| Tue 15 Apr 2008, 17:36 | | PFG - Pioneer Food Group Limited - The Proposed Ri |
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JSE
PFG
PFG - Pioneer Food Group Limited - The Proposed Rights Offer
PIONEER FOOD GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/017676/06)
JSE share code: PFG
ISIN: ZAE000118279
("Pioneer Foods" or "the Company")
THE PROPOSED RIGHTS OFFER
1 Introduction and rationale
The Pioneer Foods announcement, dated 7 April 2008, refers. In the announcement
it was mentioned that the Board of Directors of Pioneer Foods (the "Board") had
resolved to:
- proceed with an application for listing Pioneer Foods on the exchange
operated by the JSE Limited ("JSE"); and
- follow the listing with a capital raising by means of a rights offer.
In a separate announcement today, shareholders have been informed that the
Company intends to list on the JSE by way of introduction on 22 April 2008.
Therefore, no shares will be placed prior to the listing. In addition,
shareholders are advised that the company intends to proceed with a renounceable
rights offer for an amount of up to R500 million (the "Rights Offer"). The Board
believes that this will give all existing shareholders an equal opportunity to
participate in the capital raising. Net proceeds from the Rights Offer will be
used by the Company to repay debt and so create debt capacity which will, at an
appropriate time, be utilised to fund part of Pioneer Foods` planned capital
expenditure programme in the next two years, necessary to meet the rising
consumer demand for the Company`s basket of products. Specifically, the proceeds
will be used to fund capacity expansions in the milling, baking, cereal and
beverage businesses.
2 Terms of the Rights Offer
The Rights Offer will be for a total of 20 000 000 new Pioneer Foods ordinary
shares ("Rights Offer Shares") in the ratio of 10.28251 Rights Offer Shares for
every 100 shares held at the close of trade on Friday, 23 May 2008, at an issue
price of 2 500 cents per Rights Offer Share. If fully subscribed, the Rights
Offer will raise R500 million before expenses.
3 Underwriting and undertaking to follow rights
The Rights Offer has been underwritten by Zeder Investments Limited ("the
underwriter") to a maximum amount of R360 million. In addition, Kaap Agri
Limited and Mooreesburgse Koringboere (Proprietary) Limited, both shareholders
of Pioneer Foods, have irrevocably undertaken to follow their rights up to a
maximum of R100 million and R28.35 million respectively in respect of the Rights
Offer. All suspensive conditions relating to the underwriting agreement between
the Company and the underwriter have been fulfilled.
4 Regulatory approvals
The Issuer Services Division of the JSE has approved the listings of:
- 20 000 000 renounceable (nil paid) letters of allocation ("LAs"); and
- 20 000 000 Rights Offer Shares to be issued pursuant to the Rights Offer.
The South African Reserve Bank has granted approval for the Rights Offer.
The registration of the form of instruction in respect of the Rights Offer by
the Registrar of Companies appointed under the Companies Act No. 61 of 1973, is
imminent and a further announcement will be made in this regard in due course.
5 Salient dates and times
The last date to trade in Pioneer Foods shares in order to be entitled to
participate
in the rights offer is scheduled to be Friday, 16 May 2008 for settlement by the
record date which is Friday, 23 May 2008. Subject to the approval of the JSE,
it is anticipated that the 20 000 000 LAs will be listed on the JSE with effect
from the commencement of trade on Monday, 19 May 2008, on which date the Pioneer
Foods
shares will trade "ex-rights". The Pioneer Foods interim results are expected to
be released on the Securities Exchange News Service of the JSE ("SENS") on or
about Tuesday, 27 May 2008 and announced in the press on or about Wednesday, 28
May 2008. These dates are subject to change, and any changes will be released on
SENS and announced in the press. A finalisation announcement, giving the
salient dates of the rights offer, will be made on or about Wednesday, 23 April
2008.
6 Documentation
A circular to Pioneer Foods shareholders, setting out full details of the Rights
Offer, is in the process of being finalised and will be posted to shareholders
on or about Monday, 26 May 2008. A form of instruction in respect of the LAs
will be enclosed with the circular for use by Pioneer Foods shareholders who
have not dematerialised their Pioneer Foods shares.
7 Cautionary announcement
Shareholders are referred to the cautionary announcement dated 7 April 2008, and
are advised that caution is no longer required when dealing in their Pioneer
Foods shares.
Paarl
15 April 2008
Investment bank and transaction sponsor
Standard Bank
Independent sponsor
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
Legal advisors
Jan S. de Villiers
Reporting accountants
PricewaterhouseCoopers
Underwriter
Zeder Investments Limited
Corporate advisor to underwriter
PSG Capital
Date: 15/04/2008 17:36:01 Produced by the JSE SENS Department.
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