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BFS
BFS
BFS - Blue - Issue Of Debentures And Granting Of Share Options
BLUE FINANCIAL SERVICES LIMITED
(Registration number 1996/006595/06)
(JSE Code: BFS & ISIN: ZAE000083655)
("Blue" or "the Company")
ISSUE OF DEBENTURES AND GRANTING OF SHARE OPTIONS
1. Introduction
Shareholders are advised that Blue has signed an agreement dated 3 May 2007
which would enable its wholly owned subsidiary in Botswana, Blue Employee
Benefits (Pty) Limited Botswana ("Blue Botswana"), to issue 300, 14.5%,
unsecured guaranteed debentures due 2010 with a par value of R100 000 each
(totalling R30 million) to Millenium European Holdings II S.A.R.L. "(MEH").
Blue has simultaneously granted MEH 5 million options to acquire Blue
shares at R3.00 per share.
2. Rationale for the debenture issue and option grant
Blue requires funding to expand its African presence. To borrow in the
local currencies at the local interest rates can be extremely costly (prime
in many of the countries is around 20% per annum). In order to secure
funding for the expansion and to grow the new debtors books, Blue has
entered into an agreement with MEH in which the interest rate is fixed at
14,5% and given the funder an option to acquire shares at R3.00 as an
incentive for this funding line.
3. Salient features of the debentures
Interest rate 14.5%
Interest payments semi-annually
First interest payment six months from issue date
Redemption date 36 months from issue date
Conversion option None
A gearing ratio covenant exists in terms of which Blue Botswana`s
debt/equity ratio on a consolidated basis should not exceed 2.15 to one.
4. Salient features of the share options
Strike price R3.00
Expiry 30 April 2010
Type American
Blue is able to force the exercise of the share options if its shares have
traded at R4.00 per share or higher for each of 30 consecutive trading
days.
The option strike price of R3.00 represents a discount of 1.71% to the 30
day weighted average traded price of Blue shares as at 2 May 2007.
5. Financial effects
The effect of the issue of options on the net asset value per share, net
tangible asset value per share, earnings per share, headline earnings per
share, diluted earnings per share and diluted headline earnings per share
of the company is expected to be insignificant, but will nevertheless be
disclosed in a circular to shareholders in due course.
6. Conditions precedent
The issue of debentures and options are subject to:
- Blue obtaining all necessary shareholder and other regulatory
approvals; and
- a fair and reasonable opinion regarding the terms and conditions of
the options as required in terms of paragraph 5.53(b) of the JSE
Limited Listings Requirements.
7. Circular to shareholders
A circular containing details of the issue of debentures and granting of
share options, the financial effects as well as the fair and reasonable
opinion mentioned in paragraph 6 will be posted to shareholders in due
course.
Pretoria
3 May 2007
Designated Advisor
Ernst & Young Sponsors (Pty) Limited
Date: 04/05/2007 07:05:02 Produced by the JSE SENS Department.
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