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Declaration announcement and terms of the fully committed and underwritten pro rata non-renounceable rights offer
African Rainbow Capital Investments Limited
(Incorporated in the Republic of Mauritius)
(Company number: C148430)
JSE and A2X code: AIL ISIN: MU0553S00000
("ARC Investments" or "the Company")
DECLARATION ANNOUNCEMENT AND TERMS OF THE FULLY COMMITTED AND UNDERWRITTEN PRO RATA NON-RENOUNCEABLE RIGHTS OFFER
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, HONG KONG, JAPAN AND ANY OTHER TERRITORY WHERE THE EXTENSION OR MAKING OF
THE RIGHTS OFFER WOULD BE UNLAWFUL OR IN CONTRAVENTION OF CERTAIN LAWS OR REGULATIONS.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE UNITED STATES OR ANY
OTHER JURISDICATION
1. INTRODUCTION
ARC Investments is pleased to advise shareholders that the board of directors of ARC Investments
("the Board") has resolved to undertake a fully committed and underwritten pro rata non-renounceable
rights offer of ZAR750 million ("Rights Offer"). Under the Rights Offer, qualifying shareholders will
receive 11.06579 rights offer shares for every 100 existing ARC Investments ordinary shares ("Ordinary
Shares") held on the record date of the Rights Offer.
2. RATIONALE FOR THE RIGHTS OFFER
2.1 The purpose of the Rights Offer is to raise additional capital for ARC Investments to invest in
the ARC Fund for use in its existing portfolio companies as well as for future acquisition
opportunities.
2.2 The ARC Fund will continue to invest in terms of its investment strategy and mandate, focusing
on the following:
2.2.1 to assist successful investee companies in pursuing opportunities such as:
2.2.1.1 New market expansions for Rain Group Holdings (Pty) Ltd as well as continued
development of its existing product offering, such as rainone, providing
customers with both a mobile and fixed-wireless product offering which is
enabled through newly acquired spectrum;
2.2.1.2 Continued expansion opportunities at Tyme, most notably through Tyme
Global which continues to see success in the Philippines with GoTyme, which
has attracted 1 million customers by Mid-August 2023, with high customer
activity rates;
2.2.1.3 Supporting the investment strategies of various fast growing ARC Fund
investee companies such as Autoboys, Linebooker and Apollo;
2.2.2 entirely new investment opportunities in line with the growth strategies and investment
mandate of the ARC Fund; and
2.2.3 Fulfilling general liquidity requirements of the ARC Fund.
2.3 The additional capital (after expenses of the Rights Offer and ARC Investments' liquidity
requirements) of approximately ZAR742.35 million, is expected to be sufficient to meet the
medium-term funding requirements of the ARC Fund, considering that a number of companies
in the portfolio are maturing and that the combined portfolio is expected to become more cash
generative during the next twelve months. In addition, the ARC Fund as part of its investment
strategy will take advantage of opportunities to monetise some of its investments through partial
or total disposal.
3. SALIENT TERMS OF THE RIGHTS OFFER
3.1. ARC Investments proposes to raise ZAR750 million through an offer of 150 000 000 Ordinary
Shares ("Rights Offer Shares") at a price of ZAR5.00 (500.0 cents) per Rights Offer Share
("Rights Offer Price") in the ratio of 11.06579 Rights Offer Shares for every 100 existing Ordinary
Shares held on the record date for the Rights Offer, being Friday, 1 December 2023.
3.2. The Rights Offer Price represents a 7.32022% discount to the 30 day volume weighted average
price of the Ordinary Shares as at 10 November 2023, being the last practicable date.
3.3. Application will be made to the JSE and A2X for the listing on the securities exchanges operated
by the JSE and A2X of the Rights Offer Shares which will be listed with effect from the
commencement of business on Monday, 11 December 2023.
3.4. The Rights Offer Shares will, upon issue and allotment, rank pari passu with all other Ordinary
Shares in ARC Investments.
3.5. Excess applications will not be allowed.
3.6. The Rights Offer is not conditional on any minimum subscription being obtained.
3.7. The Rights Offer is non-renounceable and will only be open to Shareholders registered as such
at the record date. This means that qualifying shareholders will not be able to renounce their
entitlement to receive Rights Offer Shares in favour of any other person/party, nor dispose of or
trade in their letters of allocation.
4. IRREVOCABLE SUBSCRIPTION UNDERTAKINGS AND UNDERWRITING
4.1. ARC Investments has obtained the following irrevocable subscription undertakings from ARC
Investments shareholders, representing 60.5% of the issued Ordinary Shares as at the last
practicable date, being Friday, 10 November 2023:
Number of Ordinary Shares Percentage of
Ordinary Shares
Shareholder name held (%)
African Rainbow Capital (Pty) Ltd ("ARC") 584 530 305 43.1%
UBI General Partner (Pty) Ltd (On behalf of ARC Fund) 78 823 621 5.8%
K2017386337 (Pty) Ltd 74 174 770 5.5%
Ubuntu-Botho Investments (Pty) Ltd 53 613 957 4.0%
ARC Financial Services Investments (Pty) Ltd 29 488 116 2.2%
Total 820 630 769 60.5%
4.2. No commitment fees are payable.
4.3. The balance of the Rights Offer is fully underwritten by ARC. The directors have made due and
careful enquiry to confirm that ARC is able to meet its commitments in terms of the Rights Offer.
4.4. No underwriting fees are payable.
5. FRACTION ENTITLEMENT
Only whole numbers of Rights Offer Shares will be issued to qualifying shareholders. The allocation of
Rights Offer Shares will be such that qualifying shareholders will not be allocated a fraction of a Rights
Offer Share and accordingly entitlements to Rights Offer Shares of 0.5 or greater will be rounded up
and less than 0.5 will be rounded down to the nearest whole number.
6. FOREIGN SHAREHOLDERS
Foreign shareholders may be affected by the Rights Offer, having regard to prevailing laws in their
relevant jurisdictions. Such foreign shareholders should inform themselves with regard to and observe
any applicable legal requirements of such jurisdiction in relation to all aspects of this announcement
that may affect them, including the Rights Offer. It is the responsibility of each foreign shareholder to
satisfy himself/herself as to the full observation of the laws and regulatory requirements of the relevant
foreign jurisdiction in connection with the Rights Offer, including obtaining any governmental, exchange
or other consents or the making of any filing which may be required, the compliance with any other
necessary formalities and the payment of any issue, transfer or other taxes or other requisite payments
due in such jurisdictions. Further, to the fullest extent permitted by applicable laws, ARC Investments
disclaims any and all responsibility or liability for the violation of such requirements by any persons in
any jurisdiction. The Rights Offer is governed by the laws of the Republic of South Africa and is subject
to applicable laws and regulations, including exchange control regulations. Nothing in this declaration
announcement or the Rights Offer circular referred to herein constitutes an offer to sell the letters of
allocation or the Rights Offer Shares to any person in any jurisdiction where it is unlawful to do so, or a
solicitation of an offer to buy the letters of allocation or the Rights Offer Shares from a person in a
jurisdiction in which it is unlawful to make such solicitation.
7. SALIENT DATES AND TIMES
Date 2023
Declaration announcement released on SENS and the A2X News Service on Tuesday, 21 November
Declaration Rights Offer announcement released on website of ARC Investments Tuesday, 21 November
Declaration Rights Offer announcement published in the press Wednesday, 22 November
Finalisation announcement released by 11:00 (SAST) on SENS and the A2X News Service on Thursday, 23 November
Finalisation Rights Offer announcement released on website of ARC Investments Thursday, 23 November
Finalisation Rights Offer announcement published in the press Friday, 24 November
Circular and Form of Instruction made available on ARC Investments' website Monday, 27 November
Last day to trade in Ordinary Shares in order to qualify to participate in the Rights Offer (cum Rights) Tuesday, 28 November
Shares trade "ex" the Rights Offer Wednesday, 29 November
(Nil paid letters of allocation will be listed and suspended from trading under the JSE and A2X code: AILN and ISIN:
MU0553S00034)
Circular and Form of Instruction distributed/posted to Qualifying Certificated Shareholders on (to the extent applicable) Friday, 1 December
Record Date for the Rights Offer, at the close of business on Friday, 1 December
Rights Offer opens at 09:00 (SAST) on Monday, 4 December
Circular and Form of Instruction emailed/posted to Dematerialised Shareholders Monday, 4 December
CSDP or Broker accounts of Qualifying Dematerialised Shareholders credited with Letters of Allocation at 09:00 (SAST) on Monday, 4 December
In respect of Qualifying Certificated Shareholders, Letters of Allocation credited to an electronic account held with the Monday, 4 December
Transfer Secretaries at 09:00 (SAST) on
Earliest date for last day to trade in respect of the take-up (no trading permitted, for processing purposes only) Tuesday, 5 December
Record date for take-up. Rights Offer closes. Payment to be made by Certificated Shareholders Friday, 8 December
Listing and issue of Rights Offer Shares on the JSE and A2X commences at 09:00 (SAST) on Monday, 11 December
Payment to be made by Dematerialised Shareholders. In respect of Qualifying Dematerialised Shareholders who exercise
their Rights, CSDP or Broker accounts debited with the aggregate Rights Offer Price and updated with Rights Offer Shares at
09:00 (SAST) on
In respect of Qualifying Certificated Shareholders who exercise their Rights, share certificates posted by registered post on
or about
Results of the Rights Offer announced on SENS and the A2X News Service on
Notification to the FSC of the results of the Rights Offer Tuesday, 12 December
Notes:
1. CSDPs effect payment on a delivery versus payment basis in respect of the Rights Offer Shares.
2. All of the above salient dates and times have been determined based on certain assumptions in relation to the Rights
Offer and are subject to change. Shareholders will be notified of any amendments to these salient dates and times on
SENS and the A2X News Service.
3. Share certificates may not be Dematerialised or rematerialised between Wednesday, 29 November 2023 and Friday,
1 December 2023, both days inclusive.
8. TAX CONSEQUENCES
8.1 The purchase, holding and disposal of the Rights Offer Shares should, for taxation purposes,
be treated according to the usual rules relating to the categorisation of an asset and its return
as capital or revenue in accordance with the taxation laws applicable to each qualifying
shareholder. The tax treatment of the purchase, holding and disposal of the Rights Offer Shares
in the hands of Shareholders is dependent on their individual circumstances and the tax
jurisdiction applicable to those Shareholders. No Shareholder should construe the contents of
this announcement and the circular referred to below and the documentation accompanying it
as tax or other advice.
8.2 Shareholders are advised to consult their tax and financial advisors regarding any taxation
implications pertaining to them regarding the acceptance of their Rights in terms of the Rights
Offer.
9. RIGHTS OFFER CIRCULAR
Further details of the Rights Offer will be disclosed in the Rights Offer circular, which will be available
on the Company's website, (http://www.arci.mu), from Monday, 27 November 2023, and will be
distributed to qualifying certificated shareholders on Friday, 1 December 2023 and to qualifying
dematerialised shareholders on Monday, 4 December 2023.
Ebène, Mauritius (with simultaneous circulation in Johannesburg)
Tuesday, 21 November 2023
Transaction Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited
Corporate Advisor: Deloitte Capital Proprietary Limited
Legal Adviser as to South African law: Webber Wentzel
Legal Adviser as to Mauritian law: BLC Robert & Associates
Important Notice
The information contained herein is not for release, publication or distribution, directly or indirectly, in or
into the United States, its territories or possessions, Canada, Australia, Japan, Hong Kong or any other
jurisdiction in which the distribution or release would be unlawful. These materials are not and do not
contain an offer of securities for sale or a solicitation of an offer to purchase or subscribe for securities
in any jurisdiction, including the United States, Australia, Canada, Japan, Hong Kong or any other state
or jurisdiction in which such release, publication or distribution would be unlawful. The securities to
which these materials relate (the "Securities") have not been, and will not be, registered under the U.S.
Securities Act of 1933 (the "Securities Act"), and may not be offered, sold, taken up, exercised, resold,
renounced, transferred or delivered, directly or indirectly, within the United States unless registered
under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration
under the Securities Act. There will be no public offer of the Securities in the United States. Subject to
certain exceptions, the Securities may not be offered or sold in Australia, Canada, Japan, Hong Kong
or any other jurisdiction in which it would be unlawful to do so or to, or for the account or benefit of, any
national, resident or citizen of such countries.
This announcement is only being distributed to and is only directed at: (i) persons who are outside the
United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (iii) high net worth
entities falling within Article 49(2)(a) to (d) of the Order; or (iv) persons to whom it may otherwise lawfully
be communicated (all such persons together being referred to as "Relevant Persons"). The Rights Offer
shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise
acquire such Rights Offer shares will be engaged in only with, Relevant Persons. Any person who is
not a Relevant Person should not act or rely on this announcement or any of its contents.
In any member state of the European Economic Area (other than the United Kingdom) that has
implemented Regulation (EU) 2017/1129 (the "Prospectus Regulation"), this announcement is only
addressed to and is only directed at qualified investors in that member state within the meaning of the
Prospectus Regulation.
Date: 21-11-2023 09:00:00
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