ALVIVA HOLDINGS LIMITED - Specific Repurchase Of Treasury Shares, Referred To As Tranche 2 Shares, By Alviva From Alviva Treasury Services

Release Date: 29/08/2018 16:53
Code(s): AVV
 
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Specific Repurchase Of Treasury Shares, Referred To As Tranche 2 Shares, By Alviva From Alviva Treasury Services

Alviva Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1986/000334/06
Share Code: AVV
ISIN: ZAE000227484
(“Alviva” or “the Company”)

-  Specific repurchase of treasury shares, referred to as Tranche 
   2 Shares, by Alviva from Alviva Treasury Services Proprietary 
   Limited (“Alviva Treasury Services”), to be implemented in 
   terms of the JSE Listings Requirements and sections 48(8)(b), 
   114 and 115 of the Companies Act, 2008 Act No. 71 of 2008), as 
   amended (“the Companies Act”); and 
-  subsequent delisting of the Tranche 2 Shares from the JSE 
   Limited (“JSE”) and cancellation thereof.

1.  INTRODUCTION
    Alviva shareholders, (“Shareholders”), are referred to the 
    SENS announcement dated 30 September 2016 where they were 
    advised that the Board of Directors of the Company resolved,
    subject to Shareholder approval being obtained, to repurchase 
    ordinary shares held by Alviva Treasury Services as treasury 
    shares (“the Specific Repurchase Shares”) in two separate 
    divisible tranches, with:
    -  the Specific Repurchase Tranche 1, which was implemented 
       pursuant to the 2016 Annual General Meeting; and
    -  the balance of the Specific Repurchase Shares, being the 
       Tranche 2 Shares, being implemented pursuant to the 2018 
       Annual General Meeting.

    Shareholders are hereby advised that Alviva concluded a share 
    repurchase agreement on 28 August 2018 (“Tranche 2 Agreement”) 
    with Alviva Treasury Services, a subsidiary of Alviva, for the 
    repurchase of Tranche 2 Shares. The Board of Directors of the 
    Company resolved, subject to Shareholder approval being 
    obtained at the 2018 Annual General Meeting, to repurchase the 
    balance of the Specific Repurchase Shares. 

    As at Tuesday, 28 August 2018, Alviva Treasury Services held a 
    total of 6 500 000 Alviva ordinary shares as treasury shares, 
    constituting 4,13% of the Company’s issued share capital, 
    being the Tranche 2 Shares. The number of treasury shares 
    repurchased in 2016 in terms of Specific Repurchase Tranche 1 
    was 5 569 974 shares, (“Tranche 1 Shares”). The Tranche 1 
    Shares and Tranche 2 Shares, collectively, amount to 
    12 069 974 Alviva ordinary shares held as treasury shares, 
    constituting 6,58% of the Company’s issued share capital, 
    being the Specific Repurchase Shares.

    As this is more than 5% of the Company’s issued share capital, 
    the Specific Repurchase Tranche 2 is subject to the 
    requirements of sections 48(8)(b), 114 and 115 of the Companies 
    Act and paragraph 5.69 of the JSE Listings Requirements. In 
    accordance with sections 114(e), the Specific Repurchase 
    Tranche 2 will be implemented by way of a scheme of 
    arrangement. In terms of section 115(2)(a) of the Companies 
    Act, Specific Repurchase Tranche 2 requires the prior approval 
    of Shareholders in general meeting by means of a special 
    resolution. 

    The notice of Annual General Meeting, to form part of the 2018 
    Integrated Annual Report, will include a special resolution 
    relating to the Specific Repurchase Tranche 2 and will be 
    posted to shareholders as per paragraph 8 below.

2.  SALIENT DETAILS OF THE SPECIFIC REPURCHASE TRANCHE 2
    The Specific Repurchase Tranche 2 will be implemented at a 
    VWAP of Alviva ordinary shares traded on the JSE over the 30 
    (thirty) trading days immediately prior to the date of 
    conclusion of the Tranche 2 Agreement, being the Specific 
    Repurchase Tranche 2 Repurchase Price. As at 28 August 2018, 
    being the date on which the Tranche 2 Agreement was signed by 
    Alviva and Alviva Treasury Services, the Specific Repurchase 
    Tranche 2 Repurchase Price is R18,36 per ordinary share. 
    Accordingly, the total consideration payable by Alviva to 
    Alviva Treasury Services in respect of the Specific Repurchase 
    Tranche 2 amounts to R119 340 000.

    As the Specific Repurchase Tranche 2 is intra-Group, no change 
    in the Group’s financial cash resources will transpire as a 
    result of the implementation of same and the financial effects 
    of the Specific Repurchase Tranche 2 are minimal. 
    Distributable reserves will be used to settle the Specific 
    Repurchase Tranche 2 Consideration.

    Following the Specific Repurchase Tranche 2 being implemented, 
    the Tranche 2 Shares so repurchased will be delisted from the 
    JSE by the Company and then cancelled.

3.  FINANCIAL IMPACT OF THE SPECIFIC REPURCHASE TRANCHE 2
    -  The impact of the Specific Repurchase Tranche 2 on the    
       Issued Share Capital of the Company is that the ordinary  
       shares in issue will be reduced by 6 500 000 to 
       150 717 917.
    -  The Company’s Share capital account will be reduced by 
       R65 000,00 (being the 6 500 000 Ordinary Shares with a par 
       value of 1 (one) cent per ordinary share).
    -  The Company’s reserves will be reduced by the difference 
       between the purchase price and the par value of the 
       Ordinary Shares, being 1 (one) cent per Ordinary Share as 
       the Company will elect to make payment of the Specific 
       Repurchase Tranche 2 Consideration out of distributable 
       reserves 1 which will constitute a “dividend” as per the 
       Income Tax Act No. 58 of 1962. 

    The Specific Repurchase Tranche 2 Consideration will be paid, 
    in full, in accordance with the terms of the Specific  
    Repurchase Tranche 2 without regard to any lien, right of set-
    off, counterclaim or other analogous right to which Alviva may 
    otherwise be, or claim to be, entitled against any Alviva 
    Treasury Services.

4.  RATIONALE FOR THE SPECIFIC REPURCHASE
    The Board resolved to repurchase, delist and cancel the 
    Specific Repurchase Shares in order to:
    -  simplify the Group structure;
    -  eliminate accounting and regulatory complexities arising 
       from treasury shares in general; and
    -  save additional costs of administration.

5.  CONDITIONS PRECEDENT
    Implementation of the Specific Repurchase Tranche 2 is subject 
    to the fulfilment of the following conditions precedent:
    -  the approval by Shareholders at the Annual General Meeting 
       by way of the special resolution, as required by paragraph 
       5.69(b) of the JSE Listings Requirements and section 
       48(8)(b) of the Companies Act, adopted in accordance with 
       the requirements of sections 114 and 115 of the Companies 
       Act. 
    -  to the extent and if required, the approval of the 
       implementation of the special resolution by the Court in 
       terms of section 115 of the Companies Act;
    -  if applicable, Alviva not treating the special resolution 
       as a nullity, as contemplated in terms of section 115(5)(b) 
       of the Companies Act; and
    -  the receipt of unconditional approvals, consents or waivers 
       from all regulatory bodies, including the JSE.

    Should all of the conditions precedent referred to above not 
    have been fulfilled or waived (if possible), as the case may 
    be, following the conclusion of the Annual General Meeting to 
    be held on or about 21 November 2018, or any adjournment 
    thereof, or by such other later date as may be determined by 
    Alviva and subject to the approval of the Takeover Regulation 
    Panel (“TRP”) and JSE (if necessary), the Specific Repurchase 
    Tranche 2 will not become operative and shall be of no force 
    or effect. An announcement will be published on SENS and in 
    the South African press as soon as practicably possible 
    advising on the fulfilment or otherwise of the above 
    conditions precedent and the ramifications and effects 
    thereof.

6.  THE COMPANY’S AUTHORISED AND ISSUED SHARE CAPITAL
    Set out in the table below is the authorised and issued share 
    capital of the Company before and after the implementation of 
    the Specific Repurchase Tranche 2:

    Before the Specific Repurchase Tranche 2:
                                                                 R
    Authorised share capital
    300 000 000 ordinary shares of 1 cent each           3 000 000
    Issued share capital
    157 217 917 ordinary Shares of 1 cent each           1 572 179
    
    Prior to the implementation of the Specific Repurchase Tranche 
    2, the Company holds 6 500 000 Alviva Ordinary Shares as 
    treasury shares, being the Tranche 2 Shares. Alviva Shared 
    Management Services Proprietary Limited holds 4 785 000 as 
    treasury shares, constituting 3,04% of the issued share 
    capital.

    After the Specific Repurchase Tranche 2:
                                                                 R
    Authorised share capital
    300 000 000 ordinary shares of 1 cent each           3 000 000
    Issued share capital
    150 717 917 ordinary shares of 1 cent each           1 507 179

    Following the implementation of Specific Repurchase Tranche 2, 
    no treasury shares will be held by Alviva Treasury Services. 
    Alviva Shared Management Services Proprietary Limited will 
    continue to hold 4 785 000 as treasury shares, constituting 
    3,17% of the issued share capital.
  
7.  OPINIONS AND RECOMMENDATIONS 
    The Board has appointed St John Capital Proprietary Limited, 
    the Independent Expert, to provide a report to Shareholders in 
    terms of section 114(3) of the Company’s Act. The Independent 
    Expert is of the opinion that the terms and conditions of the 
    Specific Repurchase Tranche 2 are fair and reasonable to 
    Shareholders.

    The Directors have carefully considered the terms and 
    conditions of the Specific Repurchase Tranche 2 and, after 
    taking into account the opinion of the Independent Expert, 
    have concluded that such terms are fair and reasonable, and 
    accordingly recommend that Shareholders vote in favour of the 
    resolutions to be proposed at the Annual General Meeting. All 
    of the Directors having material direct or indirect beneficial 
    holdings in shares, intend to vote in favour of the 
    resolutions to be considered at the 2018 Annual General 
    Meeting to implement the Specific Repurchase Tranche 2. 

8.  THE SALIENT DATES AND TIMES FOR THE PROPOSED SPECIFIC 
    REPURCHASE TRANCHE 2
    The circular, containing full details of the Specific 
    Repurchase Tranche 2, as well as the salient dates and times 
    for the Annual General Meeting, will be incorporated in the 
    2018 Integrated Annual Report. The salient dates and times 
    will also be published at time of posting of the circular and 
    2018 Integrated Annual Report to Shareholders. The 2018 
    Integrated Annual Report is expected to be posted on or about 
    Friday, 28 September 2018.

9.  TRP EXEMPTION
    In terms of section 119(6)(c) of the Companies Act, the TRP 
    has unconditionally exempted all parties from compliance with 
    the provisions of Part B and C of the Companies Act, and the 
    Takeover Regulations in respect of the Specific Repurchase 
    Tranche 2. A copy of the letter from the TRP granting the 
    exemption is made available for inspection at the Company’s 
    registered office.

Midrand
29 August 2018

Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited

Legal Advisors: Tugendhaft Wapnick Banchetti and Partners

Independent Expert: St John Capital Proprietary Limited




Date: 29/08/2018 04:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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