| Tue 27 May 2008, 15:00 | | ALJ - All Joy Foods - Update On The Fully Underwritten Rights Offer And |
|
ALJ
ALJ
ALJ - All Joy Foods - Update On The Fully Underwritten Rights Offer And
Proposal Received From Eastern Trading (Pty) Limited
ALL JOY FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
JSE Share code: ALJ
ISIN: ZAE000017240
("All Joy" or "the Company")
UPDATE ON THE FULLY UNDERWRITTEN RIGHTS OFFER AND PROPOSAL RECEIVED FROM EASTERN
TRADING (PTY) LIMITED
1. UPDATE ON RIGHTS OFFER
Shareholders were notified by way of a SENS announcement on 7 April 2008 that
the directors have decided to raise R15 million by way of a fully underwritten
rights offer, subject to the various conditions precedent, through the issue of
60 000 000 ordinary shares of 1 cents each in the issued share capital of All
Joy, at a subscription price of 25 cents per share.
All Joy entered into an underwriting agreement with Africa Heritage Investments
(Pty) Limited ("AHI") in terms of which AHI has agreed to fully underwrite the
rights offer ("underwriting agreement"), subject to the fulfilment of certain
conditions inter alia Competition Commission approval and Securities Regulation
Panel ("SRP") approval.
This announcement serves to update shareholders on the progress of the rights
offer and the fulfilment of the conditions precedent to the underwriting
agreement.
1.1 COMPETITION COMMISSION FILING
The required information and documentation have been filed at the Competition
Commission and approval is expected during June 2008.
1.2. UNDERWRITER`S GUARANTEE
First National Bank issued a guarantee confirming that AHI has sufficient cash
resources and/or facilities available to subscribe for the full amount of
R15 000 000.
1.3 SECURITIES REGULATION PANEL WAIVER AND CIRCULAR
If AHI is called upon to take up the maximum number of shares in terms of the
underwriting agreement, it will acquire 58.8% of the issued shares of All Joy,
resulting in an affected transaction in terms of the SRP Code. In terms of rule
8.1 of the SRP Code, an affected transaction requires a mandatory offer to
minorities by AHI at 25 cents per share. However, the underwriting agreement is
conditional upon the waiver of this requirement.
In terms of rule 8.7 of the SRP Code, a mandatory offer can be waived by a
majority of independent shareholders` votes at a general meeting of
shareholders.
Therefore a circular has been prepared and is expected to be distributed to All
Joy shareholders in early June 2008, providing All Joy shareholders with
information on the requirements of the SRP Code in respect of a mandatory offer
to minority shareholders. A general meeting of shareholders will be convened in
order to pass, with or without modification, such resolutions as are necessary
to waive a mandatory offer by AHI to minority shareholders.
1.4 FURTHER ANNOUNCEMENT AND CIRCULAR
Shareholders will be informed once all conditions precedent relating to the
underwriting agreement have been fulfilled.
A circular is being prepared providing shareholders with information on the
rights offer. The circular will be mailed to shareholders once the underwriting
agreement becomes unconditional.
2. PROPOSAL RECEIVED FROM EASTERN TRADING (PTY) LIMITED
On 12 May 2008 the Board of All Joy ("the Board") received a letter from lawyers
representing Eastern Trading (Pty) Limited ("ET") with a proposal to acquire the
business of All Joy as a going concern at a cash price of R13 760 776 ("gross
price"). The proposal was subject to numerous conditions precedent.
The Board considered the proposal at its Board meeting on 21 May 2008.The Board
also met with an authorised representative of the controlling shareholder. After
considering the proposal, the Board decided to reject the proposal and informed
the lawyers and the SRP accordingly.
The Board`s main reasons for the decision were as follows:
- The proposal was not a firm and unconditional offer.
- The gross price of R13 760 776 was unacceptable.
- It is a condition precedent of the proposal that All Joy abandons the
rights issue process. The Board is not prepared to do so as the company requires
a capital injection.
- Some of the conditions precedent are vague and consequently unacceptable.
The controlling shareholder indicated that the proposal was not acceptable to it
and that it would not support it.
3. RULE 19 OF SRP CODE
ET has lodged a complaint with the SRP, averring that the proposed rights issue
by the company constitutes "frustrating action" of their "offer" as contemplated
in rule 19 (a) of the SRP Rules.
The Board initially heard of a potential offer by ET a few years ago but no
offer was received by either the controlling shareholder or the company. Under
the circumstances the Board had no option but to announce a rights offer on 7
April 2008. Only after the rights offer was announced, the Board received the
letter from the lawyers referred to in 2 above.
To prove its bona fides and to place matters beyond doubt, the Board will
include a resolution in the notice of general meeting in the circular referred
to in 1.3 above, that shareholders ratify the Board`s decision to proceed with a
R15 million rights offer at 25 cents per share.
27 May 2008
Johannesburg
Designated Adviser
Exchange Sponsors
Date: 27/05/2008 15:00:25 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
