| Wed 21 May 2008, 8:50 | | SHF - Steinhoff - Proposed Broad-Based Black Econo |
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JSE SHF
SHFF
SHF - Steinhoff - Proposed Broad-Based Black Economic Empowerment ("BEE")
Transaction ("The Bee Transaction"), General Repurchase Of Ordinary Shares
And Launch Of ZAR 1,5 Billion Convertible Bonds
**NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES OF
AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS), CANADA, JAPAN, ITALY OR
AUSTRALIA**
STEINHOFF INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration no. 1998/003951/06)
Ordinary share code: "SHF" & ISIN: ZAE000016176
("Steinhoff" or "the Group" or "the Issuer")
PROPOSED BROAD-BASED BLACK ECONOMIC EMPOWERMENT ("BEE") TRANSACTION ("THE BEE
TRANSACTION"), GENERAL REPURCHASE OF ORDINARY SHARES AND LAUNCH OF ZAR 1,5
BILLION CONVERTIBLE BONDS
PROPOSED BEE TRANSACTION
Further to Steinhoff`s Interim Results announcement dated 5 March 2008,
shareholders are advised that the proposed sale of a 20% equity interest in
Steinhoff Africa Holdings (Proprietary) Limited to a consortium of BEE
Investors will no longer proceed. The debt funding package related to this
transaction was successfully raised by Steinhoff but, as a result of volatile
conditions in global equity markets over the recent past, the BEE Investors
have not been in a position to procure the required equity funding on
appropriate terms. The debt funding package was conditional upon the required
equity contribution being procured. The directors of Steinhoff have
consequently resolved to implement an alternative Empowerment ownership
structure at Steinhoff International Holdings Limited level. The proposed
Investors will include Steinhoff staff members and suitable Community-based
and Empowerment groupings in South Africa. This ownership structure in
Steinhoff will result in significant Black ownership being allocated to the
relevant South African operating subsidiaries in terms of the Broad-Based
Black Economic Empowerment Codes of Good Practice.
GENERAL REPURCHASE OF ORDINARY SHARES
Steinhoff confirms the Group`s intention to effect share repurchases from
time to time, from its existing resources in accordance with the general
authority granted to the directors by Steinhoff shareholders at the Annual
General Meeting held on 10 December 2007. Purely for the sake of facilitating
the BEE transaction and subject to Steinhoff shareholders` approval insofar
as may be required, it is intended to make available a portion of the shares
so purchased ("the BEE shares") as the medium to implement the BEE
transaction.
Any shares repurchased in excess of the BEE shares will be held in treasury
pending the conversion of the existing ZAR1,5 billion convertible bond
maturing on 31 July 2013 issued in June 2006 ("the 2006 Bonds"). The proceeds
of the 2006 Bonds were predominantly used to finance the construction of the
new chipboard plant of PG Bison in the North Eastern Cape area which was
officially opened on 18 April 2008.
LAUNCH OF CONVERTIBLE BOND
In addition, Steinhoff announces the launch of ZAR 1,5 billion unsubordinated
unsecured convertible bonds, with an increase option of up to ZAR 225 million
("the 2008 Bonds"). The 2008 Bonds will be convertible into ordinary shares
of the Issuer and are scheduled to mature on 20 July 2015.
The 7 year Bonds, will be marketed at a coupon of 9.375% - 9.875% payable
semi-annually on 20 January and 20 July in each year, and a yield of 11.288%
- 11.756%. The first interest payment will be made on 20 July 2008. The
conversion price is expected to be set at a premium of 30% - 35% to the
volume weighted average price (from launch to pricing) of the ordinary shares
of the Issuer on the JSE Limited. The 2008 Bonds will be issued at 100% and
unless previously converted, redeemed or purchased and cancelled, will be
redeemed at 120% of the principal amount on maturity. The Issuer has the
right to redeem all outstanding 2008 Bonds at their accreted principal amount
on or after 10 August 2011 if the parity value of the 2008 Bonds shall have
exceeded 130 per cent. of the accreted principal amount of the Bonds on each
of at least 20 out of any 30 consecutive trading days. The 2008 Bonds are
expected to price today and closing is expected on or about 9 June 2008.
The proceeds of the 2008 Bonds will be utilised by the Group for general
corporate purposes, including appropriate earnings-enhancing re-financing and
balance sheet optimisation initiatives.
In terms of the Listing Requirements of the JSE Limited ("the JSE"), PWC
Corporate Finance (Proprietary) Limited ("PWC") has been appointed to
consider the conversion terms of the 2008 Bonds in relation to the fairness
of the conversion terms to the ordinary shareholders of Steinhoff. PWC`s
fairness opinion as contemplated in Rule 5.53(b) of the JSE`s Listings
Requirements, which is a condition precedent to the issue of the 2008 Bonds,
will be issued by not later than the date of closing. Upon release of the PWC
opinion, it will be submitted to the JSE Limited Listings Division and become
available for inspection at the registered office of the Issuer for a period
of two weeks from date of closing.
Application will be made for the 2008 Bonds to be listed on the Singapore
Exchange Securities Trading Limited.
Barclays Capital is the Sole Bookrunner and Sole Lead Manager for the
offering of the 2008 Bonds.
For more information, please contact:
Barclays Capital:
Simon Ollerenshaw
* +44 (0) 207 773 5391
Steinhoff International Holdings Limited:
Jan van der Merwe
Piet Ferreira
Ben la Grange
* +27 (0) 11 445 3000
FURTHER ANNOUNCEMENT
Further announcement in respect of the results of the Bookbuild relating to
the 2008 Bonds, including the financial effects, where applicable in terms of
the JSE Listing Requirements, will be released after the final pricing of the
2008 Bonds has been concluded. A further announcement in respect of the BEE
transaction will be released in due course.
Wynberg, Sandton
21 May 2008
Company sponsor:
PSG Capital (Proprietary) Limited
Independent adviser in respect of the 2008 Bonds:
PWC Corporate Finance (Proprietary) Limited
The information contained herein is not for publication or distribution to
persons in the United States. Any securities referred to herein have not been
and will not be registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered or sold without registration
thereunder or pursuant to an available exemption there from. Neither this
document nor the information contained herein constitutes an offer to sell or
the solicitation of an offer to buy any securities.
In the United Kingdom this announcement is directed exclusively at persons
who fall within Article 19 or 49 of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 or to whom this announcement may
otherwise be directed without contravention of section 21 of the Financial
Services and Markets Act 2000. The investments referred to in this
announcement shall be issued only to such persons.
This announcement is not intended to be nor does it constitute an offer for
sale or subscription to the public as contemplated under Chapter VI of the
South African Companies Act No. 61 of 1973. South African residents are not
permitted to acquire the Bonds in terms of South African exchange control
rules as administered by the South African Reserve Bank.
This announcement is not an offer of securities or investments for sale nor a
solicitation of an offer to buy securities or investments in any jurisdiction
where such offer or solicitation would be unlawful.
Date: 21/05/2008 08:50:01 Produced by the JSE SENS Department.
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