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Update on the proposed voluntary share repurchase and proposed delisting of Zarclear
ZARCLEAR HOLDINGS LIMITED
(formerly Sandown Capital Limited)
(Incorporated in South Africa)
(Registration number 2000/013674/06)
Share code: ZCL ISIN: ZAE000262820
(“Zarclear” or the “Company”)
UPDATE ON THE PROPOSED VOLUNTARY SHARE REPURCHASE
PROPOSED DELISTING OF ZARCLEAR
1. Introduction and proposed delisting
Shareholders are referred to the announcement released on SENS on 28 February 2020 wherein the Company
advised shareholders of its intention to make an offer to its shareholders to voluntarily tender for the repurchase
of their existing shareholding in the Company (the “share repurchase offer”) at an offer price of R4.40 per share
(the “share repurchase offer consideration”).
Shareholders are advised that, having regard to the impact that the COVID-19 pandemic has had, and is
anticipated to continue to have on equity capital markets for an extended period, the costs and expenses associated
with its JSE listing are no longer justified and accordingly, the board of Zarclear (the “Board”) has resolved that,
subject to securing the requisite shareholder and regulatory approvals, it would be in the best interests of Zarclear
and its shareholders to seek a delisting of Company’s shares from the Main Board of the JSE under the voluntary
delisting regime provided for under the JSE Listings Requirements (the “delisting”).
In compliance with the JSE Listings Requirements, the delisting must be accompanied by an offer (that an
independent expert has confirmed to be fair to shareholders) which is to be made to holders of all Zarclear’s
securities (the “ZCL shares”). Zarclear will therefore proceed with its envisaged share repurchase offer to
repurchase all, or a portion of, the ZCL shares from any shareholder who, post the approval of the delisting, either
cannot or does not wish to continue to hold ZCL shares in an unlisted structure, at the share repurchase offer
consideration.
The share repurchase offer will be made in compliance with the relevant provisions of the Companies Act 71
of 2008 (the “Companies Act”), the Takeover Regulations promulgated thereunder (the “Takeover
Regulations”) and the JSE Listings Requirements.
The delisting and the share repurchase offer will be implemented on the basis that shareholders will be afforded
an opportunity either to elect to monetise their investment in Zarclear at a fair price or to continue to hold shares
in Zarclear in an unlisted environment.
2. Rationale for the share repurchase offer and delisting
The Board is of the opinion that Zarclear’s listing on the JSE no longer benefits the Company due to:
2.1. the significant costs and expenses associated with the listing;
2.2. poor market ratings and lack of liquidity achieved by small capitalisation investment holding companies;
and
2.3. the Company’s investment strategy being best served in an unlisted environment.
The share repurchase offer will allow those shareholders who wish to monetise their shareholding the opportunity
to do so at a price that reflects a meaningful premium to the recently traded price of Zarclear shares and will also
benefit those shareholders who are committed to the Company’s strategy and who wish to remain invested in the
Company.
3. JSE and Companies Act requirements for the share repurchase offer and delisting
The share repurchase offer, if accepted by shareholders holding at least 11 303 285 Zarclear shares, will result in
Zarclear acquiring more than 5% of the Zarclear shares in issue. Accordingly, in terms of section 48(8)(b) of the
Companies Act, the decision of the Board to acquire the Company’s shares in terms of the share repurchase offer
will be subject to the requirements of sections 114 and 115 of the Companies Act which provide, inter alia, that
the decision by the Board in respect of the share repurchase offer must be approved by a special resolution adopted
by persons entitled to exercise voting rights on the matter. In addition, Zarclear is also required to obtain a fair
and reasonable opinion from an independent expert in terms of the provisions of section 114(3) (as read with
section 48(8)(b) and section 115) of the Companies Act.
As the share repurchase offer is a pro rata repurchase by Zarclear of its shares from all its shareholders,
shareholder approval in terms of the JSE Listings Requirements is not required for the share repurchase offer
(save to the extent as required in terms of section 48(8) of the Companies Act).
The delisting will be conditional on securing the approval of more than 50% of the votes of all shareholders
present or represented by proxy at a general meeting, excluding any controlling shareholder, its associates and
any party acting in concert, and any other party which the JSE deems appropriate, being cast in favour of such
delisting resolution.
4. Termination of concert party arrangement
Given the Board’s decision to delist the Company, the rationale for the establishment of a concert party
arrangement amongst Legae Peresec Capital Proprietary Limited, Hampden Capital Proprietary Limited and
Zolospan Proprietary Limited in respect of Zarclear has fallen away and, in consequence, such shareholders have
formally notified the Takeover Regulation Panel that they have come out of concert. As such, whilst the Company
will proceed to make the share repurchase offer, it is not anticipated that any mandatory offer will be triggered
under section 123 of the Companies Act as a result of the share repurchase offer.
5. Conditions precedent to the share repurchase offer and delisting
The share repurchase offer and delisting will be subject to the following conditions precedent:
5.1. an independent expert being appointed by Board (that is acceptable to the JSE) and providing the Board
with an opinion in which the independent expert expresses the view that the share repurchase offer and
the share repurchase offer consideration is fair and reasonable to shareholders;
5.2. the board unanimously resolving to proceed with the share repurchase offer in accordance with section
48(2) as read with section 46 of the Companies Act;
5.3. the Board unanimously resolving to proceed with the delisting and confirming that the offer is fair and
reasonable to shareholders;
5.4. the share repurchase offer and delisting being approved by the requisite majority of Zarclear shareholders
in terms of the Companies Act and JSE Listings Requirements, respectively; and
5.5. to the extent necessary, the securing of any regulatory approvals required.
6. Appointment of an independent expert
The Board has appointed Nodus Capital TS Proprietary Limited (“Nodus”) to provide the independent board with
its opinion as to whether the terms of the offer are fair and reasonable to Zarclear shareholders, in accordance
with the Takeover Regulations and the JSE Listings Requirements.
Nodus’ full report, as well as the independent board’s opinion on the offer and offer consideration, will be
included in the circular to be posted to Zarclear shareholders.
7. Documentation and timing in relation to the share repurchase offer
Full details of the share repurchase offer and delisting will be set out in a circular which will be distributed by
Zarclear to its shareholders in due course, and will include the opinion of the independent expert in respect of the
share repurchase offer, a notice of general meeting of Zarclear shareholders to approve the share repurchase offer
and delisting, and the applicable salient dates and times relating to the share repurchase offer and delisting.
8. Zarclear Board responsibility statement
The Zarclear Board collectively and individually accepts responsibility for the accuracy of the information
contained in this announcement and certifies that, to the best of its knowledge and belief, the information
contained in this announcement relating to Zarclear is true, this announcement does not omit anything that is
likely to affect the import of such information, and that all reasonable enquiries to ascertain such information has
been made.
13 May 2020
Corporate advisor and sponsor to Zarclear
Java Capital
Date: 13-05-2020 05:45:00
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