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Declaration Announcement and Terms of The Sun International Renounceable Rights Offer
Sun International Limited
(Incorporated in the Republic of South Africa)
(Registration number 1967/007528/06)
Share code: SUI & ISIN code: ZAE000097580
(“Sun International” or the “Company”)
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN OR ANY OTHER JURISDICTION WHERE EXTENSION
OR MAKING THE RIGHTS OFFER WOULD BE UNLAWFUL OR IN CONTRAVENTION OF APPLICABLE LAW.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE UNITED
STATES OR ANY OTHER JURISDICTION
DECLARATION ANNOUNCEMENT AND TERMS OF THE SUN INTERNATIONAL RENOUNCEABLE RIGHTS
OFFER
1. Introduction
Sun International shareholders (“Shareholders”) are referred to the results of the general meeting announcement
released by Sun International on 23 March 2018 on the Stock Exchange News Service (“SENS”) of the JSE Limited
(“JSE”), wherein Shareholders were advised that the necessary resolutions to implement a rights offer (“Rights
Offer”) had been obtained.
2. Salient terms of the Rights Offer
Sun International proposes raising an amount not exceeding R1.5 billion through an offer of 25 941 107 Rights
Offer shares (“Rights Offer Shares”) (excluding the 1 702 869 Rights Offer Shares attached to Sun International’s
treasury shares) at a price of R57.82 per Rights Offer Share (“Rights Offer Issue Price”) in the ratio of 25.34
Rights Offer Shares for every 100 existing Sun International ordinary shares (“Sun International Shares”) held
on the record date for the Rights Offer, being Friday, 18 May 2018.
The Rights Offer Issue Price represents the 10 trading day volume weighted average price of Sun International
Shares on the securities exchange operated by the JSE up to and including Monday, 7 May 2018, being the day
preceding this declaration announcement.
Application will be made to the JSE for the listing of the letters of allocation in respect of the Rights Offer Shares
(“Letters of Allocation”) and the Rights Offer Shares on the securities exchange operated by the JSE as follows:
- Letters of Allocation will be listed from the commencement of business on Wednesday, 16 May 2018 to the
close of business on Tuesday, 29 May 2018 under the JSE code: SUIN and ISIN: ZAE000257945; and
- the Rights Offer Shares will be listed with effect from the commencement of business on Wednesday, 30
May 2018.
The Rights Offer Shares will, upon allotment and issue, rank pari passu with all other Sun International Shares of
the same class.
Shareholders will have the right to apply for any excess Rights Offer Shares not taken up by other Shareholders
subject to such rights being transferable upon renunciation of the Letters of Allocation, and any such excess Shares
will be attributed equitably, taking cognisance of the number of Shares and rights held by the Shareholder just prior
to such allocation, including those taken up as a result of the Rights Offer, and the number of excess rights applied
for by such Shareholder.
3. Rationale for the Rights Offer
In recent years, Sun International has concluded a number of transactions and projects which included:
- the opening of the Ocean Sun Casino (“OSC”) in Panama and the Sun Nao Casino (“SNC”) in Colombia;
- the merger of its Latin American operations with that of Dreams S.A., including the acquisition of a controlling
interest in the merged entity;
- the acquisition of 70% of SunSlots (formerly GPI Slots);
- the construction of Time Square; and
- the refurbishment of a number of Sun International’s existing hotels and casinos.
All of the above projects and acquisitions were funded through debt and, following the merger with Dreams S.A. in
2016, Sun International reorganised its debt which was separately raised and ring-fenced in Latin America, South
Africa and Nigeria.
At 31 December 2017, the Company’s borrowings were R15 billion, of which R11.4 billion was attributable to the
South African balance sheet. The South African debt includes the investments made in OSC and SNC. At 31
December 2017, the Company had outstanding capital investment commitments of approximately R230 million in
order to complete the Time Square development.
Due to difficult trading conditions and Time Square trading well behind expectations, the Company renegotiated
its South African debt covenant levels for June 2017 and December 2017. Although trading has improved
marginally at Time Square and the Company met its debt covenants at 31 December 2017, the Board has
nevertheless deemed it prudent to embark on a capital raise exercise in order to de-risk its balance sheet.
Accordingly, the proceeds from the Rights Offer will be used to repay debt, thereby creating head room in relation
to relevant debt covenants. A stronger balance sheet and capital structure will also afford management greater
operational freedom and the ability to focus its time and efforts on the stated ‘back to basics’ strategy. In addition,
the Rights Offer will reduce Sun International’s interest charge as rates are based on Sun International’s prevailing
debt metrics.
4. Shareholder support and underwriting
Sun International has obtained written indications of support from certain entities who are either the registered and
beneficial owners of Sun International Shares, or holders of discretionary mandates as investment managers of
clients who are beneficial owners of Sun International Shares, indicating that they intend to participate, or procure
that their clients participate, in the Rights Offer for approximately 15 463 739 Rights Offer Shares, representing
approximately R894 million of the aggregate Rights Offer proceeds.
Furthermore, to provide the Company and Shareholders with certainty of successful implementation of the Rights
Offer, the Company has entered into an underwriting agreement with Value Capital Partners Proprietary Limited
to partially underwrite the Rights Offer up to a maximum amount of R750 million.
Further details of the underwriting agreement and Shareholder support will be set out in the Rights Offer circular.
5. Entitlement
The allocation of Rights Offer Shares will be such that Shareholders will not be allocated a fraction of a Rights
Offer Share and as such any entitlement to receive a fraction of a Rights Offer Share which:
- is less than one-half of a Rights Offer Share, will be rounded down to the nearest whole number; and
- is equal to or greater than one-half of a Rights Offer Share but less than a whole Rights Offer Share, will be
rounded up to the nearest whole number.
6. Conditions precedent
The implementation of the Rights Offer is subject to the JSE granting a listing for the Letters of Allocation and the
Rights Offer Shares on the securities exchange operated by the JSE in respect of the Rights Offer.
7. Foreign shareholders
Foreign Shareholders may be affected by the prevailing laws in their relevant jurisdictions in relation to the Rights
Offer. Such foreign Shareholders should inform themselves about and observe any applicable legal requirements
of such jurisdiction in relation to all aspects of this announcement that may affect them, including the Rights Offer.
It is the responsibility of each foreign Shareholder to satisfy himself as to the full observation of the laws and
regulatory requirements of the relevant foreign jurisdiction in connection with the Rights Offer, including the
obtaining of any governmental, exchange or other consents or the making of any filing which may be required, the
compliance with other necessary formalities and the payment of any issue, transfer or other taxes or other requisite
payments due in such jurisdiction. The Rights Offer is governed by the law of South Africa and is subject to
applicable laws and regulations, including South African exchange control regulations.
The Letters of Allocation and the Rights Offer Shares will not be registered with the U.S. Securities and Exchange
Commission (“SEC”) under the U.S. Securities Act of 1933, as amended, (“U.S. Securities Act”) or under any
securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up,
exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except
pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the
U.S. Securities Act and applicable state and other securities laws of the United States. There will be no public offer
of the Letters of Allocation or the Rights Offer Shares in the United States. Neither the SEC nor any United States
federal or state securities commission has registered, approved or disapproved the Letters of Allocation, the Rights
Offer Shares or the Rights Offer circular or passed comment or opinion upon the accuracy or adequacy of this
announcement. Any representation to the contrary is a criminal offence in the United States.
8. Salient dates and times
The proposed salient dates and times in respect of the Rights Offer are set out below:
2018
Declaration date announcement released on SENS on Tuesday, 8 May
Declaration date announcement released in the press on Wednesday, 9 May
Finalisation date announcement released on SENS on Thursday, 10 May
Publication of the Rights Offer Circular on the website of Sun International Monday, 14 May
Last day to trade in Sun International Shares in order to participate in the Rights Offer Tuesday, 15 May
Listing and trading of Letters of Allocation on the JSE under JSE code: SUIN and ISIN: ZAE000257945 commences Wednesday, 16 May
at 09:00 on
Sun International Shares commence trading on the JSE ex-Rights Offer entitlement Wednesday, 16 May
Rights Offer Circular and Form of Instruction distributed to Certificated Shareholders Thursday, 17 May
Record Date for determination of Shareholders entitled to participate in the Rights Offer (Initial Record Date) Friday, 18 May
Dematerialised Shareholders will have their accounts at their CSDP or Broker automatically credited with their Monday, 21 May
Letters of Allocation at 09:00 on
Certificated Shareholders on the Register will have their Letters of Allocation credited to their accounts held with the Monday, 21 May
Transfer Secretaries at 09:00 on
Rights Offer opens at 09:00 on Monday, 21 May
Rights Offer Circular distributed to those Dematerialised Shareholders who have elected to receive documents in Tuesday, 22 May
hard copy
Last day to trade Letters of Allocation on the JSE Tuesday, 29 May
Certificated shareholders, wishing to sell all or some of their Letters of Allocation, Forms of Instruction to be lodged Tuesday, 29 May
with the Transfer Secretaries by 12:00 on
Rights Offer Shares listed and trading therein commences on the JSE Wednesday, 30 May
Certificated shareholders wishing to exercise all or some of their Rights, payment to be made and Forms of Friday, 1 June
Instruction to be lodged with the Transfer Secretaries by 12:00 on
Rights Offer closes at 12:00 on Friday, 1 June
Record Date for Letters of Allocation (Final Record Date) Friday, 1 June
Rights Offer Shares issued Monday, 4 June
Dematerialised Shareholders’ accounts updated and debited by CSDP or Broker (in respect of payment for Rights Monday, 4 June
Offer Shares) at 09:00 on
Certificates distributed to Certificated Shareholders (in respect of the Rights Offer Shares) Monday, 4 June
Results of Rights Offer announced on SENS Monday, 4 June
Refund payments (if any) to Certificated Shareholders in respect of unsuccessful excess applications made Wednesday, 6 June
Dematerialised Shareholders’ accounts updated and debited by their CSDP or Broker (in respect of successful Wednesday, 6 June
excess applications)
Certificates distributed to Certificated Shareholders (in respect of successful excess applications) Wednesday, 6 June
1. All references to dates and times are to local dates and times in South Africa.
2. Any amendments to the above dates and times will be announced on SENS.
3. 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 Shareholder and their CSDP or Broker.
4. Share certificates may not be dematerialised or rematerialised between Wednesday, 16 May 2018 and Friday, 18 May 2018, both days
inclusive.
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 their accounts at the Transfer Secretaries.
9. Finalisation announcement
It is anticipated that the finalisation announcement for the Rights Offer will be released on SENS on Thursday, 10
May 2018.
10. Rights Offer Circular
Further details of the Rights Offer will be set out in the Rights Offer Circular which is expected to be distributed to
certificated Shareholders on Thursday, 17 May 2018 and to dematerialised Shareholders on Tuesday, 22 May
2018. The Rights Offer Circular will be made available on the Company’s website www.suninternational.com from
Monday, 14 May 2018.
Johannesburg
8 May 2018
Financial Advisor and Sponsor
Investec Bank Limited
South African Legal Advisor
Cliffe Dekker Hofmeyr Incorporated
International Legal Advisor
Cravath, Swaine & Moore LLP (as to US law)
Underwriter
Value Capital Partners Proprietary Limited
Date: 08/05/2018 03:37:00 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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