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YRK - York - Terms of the rights offer and withdrawal of autionary
announcement
York Timber Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1916/004890/06)
ISIN number: ZAE000133450
Share code: YRK
("York" or "the Company")
Terms of the Rights Offer and withdrawal of cautionary announcement
1. Introduction
Ordinary and convertible non-redeemable cumulative preference
shareholders of York ("Shareholders") are referred to the further
cautionary announcement dated 5 October 2009 whereby Shareholders
were, inter alia, advised that the board of directors of the
Company ("the Board") has resolved to recapitalise the Company
through the injection of additional equity capital by means of a
rights offer ("the Rights Offer").
2. Rationale for the Rights Offer
On 30 September 2009, in conjunction with the release of its
reviewed condensed consolidated provisional financial statements
for the year ended 30 June 2009, York announced that the Company
intended raising R500million through the Rights Offer, in order to,
inter alia, reduce its debt burden and restructure its balance
sheet.
The restructuring of the balance sheet will allow York to:
* reduce the gearing ratio to a level acceptable to the
Board;
* provide the Group with additional financial resources to
fund capital expenditure; and
* improve York`s overall financial and operational
flexibility.
The Company intends to utilise the R500million raised through the
Rights Offer to repay its debt as follows:
* R450million will be utilised to reduce existing debt in the
Company in the following proportions:
- 62% or approximately R279million will be used to reduce the senior
secured debt;
- 38% or approximately R171million will be used to reduce the
mezzanine debt; and
* R50million will be used to fund capital expenditure planned
by the Company.
Following the Rights Offer, gearing (debt:equity) will be reduced
from approximately 88% to approximately 40%.
3. Terms of the Rights Offer
In terms of the Rights Offer, 250 000 000 York ordinary shares
("the Rights Offer Shares") will be offered to Shareholders at a
subscription price of 200 cents per Rights Offer Share on the basis
of 307.72792 Rights Offer Shares for every 100 ordinary shares or
for every 100 preference shares held on the record date of the
Rights Offer, being Friday, 20 November 2009, raising a total
amount of R500million.
Excess subscriptions are permitted and there is no minimum
subscription.
4. Undertakings and underwriting
The following ordinary shareholders of York, representing
approximately 73.7% of the issued ordinary share capital of York,
have irrevocably undertaken to follow their rights in terms of the
Rights Offer. Accordingly, York is assured of a minimum
subscription of R355million.
Number of Percentage
Shareholder shares (%)
eligible to
vote
The Industrial Development 23 333 333 29.8
Corporation of South Africa
Limited
Lereko Metier Capital Growth 13 109 033 16.7
Fund
Bridge Creek Trading 10 7 200 000 9.2
(Proprietary) Limited
CoroCapital Limited 5 233 620 6.7
Coronation Asset Management 5 000 000 6.4
(Proprietary) Limited
Auburn Avenue Trading 55 2 800 000 3.6
(Proprietary) Limited
Conexus Investment Fund Limited 426 947 0.5
Calshelf Trading 101 333 333 0.4
(Proprietary) Limited
Terracina Investments 333 334 0.4
(Proprietary) Limited
TOTAL 57 769 600 73.7
In addition to the above undertakings and in order to ensure that
the Rights Offer is fully underwritten, the following parties will
be underwriting the Rights Offer for the amounts reflected below:
Underwriter Amount
underwritten
Lereko Metier Capital Growth Fund R17 000 000
CoroCapital Limited R30 000 000
Coronation Asset Management R98 000 000
(Proprietary) Limited
TOTAL R145 000 000
5. Unaudited pro forma financial effects
The table below sets out the pro forma financial effects of the
Rights Offer. The unaudited pro forma income statement and balance
sheet have been prepared for illustrative purposes only and,
because of their nature, may not give a true reflection of York`s
financial position, changes in equity and results of operations or
cash flows.
The unaudited pro forma financial information is intended to
provide information about how the Rights Offer may have affected
the income statement and balance sheet of York for the period
ended 30 June 2009 had the Rights Offer been effected on 1 July
2008 for the income statement effects and 30 June 2009 for the
balance sheet effects.
Before After the Change
the Rights (%)
Right Offer 2,3
Offer1
Earnings per share (296) (54) 82
(cents)
Headline earnings per (254) (44) 83
share ("HEPS") (cents)
Diluted HEPS (cents) (254) (44) 83
Net Asset Value per 1722 561 (67)
share (cents)
Tangible Net Asset Value 939 374 (60)
per share (cents)
Number of York shares in 78 370 328 370 319
issue (`000)
Weighted Average number 78 370 328 370 319
of shares (`000)
Trading Gearing (%) 88 40
55
Notes:
1. The "Before the Rights Offer" column is based on the reviewed
condensed consolidated provisional financial statements of York for the
year ended 30 June 2009.
2. The "After the Rights Offer" column has been adjusted to take into
account the issue of the Rights Offer Shares.
3. The financial effects are calculated based on the following
assumptions:
- York raises R500 million in terms of the Rights Offer;
- directly attributable transaction costs of R4.3million and
underwriting fees of R4.4million have been applied against
share premium;
- the cash proceeds were received and the Rights Offer Shares
issued on 1 July 2008 for income statement purposes;
- R450 million of the proceeds from the Rights Offer were
used to repay debt facilities, resulting in a 43% interest
savings and an adjustment of R78.1 million; and
- the cash proceeds were received and the Rights Offer shares
issued on 30 June 2009 for balance sheet purposes.
6. Conditions precedent
The implementation of the Rights Offer is subject to the following
conditions precedent being fulfilled on or about Friday, 6 November
2009.
* approval being obtained from the JSE Limited ("JSE") for the
Rights Offer circular;
* approval being obtained from the JSE for the application for
listing in terms of the Letters of Allocation and the
application for listing of the Rights Offer Shares; and
* the necessary approvals and registrations being obtained for
the Rights Offer circular and form of instruction from the
Companies and Intellectual Property Registration Office of
South Africa.
7. Salient dates and times
2009
Last day to trade in shares in
order to settle trades by the
record date for the Rights Offer Friday, 13 November
and to qualify to participate in
the Rights Offer (cum rights)
Listing and trading of letters of
allocation on the JSE while shares Monday, 16 November
trade ex-rights commences at 09h00
on
Record date for the Rights Offer
for purposes of determining
shareholders entitled to Friday ,20 November
participate in the Rights Offer at
the close of business on
Rights Offer circular and revised
listing particulars posted to Monday, 23 November
shareholders
Rights Offer opens at 09h00 on Monday, 23 November
Dematerialised shareholders will
have their accounts at their CSDP
or broker automatically credited Monday, 23 November
with their letters of allocation
Certificated shareholders will have
their letters of allocation
credited to an electronic register Monday, 23 November
at the transfer secretaries
Last day to trade in letters of
allocation in order to settle
trades by the close of the Rights Friday, 4 December
Offer and participate in the Rights
Offer at the close of business
Last day for forms of instruction
of certificated shareholders
wishing to sell all or part of Friday, 4 December
their entitlement to be lodged with
the transfer secretaries by 12h00
on
Listing of the maximum number and
trading of Rights Offer shares on Monday, 7 December
the JSE commences at 09h00 on
Record date for letters of Friday, 11 December
allocation
Rights Offer closes at 12h00 and
payment to be made and forms of
instruction lodged by certificated
shareholders with the transfer Friday, 11 December
secretaries by 12h00 on
CSDP/Broker accounts credited with
Rights Offer shares and debited
with any payments due in respect of Monday, 14 December
dematerialised Rights Offer shares
Rights Offer share certificates
posted to certificated shareholders Monday, 14 December
on or about
Results of Rights Offer released on Monday, 14 December
SENS
Results of Rights Offer published Tuesday, 15 December
in the press
Refund cheques, if applicable,
posted to certificated
shareholders, if applicable, in Tuesday, 15 December
respect of excess applications, on
or about
Note:
i. No share certificates may be dematerialised or rematerialised
between Monday, 16 November 2009 and Friday, 20 November 2009, both
days inclusive.
ii. Dematerialised shareholders are required to notify their duly
appointed CSDP or broker of their acceptance of the Rights Offer in the
manner and time stipulated in the agreement governing the relationship
between the Shareholder and his/her CSDP or broker.
iii. The CSDP or broker accounts of dematerialised Shareholders will be
automatically credited with Rights Offer Shares to the extent to which
they have accepted the Rights Offer. York share certificates will be
posted, by registered post at the Shareholder`s risk, to certificated
Shareholders in respect of the Rights Offer Shares which have been
accepted.
iv. CSDPs effect payment in respect of dematerialised Shareholders on
a delivery versus payment basis.
v. Any material variation of the above dates and times will be
approved by the JSE, released on SENS and published in the South
African press.
8. Jurisdiction
The Rights Offer Shares will not be registered for purposes of the
Rights Offer with the Securities and Exchange Commission,
Washington D.C., the Canadian Provincial Securities Commission, or
the Australian Securities Commission under the Australian
Corporation Law, as amended. Accordingly, the Rights Offer will
not be made to or be open for acceptance by persons with
registered addresses in the United States of America or any of its
territories, dependencies, possessions or commonwealths or in the
District of Columbia or in the Dominion of Canada or in the
Commonwealth of Australia, its states, territories or possessions.
The CSDP or broker will ensure that where such persons are holding
York shares in dematerialised form they adhere to the above
restrictions.
9. Posting of Rights Offer circular
Shareholders are advised that a circular containing full details
of the terms of the Rights Offer and incorporating Revised Listing
Particulars and a form of instruction in respect of a Letter of
Allocation will be posted to all Shareholders registered on the
record date for the Rights Offer on or about Monday, 23 November
2009.
10. Withdrawal of cautionary announcement and finalisation
announcement
As details of the Rights Offer have been communicated to
Shareholders, the cautionary announcement is hereby withdrawn and
Shareholders are no longer required to exercise caution when
dealing in their York shares.
It is anticipated that the finalisation announcement for the
Rights Offer will be released on SENS on or about Friday, 6
November 2009 and published in the South African press on Monday,
9 November 2009.
Sabie
30 October 2009
Merchant Bank
RAND MERCHANT BANK (a division of FirstRand Bank Limited)_
Legal Advisor
Prinsloo, Tindle & Andropoulos Inc
Sponsor
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
Reporting Accountants
KPMG Inc.
Date: 30/10/2009 17:38:18 Supplied by www.sharenet.co.za
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