Update on Early Bond Redemption and renewal of Cautionary announcment
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
Share code: AEG
Share ISIN: ZAE000194940
JSE 2019 Convertible Bond Code: AEGCB
JSE 2019 Convertible Bond ISIN: ZAE000194940
("Aveng", "the Company")
UPDATE ON EARLY BOND REDEMPTION AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
Aveng Shareholders are referred to the announcements released on SENS on Thursday, 2 August 2018
and earlier today respectively, in which Aveng announced its intention to proceed with the implementation
of the Capital Markets Transaction and specifically the Early Bond Redemption. Capitalised terms herein
are as defined in previous SENS announcements.
The current debt levels within Aveng are considered to be unsustainable, and in particular the Existing
Convertible Bonds are creating significant constraints on the Aveng liquidity position. It is therefore
imperative for Aveng to early redeem the Existing Convertible Bonds in order to ensure the future
sustainability of the Company.
Aveng is pleased to announce the proposed terms of the Early Bond Redemption which is subject to final
Shareholder and Existing Convertible Bondholder approval. The settlement of the Existing Convertible
Bonds will consist of:
• The specific buyback of up to R643 million of Existing Convertible Bonds at a price of 70% of par,
for a price of up to R450 million (“Specific Bond Buyback”). The Specific Bond Buyback is
conditional on the final Participating Bondholders (as defined in paragraph 2.3.1) shareholding as
per paragraph 2.3.1.
• The issue of a new debt instrument of up to R450 million to Participating Bondholders (as defined
in paragraph 2.3.1), the terms of which will rank pari passu with Aveng bank debt.
• The redemption of all outstanding Existing Convertible Bonds at par through a specific issue of
Aveng Ordinary Shares at 10c, equivalent to the Rights Offer Price. The number of shares to be
issued is dependent on the final size of the Specific Bond Buyback (“Specific Issue”).
The Early Bond Redemption is conditional on:
• Approval from Existing Convertible Bondholders to pass the necessary resolutions to redeem the
Existing Convertible Bonds in the issue of Aveng Ordinary Shares; and
• Approval from Aveng Shareholders to pass the necessary resolutions to give effect to the Specific
Issue and the matters incidental thereto.
The Specific Bond Buyback and the Early Bond Redemption will reduce Aveng’s total debt position to
c.R2.45 billion, assuming all facilities are fully drawn, a c.40% reduction to current debt.
The circular which contains details of the Specific Issue and incorporating a notice of general meeting
(“General Meeting”), will be distributed to Aveng Shareholders on Friday, 10 August 2018.
2 EARLY BOND REDEMPTION
To enable the Early Bond Redemption, Aveng obtained the approval from Existing Convertible Bondholders
for the changes required to the terms and conditions at a special bondholder meeting held on Tuesday, 3
Among other, the amendments to the Existing Convertible Bond terms and conditions allow for:
• the Existing Convertible Bonds to be redeemed prior to 24 July 2019, at the option of Aveng,
by the issue of new Aveng Ordinary Shares to the Existing Convertible Bondholders or in
cash, or a combination thereof;
• to the extent Existing Convertible Bonds are to be redeemed by the issue of new Aveng
Ordinary Shares, such issue is to be done at the Rights Offer Price; and
• the interest due in respect of each Bond interest period will be payable in arrears on the
interest payment date in respect of such interest period, either in cash or by capitalising same
(in which event the principal amount of each Bond will be deemed to have been increased
At a general meeting of Shareholders held on Tuesday, 29 May 2018, Shareholders approved the following
resolutions in order to implement the Specific Issue:
• authorisation to convert par value shares to no par value shares and the amendment of
the MOI to take account of the conversion;
• the increase of Aveng’s authorised share capital from 882 034 263 Aveng Ordinary Shares
to 180 882 034 263 Aveng Ordinary Shares by the creation of a further 180 000 000 000
Aveng Ordinary Shares; and
• the granting of authority to the Directors to issue such number of new Aveng Ordinary
Shares as may be required for the purposes of implementing the Capital Markets
Transaction, including authorisation to issue new Aveng Ordinary Shares for that purpose
with voting power that may, upon issue, exceed 30% of the existing power of the Aveng
Ordinary Shares currently in issue.
2.2 Overview of the Early Bond Redemption
Aveng intends to early redeem the outstanding Existing Convertible Bonds, together with the accrued
interest on the Existing Convertible Bonds (“Accrued Interest”), as soon as practically possible by the issue
of new Aveng Ordinary Shares in accordance with the amended terms and conditions of the Existing
Aveng notified Existing Convertible Bondholders on Tuesday, 3 July 2018 that the interest for the interest
period ending 24 July 2018, would be capitalised in accordance with the amended terms and conditions,
increasing the principal amount of the Existing Convertible Bonds to R2 072.5 million. If all of these Existing
Convertible Bonds remain outstanding on the date that the Early Bond Redemption is to be implemented,
together with the Accrued Interest which is estimated to be c.R30 million, the total amount to be redeemed
would be R2 102.5 million.
2.3 Terms of the Existing Convertible Bond settlement and the Early Bond Redemption
2.3.1 Specific Bond Buyback
Bilateral discussions with larger shareholders and bondholders have indicated that they have internal
statutory limits with regards to maximum shareholding levels in Aveng (“Maximum Individual
Shareholding”). Aveng has structured the transaction to ensure that no single shareholder will own a
shareholding in Aveng in excess of the Maximum Individual Shareholding. Should the Early Bond
Redemption through the Specific Issue result in a shareholder breaching the Maximum Individual
Shareholding, Aveng will repurchase sufficient Existing Convertible Bonds at a price of 70% of par to ensure
that no individual Existing Convertible Bondholder’s shareholding will result in a breach of the Maximum
Individual Shareholding pursuant to the Specific Issue.
Based on current shareholding and bondholding levels, Aveng anticipate to repurchase up to R643 million
of Existing Convertible Bonds for up to R450 million at a price of 70% of par from potential Existing
Convertible Bondholders (“Participating Bondholders”), depending on further engagement with Existing
2.3.2 New debt instrument
To fund the Specific Bond Buyback, Aveng will issue a new debt instrument of up to R450 million, which
instrument will be underwritten by Participating Bondholders.
The new debt instrument will rank pari passu with the existing bank debt and the terms of the instrument,
including pricing, maturity and repayment profile will be equivalent to that of the bank debt.
2.3.3 Specific Issue
All outstanding Existing Convertible Bonds following the Specific Buyback (at least R1 429 million), together
with the Accrued Interest (estimated to be around R30 million), totaling R1 459 million, will be redeemed
through a specific issue of Aveng Ordinary Shares at the Rights Offer Price. The Specific Issue will thus
consist of at least 14 596 428 571 Aveng Ordinary Shares.
Should Participating Bondholders reduce their bondholding before the Specific Issue and therefore not
breach the Maximum Individual Shareholding, Aveng will settle the full R2 072.5 million of Existing
Convertible Bonds, together with the Accrued Interest in the issue of new Aveng Ordinary Shares.
Aveng will release an announcement on SENS containing the final quantum of Existing Convertible Bonds
repurchased in the secondary market, the quantum of the new debt instrument and the number of shares
to be issued pursuant to the Specific Issue, together with the financial effects thereof, prior to Wednesday,
29 August 2018, the day before the Existing Convertible Bondholder meeting.
The Early Bond Redemption is conditional on:
• Approval from Existing Convertible Bondholders at a bondholder meeting to be held on Thursday,
30 August 2018 to pass the necessary resolutions to redeem the Existing Convertible Bonds in the
issue of Aveng Ordinary Shares; and
• Approval from Aveng Shareholders to pass the necessary resolutions at the General Meeting to be
held on Monday, 10 September 2018 to give effect to the Specific Issue and the matters incidental
The circular which contains details of the Specific Issue and incorporating a notice of general meeting will
be distributed to Aveng Shareholders on Friday, 10 August 2018.
A bondholder notice, incorporating a notice of general meeting will be distributed to Existing Convertible
Bondholders today, Wednesday, 8 August 2018.
3 NOTICE OF GENERAL MEETING AND SALIENT DATES
Notice is hereby given that the General Meeting will be held at the Company’s registered office, Aveng
Park, 1 Jurgens Street, Jet Park, Boksburg, at 09.00am on Monday, 10 September 2018 in order to pass
the resolutions required to approve the Specific Issue. Salient dates pertaining to the General Meeting will
be published in the notice of general meeting, which will be posted to shareholders on Friday, 10 August
2018 and are detailed below.
Record date to be entitled to receive the Circular incorporating the notice convening
Friday, 3 August
the General Meeting
Circular and Notice of General Meeting posted to Shareholders and announced on
Friday, 10 August
Last day to trade in order to be eligible to attend and vote at the General Meeting Tuesday, 28 August
Meeting of Existing Convertible Bondholders to be held at 09:00 on Thursday, 30 August
Record date to participate in and vote at the General Meeting Friday, 31 August
Last day and time to give notice to participate in the General Meeting electronically
Thursday, 6 September
by 12:00 on
Last day to lodge forms of proxy with the Transfer Secretaries to vote at the General
Thursday, 6 September
Meeting by 09:00 on (see note 2 below)
General Meeting of Shareholders to be held at 09:00 on Monday, 10 September
Results of General Meeting announced on SENS on Monday, 10 September
1. The dates and times provided for in this Circular are subject to amendment. Any material amendment will be published on SENS.
2. Proxy forms should be forwarded to be received for the orderly arrangement of matters on the date of the General Meeting (but
not required) by the company’s transfer secretaries, by 09:00 on Thursday, 6 September 2018 for administrative purposes (or
alternatively to be handed to the chairperson of the General Meeting prior to its commencement).
4 RENEWAL OF CAUTIONARY ANNOUNCEMENT
The Capital Markets Transaction is still ongoing and accordingly shareholders of Aveng are advised to
continue exercising caution when dealing in their securities until the full details pertaining to the Early Bond
Redemption are announced.
8 August 2018
Financial advisor and transaction sponsor for the Capital Markets Transaction
Rand Merchant Bank (A division of FirstRand Bank Limited)
Absa Bank Limited, acting through its corporate and investment banking division
Group Executive: Strategy & Investor Relations
Tel: 011 779 2979
Date: 08/08/2018 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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