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Pricing of Convertible Bonds and Partial Repurchase of its Outstanding Convertible Bonds due July 2013
Steinhoff International Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1998/003951/06)
Share Code: SHF & ISIN: ZAE000016176
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND
POSSESSIONS), AUSTRALIA, CANADA OR JAPAN.
RELEASED IN SOUTH AFRICA FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE AN OFFER TO SOUTH AFRICAN INVESTORS.
Pricing of Convertible Bonds and Partial Repurchase of its Outstanding Convertible
Bonds due July 2013
1. Introduction
Steinhoff International Holdings Limited ("SIHL") this morning announced the launch of
its offering (the “Bond Offering”) of senior unsecured guaranteed convertible bonds due
May 2017 (the "Bonds").
The Bonds will be issued by Steinhoff Finance Holding GmbH (the "Issuer"), a 100%
subsidiary of SIHL incorporated in Austria. The Issuer`s payment obligations under the
Bonds will be guaranteed by SIHL, which is rated Ba1 (stable outlook) by Moody`s. The
Bonds will be convertible into approximately 125 million ordinary shares of SIHL
(assuming the overallotment option is exercised in full by BNP Paribas and Deutsche
Bank AG, London Branch, the “Global Coordinators” and, together with HSBC, the “Joint
Bookrunners”), which represents approximately 7% of SIHL's current issued ordinary
share capital.
The Bond Offering was launched at the open of trading this morning and is now priced.
In conjunction with the Bond Offering, and as an integral part of its capital
management initiatives, SIHL also announced a concurrent repurchase (the “Repurchase”)
of up to the full outstanding principal amount of its convertible bonds due July 2013
(the “2013 Bonds”). The aggregate principal amount of the 2013 Bonds accepted for
repurchase is ZAR 1,262.1 million, at a fixed price of 108.38% of the nominal value
(107.5% of nominal value plus accrued interest). The settlement date in relation to the
2013 Bonds to be repurchased is expected to be 26 September 2012, and will be
conditional on the settlement of the new issue of convertible bonds due May 2017
announced on 20 September 2012. All 2013 Bonds repurchased will be cancelled and
removed from trading on the Singapore Stock Exchange. The aggregate principal amount of
the 2013 Bonds that will be outstanding following such cancellation is ZAR 237.9
million.
2. Salient Terms of the Bonds
SIHL announces that the terms for the Bonds have been fixed as follows:
- issue size is EUR 400 million (subject to increase by up to EUR 25 million pursuant
to the overallotment option which SIHL has granted to the Joint Bookrunners, which is
exercisable up to close of business in South Africa on 24 September 2012);
- the initial conversion price has been set at ZAR 34.71 per ordinary share, based on a
fixed exchange rate of EUR 1.00 = ZAR 10.8108. The initial conversion price
represents a 30.0% premium over the volume weighted average price ("VWAP") of the
ordinary shares of SIHL on the JSE Limited (the "JSE") from launch to pricing;
- the Bonds will be issued on 26 September 2012;
- the coupon has been set to 6.375% per annum, payable semi-annually in arrear on 26
May and 26 November of each year, commencing on 26 May 2013 (long first coupon);
- the issue price of the Bonds is 100% of their principal amount;
- unless previously redeemed or converted, the Bonds will be redeemed at 100% of their
principal amount on 26 May 2017; and
- the Issuer will have the option to redeem the outstanding Bonds at par (together with
accrued interest) on or after 11 December 2015 if the parity value of the Bonds
translated into Euro at the prevailing exchange rate exceeds 130% of the principal
amount of the Bonds for a specified period, or at any time at their principal amount
together with accrued interest if less than 10% of the Bonds originally issued
remain outstanding.
The net proceeds arising from the issue of the Bonds will be earmarked principally for
the Repurchase and the balance will be used to extend the group’s current debt maturity
profile. In addition, the Bond Offering will be used to enhance the group’s financial
capacity to allow it to pursue options considered appropriate to address the potential
dilution impact of the group’s convertible bonds (including any 2013 Bonds which remain
outstanding after the Repurchase), and for general corporate purposes.
In accordance with the Listings Requirements of the JSE, PricewaterhouseCoopers
Corporate Finance (Proprietary) Limited ("PwC") has been appointed by the board of
directors of SIHL as independent expert to consider the conversion terms of the Bonds
in relation to the fairness of the conversion terms to the ordinary shareholders of
SIHL. PwC is of the opinion that the terms and conditions of the issue of the Bonds are
fair to SIHL's shareholders. A copy of their opinion will be submitted to the JSE's
Issuer Regulation Division today and, subject to their approval, will become available
for inspection at the registered office of SIHL for a period of two weeks from the date
of closing. A further announcement with respect to the approval of the fairness opinion
will be published in due course.
Application will be made to include the Bonds for trading on the Open Market
(Freiverkehr) of the Frankfurt Stock Exchange.
3. Unaudited Pro forma Financial Effects of the Bonds and Repurchase of the 2013 Bonds
The unaudited pro forma financial effects of the Bonds and the Repurchase on the
published audited results of SIHL for the financial year ended 30 June 2012 have been
calculated on the basis that the Bond Offering (excluding the overallotment option) and
Repurchase were completed on 1 July 2011, the start of the period of the most recently
released results for the financial year ended 30 June 2012.
Due to the nature of these unaudited pro forma financial effects, they are presented
for illustrative purposes only and may not fairly present SIHL’s financial position or
the results of its operations following the issue of the Bonds and the Repurchase.
Consequently, historical performance is not an appropriate reflection of future
prospects. The unaudited pro forma financial effects are the responsibility of the SIHL
directors.
The pro forma financial effects of the Bonds excluding the overallotment option and the
Repurchase on SIHL's earnings per share, headline earnings per share, diluted earnings
per share and headline diluted earnings per share and net asset value per share are not
significant (less than 3%), and have therefore not been disclosed;
The pro forma financial effects of the Bonds (excluding the overallotment option) and
the Repurchase have been based on the following assumptions:
- Proceeds from the Bonds (excluding the overallotment option) are assumed to have been
used on 1 July 2011, with interest saved and incurred on the Bonds (before tax)
converted at an average exchange rate of EUR 1.00 = ZAR 10.4141, the average
exchange rate for the financial year ended 30 June 2012; and
- Tax has been computed at SIHL’s average tax rate for the financial year ended 30 June
2012.
BNP Paribas and Deutsche Bank AG, London Branch are acting as Global Coordinators and,
together with HSBC, as Joint Bookrunners in connection with the Bond Offering and as
joint dealer managers in connection with the Repurchase. BNP Paribas is acting as sole
stabilising manager (the "Stabilising Manager") for the Bond Offering. Deutsche Bank is
acting as settlement agent for the Bond Offering and the Repurchase.
For more information, please contact:
Steinhoff International Holdings Limited:
Markus Jooste
+27 (21) 808 0735
Piet Ferreira
+27 (21) 808 0708
Mariza Nel
+27 (21) 808 0711
20 September 2012
Transaction sponsor: Deutsche Securities (SA) Proprietary Limited
Company sponsor: PSG Capital (Proprietary) Limited
Independent expert in respect of the Bonds: PricewaterhouseCoopers Corporate Finance
(Proprietary) Limited
This announcement is not for publication, distribution or release, directly or
indirectly, in or into the United States (including its territories and dependencies,
any State of the United States and the District of Columbia). The securities referred
to herein have not been and will not be registered under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and may not be offered or sold in the United
States without registration there under or pursuant to an available exemption there
from. Neither this document nor the information contained herein constitutes or forms
part of an offer to sell or the solicitation of an offer to buy securities in the
United States. There will be no public offer of the Bonds in the United States or in
any other jurisdiction.
In member states of the European Economic Area which have implemented the Prospectus
Directive (Directive 2003/71/EC) (each, a "Relevant Member State"), this announcement
is directed exclusively at persons who are "qualified investors" within the meaning of
Article 2(1)(e) of the Prospectus Directive and pursuant to the relevant implementing
rules and regulations adopted by each Relevant Member State. In the United Kingdom this
announcement is directed exclusively at Qualified Investors (i) who have professional
experience in matters relating to investments falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the "Order") or (ii) who fall within Article 49(2)(A) to (D) of the Order, and (iii)
to whom it may otherwise lawfully be communicated. This announcement is not intended to
be nor is it an offer for sale or subscription to the public as contemplated under
Chapter 4 of the South African Companies Act, No.71 of 2008, as amended nor does it
constitute an offer for subscription, sale or purchase of the Bonds to any South
African resident persons or company or any non-South African company which is a
subsidiary of a South African company. A South African resident person or company or
any non-South African company which is a subsidiary of a South African company is not
permitted to acquire the Bonds unless the express prior written approval of the South
African Reserve Bank has been obtained.
In connection with the issue of the Bonds, the Stabilising Manager or any person acting
on behalf of the Stabilising Manager may over-allot Bonds or effect transactions with a
view to supporting the market price of the Bonds at a level higher than that which
might otherwise prevail. However, there is no assurance that the Stabilising Manager
(or any persons acting on behalf of the Stabilising Manager) will undertake
stabilisation action. Any stabilisation action, if begun, may be ended at any time, and
must be brought to an end after a limited period.
This announcement is not an offer of securities or investments for sale nor a
solicitation of an offer to buy securities or investments in any jurisdiction where
such offer or solicitation would be unlawful
Date: 20/09/2012 04:37:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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