Introduction of shareholders into Ombrecorp and further investments in SA Water Works Holdings (RF) (Pty) Lt
REX TRUEFORM GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1937/009839/06)
JSE share code: RTO ISIN: ZAE000250387
JSE share code: RTN ISIN: ZAE000250395
JSE share code: RTOP ISIN: ZAE000250403
("Rex Trueform" or "the company")
INTRODUCTION OF NEW SHAREHOLDERS INTO OMBRECORP TRADING (RF) PROPRIETARY LIMITED AND FURTHER INVESTMENT
IN SA WATER WORKS HOLDING COMPANY (RF) PROPRIETARY LIMITED
Shareholders are referred to the SENS announcement released by Rex Trueform on 28 September
2018 (the "28 September announcement"), wherein the company advised that it had, through its
wholly-owned subsidiary, Ombrecorp Trading (RF) Proprietary Limited (formerly Ombrecorp
Trading Proprietary Limited) ("OmbreCorp"), subscribed for 33.78% of the issued share capital of
SA Water Works Holding Company (RF) Proprietary Limited (formerly SA Water Works Holding
Company Proprietary Limited) ("SAWW"), which company acquired, through a wholly-owned
subsidiary, 73.425% of the ordinary issued shares in the share capital of Sembcorp Siza Water (RF)
Proprietary Limited ("Sembcorp Siza") (the "Sembcorp Siza acquisition"). In the same
announcement, the company stated its intention to introduce additional third party shareholders into
Ombrecorp (with Rex Trueform retaining a majority stake), and the intended acquisition of
Silulumanzi (RF) Proprietary Limited (formerly Sembcorp Silulumanzi (RF) Proprietary Limited)
("Silulumanzi") by SAWW via its wholly-owned subsidiary, SA Water Works (RF) Proprietary
Limited (formerly SA Water Works Proprietary Limited) (the "SAWW subsidiary").
2. INTRODUCTION OF THE NEW OMBRECORP SHAREHOLDERS
A subscription agreement (the "subscription agreement") has been signed between Rex Trueform,
Ombrecorp, The Community Chest of the Western Cape (the "Community Chest"), Cornerstone
Institute (RF) NPC ("Cornerstone"), Desmond Tutu HIV Foundation NPC ("Desmond Tutu HIV
Foundation"), the Trustees for the time being of the District Six Museum Foundation Trust ("District
Six Museum Foundation") and the Trustees for the time being of the Wheatfield Estate Foundation
Trust ("Wheatfield") (collectively the "new Ombrecorp shareholders") whereby Rex Trueform and
each of the new Ombrecorp shareholders will subscribe for new shares in Ombrecorp at a value of R1
per share, as the value of the assets of Ombrecorp approximates the value of its liabilities (the "new
Ombrecorp shares"), as follows:
Subscriber Shareholding in Ombrecorp after the issue of
the new Ombrecorp shares (%)
Community Chest 6
Desmond Tutu HIV Foundation 6
District Six Museum Foundation 6
Rex Trueform 52
Rex Trueform's shareholding in Ombrecorp will be diluted from 100% to 52% due to the introduction
of the new Ombrecorp shareholders into Ombrecorp. Salient details of the new Ombrecorp
shareholders are as follows:
Community Chest manages social investment funds on behalf of corporate donors and foundations
and is an inclusive development thought leader with a 90 year track record of delivery. Projects
designed and managed on behalf of public and private sector entities are focused on Education,
Income Generation, Health and Community Development. The Community Chest supports over 300
community based organisations annually and has a fulltime team of 36 employees as well as a
network of field associates in the pursuit of delivering to the strategic development frameworks of
the National Development Plan and the Sustainable Development Goals.
Cornerstone, a tertiary education institution, is a non-profit company based in Cape Town, which
focuses on education and the development of future leaders. There are currently more than 500
students who are enrolled in both undergraduate and postgraduate programmes in a multiple of
disciplines, including education, entrepreneurship, psychology, sociology, theology and media studies,
who are benefitting from Cornerstone’s support.
Desmond Tutu HIV Foundation
Desmond Tutu HIV Foundation is a registered non-profit company established in association with the
Desmond Tutu HIV Centre, an accredited research centre within the Faculty of Health Sciences,
University of Cape Town. Pairing internationally acclaimed research with community-driven
development programmes, Desmond Tutu HIV Foundation collaborates with those most at risk to find
innovative solutions in the prevention and treatment of HIV and related infections. Desmond Tutu
HIV Foundation strives to improve the health and wellbeing of the communities it serves while
contributing to local and national health policy.
District Six Museum Foundation
District Six Museum Foundation was established in 1989 and launched as a museum in 1994. District
Six Museum Foundation is committed to telling the stories of forced removals and assisting in the
reconstitution of the community of District Six and Cape Town by drawing on a heritage of non-
racialism, non-sexism, and anti-class discrimination.
Wheatfield, a non-profit organisation, aims to empower South Africa's youth by providing financial
and general support with regard to furthering their education. Over 100 students are assisted each year
in various study disciplines. In addition, Wheatfield supports various feeding schemes and old age
homes in the greater Cape Town area.
3. RATIONALE FOR THE INTRODUCTION OF THE NEW OMBRECORP SHAREHOLDERS
The credentials of these long-established not-for-profit organisations are important for the corporate
social investment and transformation imperatives of the company.
4. INTRODUCTION OF NEW SHAREHOLDER INTO SAWW
Pursuant to the introduction of a new SAWW shareholder, being SAWW Manco Proprietary Limited
(formerly K2018080976 South Africa Proprietary Limited) ("SAWW Manco"), Ombrecorp's
shareholding in SAWW was diluted from 33.78% to 15.16%.
5. ADDENDUM TO SUBSCRIPTION AGREEMENT
Shareholders are advised that an addendum to the subscription agreement as set out in the 28 September
announcement has been signed by the parties thereto, being Ombrecorp, SAWW and 27 Four, with the material
amendments to the original subscription agreement being that Ombrecorp no longer has an option with regard
to a second subscription for additional shares in SAWW (the "additional SAWW shares"), but now will subscribe
for additional SAWW shares and advance further funding to SAWW, in the aggregate amount of R83 673 025. As a
consequence of the subscription for the additional SAWW shares by Ombrecorp, Ombrecorp will hold 30% of the issued
share capital of SAWW (the "Ombrecorp subscription").
6. FURTHER ACQUISITION BY SAWW
As was the stated intention in the 28 September announcement, SAWW has acquired, via the SAWW
subsidiary, [i] 100% of the ordinary issued share capital of SA Water Works Utilities Proprietary
Limited (formerly Sembcorp Utilities South Africa Proprietary Limited) ("SA Water Works
Utilities") – which holds 52% of the ordinary issued shares in Silulumanzi - and [ii] 48% of the
ordinary issued shares in the share capital of Silulumanzi, from Sembcorp Utilities (Netherlands) NV
(the "Silulumanzi acquisition").
SA Water Works Utilities has been in existence since 1998 and provides operation and maintenance
services to Silulumanzi. Silulumanzi conducts a water concession business, operating in the municipal
boundaries of the City of Mbombela Local Municipality and the greater parts of Nelspruit and, since
1999, has provided water and water services to residential, commercial and industrial consumers
pursuant to the concession agreement executed between the City of Mbombela Local Municipality and
The total purchase consideration for the Silulumanzi acquisition was R723 753 934, which
consideration was funded via the issue of preference shares in the SAWW subsidiary with a value of
R400 000 000 to Nedbank Limited, shareholder loan facilities afforded by certain other SAWW
shareholders (being 27 Four and SAWW Manco) on commercial terms and at market-related rates,
and the subscription of further shares in SAWW by such SAWW shareholders, in the aggregate
amount of R323 753 934.
As previously advised, Ombrecorp will now, in terms of the Ombrecorp subscription, subscribe for the
additional SAWW shares and advance further funding to SAWW on normal commercial terms, which
subscription and funding shall be financed as follows:
- Rex Trueform will advance a further shareholder loan on normal commercial terms in the amount
of R11 673 025 to Ombrecorp (the "Rex loan");
- additional funding in the form of a term loan facility of R72 000 000 (the "27 Four funding")
will be advanced to Ombrecorp by 27 Four Life Limited (previously Prescient Life Limited) ("27
Four") in terms of a term loan facility agreement entered into between Ombrecorp and 27 Four
(the "term loan agreement"). The facility provided by 27 Four pursuant to the term loan
agreement will be secured by a cession and pledge in securitatem debiti by Ombrecorp to 27 Four
of its shares in, and loan claims against, SAWW, a cession and pledge in securitatem debiti by
Rex Trueform and the new Ombrecorp shareholders to 27 Four of their shares in, and loan claims
against, Ombrecorp (the "shareholder cession and pledge"), and a cession and pledge in
securitatem debiti by Ombrecorp to 27 Four of its bank accounts. 27 Four will furthermore be
accorded certain payment preferences in relation to the 27 Four funding, and Rex Trueform will
waive its right to accelerate the repayment of the Rex loan as a result of any event of default
under the agreement pursuant to which the Rex loan was advanced for as long as there is
outstanding indebtedness under (and as defined in) the term loan agreement (the "27 Four
7. FINANCIAL INFORMATION
The consolidated profit after tax, total assets and net asset value of the companies acquired by SAWW
(via the SAWW subsidiary) in terms of the Silulumanzi acquisition are R65 197 104, R301 481 818
and R196 978 976 respectively, based on the consolidated audited financial statements of SA Water
Works Utilities and the audited financial statements of Silulumanzi for the financial year ended 31
December 2017, which financial statements were prepared in accordance with International Financial
Reporting Standards. SAWW will hold an effective 100% of Silulumanzi.
The discounted free cash flow generated by the assets acquired by SAWW (via the SAWW
subsidiary) has a value of R650 000 000, based on a valuation performed by SAWW during
September 2017, which valuation was based on forecasts and the audited financial statements of SA
Water Works Utilities and Silulumanzi for the financial year ended 31 December 2016. The total
purchase consideration of R723 753 934 adjusts the valuation for the net cash as at 31 December
2017, an interest escalation amount and transaction costs.
8. NOTIFICATION IN TERMS OF SECTION 45(5) OF THE COMPANIES ACT 71 OF 2008
Notice is hereby given that, in terms of the provisions of section 45(5) of the Companies Act 71 of
2008 ("the Companies Act"), and pursuant to the special resolution passed at the annual general
meeting of Rex Trueform held on 30 November 2018 approving the authority of the board to provide
direct or indirect financial assistance to, inter alia, subsidiaries of the company, the board has adopted
resolutions on 12 February 2019 in terms of section 45(2) of the Companies Act authorising the
company to provide financial assistance to Ombrecorp by way of the company entering into the
shareholder cession and pledge with 27 Four, and agreeing to the 27 Four Payment Preferences.
The board resolutions in this regard were adopted in compliance with the provisions of section 45 of
the Companies Act.
The Sembcorp Siza acquisition, introduction of new Ombrecorp shareholders and the Ombrecorp
subscription constitute, in aggregate, a category 2 transaction for Rex Trueform in terms of the JSE
Listings Requirements and accordingly do not require approval by Rex Trueform shareholders.
25 February 2019
Date: 25/02/2019 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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