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Specific repurchase of 47 000 000 ordinary shares
Finbond Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: FGL
ISIN: ZAE000138095
(“Finbond” or “the Company” or “the Group”)
SPECIFIC REPURCHASE OF 47 000 000 ORDINARY SHARES
1.Introduction
Finbond shareholders are hereby advised that Finbond has agreed terms with Ithuba Investments LP,
Riskowitz Value Fund LP and Conduit Capital Limited to repurchase a total of 47 000 000 Finbond ordinary
shares of 0.0001 cents each, by Finbond, from Ithuba (22 748 015), RVF (18 843 371) and Conduit
(5 408 614), for a cash consideration of R2.91123 per Finbond Share (“Specific Repurchase”).
The Repurchase will be undertaken in accordance with section 48(8)(b) and of the Companies Act, No. 71
of 2008, as amended (“Companies Act”) and its regulations (“Regulations”) and paragraph 5.69 of the
Listings Requirements of the JSE Limited (“Listings Requirements”).
2. Terms of the Specific Repurchase
The Specific Repurchase will be undertaken at a price of R2.91123 per Finbond Share (“Repurchase Price”),
on or about 9 March 2020, subject to regulatory and shareholder approval. The Specific Repurchase Price
represents a 10% discount to the weighted average traded price of the Finbond ordinary shares measured
over the 30 business days prior to Friday, 24 January 2020, the date prior to the date on which the Specific
Repurchase price was agreed between Finbond, Ithuba, RVF and Conduit. The total Specific Repurchase
consideration will amount to R136.8 million.
In terms of the JSE Listings Requirements, the Specific Repurchase requires approval being given in terms
of a special resolution. As Ithuba, RVF and Conduit will be participating in the Specific Repurchase they,
together with their associates, will be precluded from voting on the special resolution. Ithuba and RVF are
regarded, in terms of the JSE Listings Requirements, to be related parties to Finbond by virtue of being
material shareholders in the Company. Conduit is an associate party to Ithuba and RVF. Ithuba, RVF and
Conduit currently hold a combined 42.90% interest in Finbond, which will be reduced to 39.95%
subsequent to the Specific Repurchase.
As the Specific Repurchase price is at a 10% discount to the 30 business day volume weighted average
price up to Friday, 24 January 2020 (the date prior to the date on which the consideration was agreed
between the parties), no fairness opinion is required in terms of section 5.69(e) of the JSE Listings
Requirements.
3. Rationale
The rationale for the Specific Repurchase includes the positive effect the repurchase will have on
Finbond’s public shareholder spread, the decrease in shareholding of the majority shareholder, the
positive effect it will have on Finbond’s earnings per share and the effective use of Finbond’s excess
liquidity. It forms part of Finbond’s strategic plan of action to repurchase shares, when the opportunity
arises. The board believes that Finbond’s shares are undervalued and therefore believes this to be an
advantageous transaction.
4. Source of funds and impact of the specific repurchase on the financial Information
The cash amount payable in terms of the Specific Repurchase will be funded from existing cash resources.
The Specific Repurchase shares will be cancelled, delisted and revert back to authorised but unissued
share capital.
4.1 The impact on the cash and cash equivalents of the Group at 31 August 2019 is:
R’000 31 August Repurchase After
2019
Cash and cash equivalents 712 100 (137 137) 574 963
Other than the impact on the cash and cash equivalents as set out above and the impact on the
Share Capital as set out in 5 below, the Specific Repurchase will have no further impact on the
Financial Information of the Group.
4.2.1 Impact of the Specific Repurchase on the Share Capital of Finbond
The share capital before the Specific Repurchase is as follows:
Rand
Before
Authorised 1 000
1 000 000 000 ordinary shares of 0,0001 cents each
Issued share capital before the Specific Repurchase
955 243 450 ordinary shares of 0,0001 cents each 955
Less: 30 267 314 treasury shares 30
Share premium 1 155 129 388
Total 1 155 130 313
The share capital after the Specific Repurchase is as follows :
Rand
After
Authorised 1 000
1 000 000 000 ordinary shares of 0,0001 cents each
Issued share capital after the Specific Repurchase
908 243 450 ordinary shares of 0,0001 cents each 908
Less: 30 267 314 treasury shares 30
Share premium 1 018 359 435
Total 1 018 360 313
The Specific Repurchase Shares will be cancelled and revert back to authorised but unissued share
capital. The 30 267 314 ordinary shares held in treasury, by 100% owned subsidiaries
(representing 3.33% of issued share capital), will remain unaffected by the Specific Repurchase.
5. Circular to shareholders
A circular setting out the details of the Specific Repurchase (“Circular”) and incorporating a notice
convening a general meeting of Finbond shareholders to approve the special and ordinary resolutions
required to implement the Specific Repurchase (“General Meeting”) will be distributed to Finbond
Shareholders on or about Monday, 3 February 2020. The General meeting is expected to be convened on
or about Friday, 28 February 2020.
Subject to the results of the General Meeting and regulatory processes, the Specific Repurchase shares
will be cancelled and delisted on or about Monday, 9 March 2020.
29 January 2020
CORPORATE ADVISER AND SPONSOR:
GRINDROD BANK LIMITED
Date: 29-01-2020 05:00:00
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