Sasfin Bank Limited (“Sasfin Bank”) board; and
- one black woman be co-opted to the board of any other material wholly owned subsidiary of
Sasfin (other than the Sasfin Bank board) identified by WIPHOLD SPV having regard to its
importance in the Sasfin group.
6. Service Level Agreement (“SLA”)
Further to the Subscription Agreement, WIPCapital Proprietary Limited, a wholly owned subsidiary
of WIPHOLD, („WIPCapital”) and Sasfin have entered into an SLA in terms of which WIPCapital
will provide services to the Sasfin group on the terms and conditions contained therein, some of
the details of which are set out below.
In terms of the SLA, for the duration of the Lock-in Period, WIPCapital will render the following
services:
- promoting and growing the Sasfin group by introducing prospective clients to the Sasfin group
and generally referring new business to the Sasfin group, provided that this does not prejudice
the WIPHOLD group;
- assisting the Sasfin group with business development;
- assisting the Sasfin group with all matters pertaining to the B-BBEE credentials of Sasfin and
the members of the Sasfin group, including assistance with procurement to maximise Sasfin's
B-BBEE credentials and the members of the Sasfin group;
- assisting the Sasfin group with the recruitment of senior management;
- providing the Sasfin group with black economic empowerment advisory services and input and
advice regarding black economic empowerment strategies for the Sasfin group;
- assisting the Sasfin group with building stakeholder and corporate relations;
- assisting the Sasfin group with transformation issues;
- assisting the Sasfin group with the development and implementation of strategy; and
- attending operations updates and briefing sessions with management on a monthly basis, or if
not possible, at least on a quarterly basis.
For these services, WIPCapital will receive a management fee. The management fee will be paid
on a monthly basis and equates to a monthly instalment of R516 863 (including value added tax).
The management fee will escalate in accordance with the weighted average consumer price index
on an annual basis.
Both Sasfin and WIPCapital have limited termination rights under the SLA.
7. Circular to Shareholders regarding the Transaction and timing of the Transaction
In terms of the JSE Listings Requirements and the Companies Act, the Transaction requires the
approval of Shareholders in general meeting. The Circular containing full details of the Transaction
as well as a notice to convene a general meeting of Shareholders in order to consider and, if deemed
fit, to pass with or without modification, the resolutions necessary to approve and implement the
Transaction, will be made available to Shareholders in due course. It is expected that the general
meeting will be held at the end of August 2017 and that the Repurchase Offer will run during
September 2017. The date of the general meeting and the dates of the Repurchase Offer will be
confirmed to Shareholders at the time that the Circular is made available.
Shareholders are advised that in accordance with the Regulations, Sasfin has constituted an
Independent Board, inter alia, to consider the contents of the Independent Expert Opinion to be
prepared in respect of the Repurchase Offer and that the Independent Expert Opinion and the
resultant recommendation of the Independent Board will be contained in the Circular.
8. Renewal of cautionary announcements
The Transaction
Shareholders are referred to the renewal of cautionary announcements published on 28 April 2017.
The financial effects relating to the Transaction are still being finalised and will be provided to
Shareholders in due course. Accordingly, Shareholders are advised to continue exercising caution
when dealing in the Company's securities until this information is made available.
Transaction regarding the acquisition of Absa Technology Finance Solutions Proprietary
Limited’s (“ATFS”) loan book
Shareholders are referred to the announcement published on 13 March 2017 wherein they were
advised that Sasfin or its nominee (“Purchaser”) had concluded a binding offer with ATFS, in terms of
which the Purchaser will acquire ATFS' entire loan book (“Acquisition”), subject to certain conditions
precedent and the renewal of cautionary announcements published on 28 April 2017.
The audited value of the net assets that are the subject of the Acquisition and the audited profit after
tax attributable to such net assets are still being finalised and will be provided to Shareholders in due
course. Accordingly, Shareholders are advised to continue exercising caution when dealing in the
Company's securities until this information is made available.
Shareholders are further advised that the JSE have granted Sasfin an extension of the 60 day rule
pursuant to paragraph 9.20(b) of the JSE Listings Requirements to dispatch the circular regarding the
Acquisition to Shareholders. The extension has been granted until 31 July 2017.
9. Responsibility
In accordance with Regulation 101 of the Regulations, the Sasfin board of directors and the
Independent Board formed for the purposes of the Repurchase Offer:
- accept responsibility for the information contained in this announcement;
- confirm that to the best of each member's respective knowledge and belief, the information
contained in this announcement is true; and
- confirm that this announcement does not omit anything likely to affect the importance of the
information relating to the Transaction.
Johannesburg
8 June 2017
Investment Bank, Corporate Adviser and Lead Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Independent Sponsor
KPMG Services Proprietary Limited
Legal Adviser to Sasfin
Edward Nathan Sonnenbergs Incorporated
Legal Adviser to WIPHOLD
Tshisevhe Gwina Ratshimbilani Inc.
Date: 08/06/2017 08:00:00 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
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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,
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