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Issue of circular and small related party transaction
ASTORIA INVESTMENTS LTD
(Incorporated in the Republic of Mauritius)
(Registration number 1297585 C1/GBL)
SEM share code: ATIL.N0000
JSE share code: ARA NSX share code: ARO
ISIN: MU0499N00007
("Astoria" or "the company")
ISSUE OF CIRCULAR AND SMALL RELATED PARTY TRANSACTION
1. POSTING OF CIRCULAR
Further to the announcements released on SENS and the SEM website on 12 December 2018, 18 January 2019 and
8 February 2019 respectively, Astoria shareholders are advised that the company will, on Monday, 18 February
2019, issue a circular to its shareholders (the "circular") relating to the adoption of a new investment policy,
a reduction of stated capital and transfer to non-distributable reserves, realisation of assets, a capital payment
and the termination of the investment management agreement (collectively, the "corporate actions").
A general meeting of shareholders will be held at 10:00 South African time/12:00 Mauritian time on Wednesday,
20 March 2019 at 5th Floor, La Croisette, Grand Baie, Mauritius, for the purposes of considering and, if deemed fit,
passing, with or without modification, the resolutions necessary to approve and implement the corporate actions
(the "general meeting").
The circular will be available on the company's website at http://www.astoria.mu/publications from Monday,
18 February 2019.
2. SMALL RELATED PARTY TRANSACTION
2.1. Introduction and rationale
2.1.1. In terms of the investment management agreement (the "IM agreement") between Astoria and
Anchor Capital (Mauritius) Limited (the "investment manager"), Astoria may terminate the IM
agreement on 183 days' notice in writing to the investment manager in the event that shareholders
of Astoria resolve to do so. In the event of termination of the IM agreement, Astoria would become
liable to pay the investment manager a termination fee equal to five times its aggregate gross fees
for the twelve-month period immediately preceding the termination (the "break fee"). The
investment manager has, however, informed Astoria that, in the event of termination of the IM
agreement, it would accept payment of USD 4.96 million, being a 25% discount to the break fee,
and waive the 183-day notice period provided for in the IM agreement.
2.1.2. On this basis, Astoria and the investment manager concluded a termination agreement on
31 January 2019 (the "termination agreement") in order to facilitate the implementation of the
termination of the IM agreement and payment of the reduced break fee, the salient terms of which
are set out in paragraph 2.2 below.
2.1.3. The board has been advised that implementation of the corporate actions, more fully described in the
circular, would not in of themselves cause or allow for termination of the IM agreement or trigger
an obligation to pay any termination fee to the investment manager.
2.1.4. However, the board of Astoria obtained irrevocable undertakings from shareholders holding circa
42.45% of Astoria shares entitled to vote on the resolution to terminate the IM agreement (39.29%
of Astoria shares in issue) that they will vote to support termination of the IM agreement by Astoria
and payment of the reduced break fee to the investment manager, conditional on implementation of
the capital payment.
2.1.5. A resolution to approve the termination of the IM agreement is contained in the notice of general
meeting referred to above. All resolutions contained in the notice of general meeting and required
to implement the corporate actions, are inter-conditional.
2.2. Salient terms of the termination agreement
2.2.1. In terms of the termination agreement, with effect from the date of the general meeting and against
payment by Astoria of the reduced break fee of USD 4.96 million, the IM agreement shall terminate.
The 183-day notice period contemplated in clause 24.2 of the IM agreement is to be waived.
2.2.2. Payment of the reduced break fee is in full and final settlement of any and all amounts of whatever
nature owing by Astoria to the investment manager in terms of and/or arising from the termination
of the IM agreement. The termination of the IM agreement will not, however, affect any fees which
were payable by Astoria to the investment manager up to and including the date on which the IM
agreement is terminated.
2.2.3. Anchor Capital (Pty) Limited ("Anchor South Africa") will not exercise the Astoria voting rights
which it controls, amounting to 23 204 493 Astoria shares, or 18.87% of the total Astoria shares in
issue, in respect of the resolutions to be proposed at the general meeting regarding the termination
of the IM agreement and the adoption of the new investment policy. Anchor South Africa will
provide the beneficial owners of the Astoria shares in respect of which it has been granted a
discretionary mandate by certain private clients (representing 11.43% of the total Astoria shares in
issue) the opportunity to exercise their discretion in respect of the voting rights in relation to their
shares.
2.2.4. The termination agreement shall become effective on the date that the conditions precedent are
fulfilled.
2.3. Conditions precedent
The termination agreement is subject to the following conditions precedent:
2.3.1. on or before the date of the general meeting, the investment manager providing written proof to the
board of directors of Astoria (excluding any board member who was nominated by the investment
manager or its related parties), which the board of directors of the company may accept or reject in
its sole discretion, acting reasonably, that:
2.3.1.1. the investment manager has generally done all such things and signed all such documents
that may be necessary or desirable to give effect to, or which may be incidental to, the
termination agreement; and
2.3.1.2. the investment manager has procured that Anchor Capital South Africa has complied with
all the obligations imposed on it by the termination agreement, specifically in relation to
voting restrictions placed on it; and
2.3.2. at the general meeting, the requisite majority of Astoria shareholders approving the termination of
the IM agreement.
2.4. Warranties
The warranties and undertakings provided are standard for a transaction of this nature.
2.5. Small related party considerations and fairness opinion
2.5.1. As the investment manager is a related party in relation to Astoria, the conclusion of the termination
agreement, and in particular agreement in respect of the reduced break fee, between the investment
manager and Astoria constitutes a small related party transaction in terms of paragraph 10.7 of the
JSE Listings Requirements.
2.5.2. Albeit that the termination of the IM agreement is subject to shareholder approval at the general
meeting, as required in accordance with its terms, the termination of the IM agreement and reduced
break fee as a small related party transaction is not subject to shareholder approval in terms of section
10 of the JSE Listings Requirements, provided that an independent expert has confirmed that the
quantum of the reduced break fee is fair insofar as Astoria shareholders are concerned. The board,
excluding Peter Armitage, who as a director of the investment manager is conflicted (the
"independent board"), will appoint an independent expert to advise and report to the independent
board on the fairness of the quantum of the reduced break fee by way of a fairness opinion prepared
in terms of the JSE Listings Requirements.
2.5.3. A further announcement will be published on or before Wednesday, 13 March 2019 detailing the
outcome of the fairness opinion.
3. SALIENT DATES AND TIMES
The salient dates and times relating to the corporate actions are set out below:
2019
Record date for shareholders on the Mauritian register to receive circular
(together with the notice convening the general meeting) Friday, 8 February
Record date for shareholders on the SA register to receive circular (together with
the notice convening the general meeting) Friday, 8 February
Announcement relating to the small related party transaction and the issue of the
circular (together with the notice convening the general meeting) released on
SENS and on the SEM website Friday, 15 February
Circular (together with the notice convening the general meeting) issued Monday, 18 February
Last day to trade on the Mauritian register in order to be eligible to vote at the
general meeting Monday, 11 March
Last day to trade on the SA register in order to be eligible to vote at the general
meeting Tuesday, 12 March
Announcement relating to the outcome of the fairness opinion prepared by the
independent expert released on SENS and on the SEM website on or before Wednesday, 13 March
Voting record date Friday, 15 March
Last day to lodge forms of proxy for the general meeting (by 10:00 South African
time/12:00 Mauritian time) Monday, 18 March
General meeting held at 10:00 South African time/12:00 Mauritian time Wednesday, 20 March
Results of the general meeting released on SENS and on the SEM website Wednesday, 20 March
Finalisation information including the USD to Rand conversion rate in relation
to the capital payment published on SENS and on the SEM website Tuesday, 2 April
Last day to trade cum to receive the capital payment Tuesday, 23 April
Astoria shares trade ex entitlement to receive the capital payment Wednesday, 24 April
Record date to receive the capital payment Friday, 26 April
Capital payment to Astoria shareholders Monday, 29 April
Notes:
1. The above dates and times are subject to change. Any changes will be released on SENS and the SEM website
and, if required, published in the press.
2. Shareholders should note that as transactions in Astoria shares on the SA register are settled in the electronic
settlement system used by Strate, settlement of trades takes place three business days after such trade. Therefore,
shareholders who acquire Astoria shares after Tuesday, 12 March 2019 will not be eligible to vote at the general
meeting.
3. If the general meeting is adjourned or postponed, forms of proxy submitted for the initial general meeting will
remain valid in respect of any adjournment or postponement of the general meeting.
4. Share certificates may not be dematerialised or rematerialised between Wednesday, 24 April 2019 and Friday,
26 April 2019, both days inclusive.
5. Transfers of shares between sub-registers in South Africa and Mauritius may not take place between
Wednesday, 24 April 2019 and Friday, 26 April 2019, both days inclusive.
Astoria has primary listings on the Stock Exchange of Mauritius and the Alternative Exchange of the JSE, and a
secondary listing on the main board of the Namibian Stock Exchange.
This notice is issued pursuant to SEM Listing Rules 11.3 and 11.17, and Rule 5(1) of the Securities (Disclosure
Obligations of Reporting Issuers) Rules 2007. The Board accepts full responsibility for the accuracy of the information
contained in this announcement.
15 February 2019
Joint corporate advisor and JSE designated advisor
Java Capital
NSX sponsor
Namibia Equity Brokers
Joint corporate advisor and Mauritian company administrator
Osiris International Group
Date: 15/02/2019 04:14:00 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.