| Fri 29 Aug 2008, 7:42 | | ABO - Absolute Holdings Limited - Terms of the unconditional, fully underwritten |
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ABO
ABO
ABO - Absolute Holdings Limited - Terms of the unconditional, fully underwritten
renounceable rights offer to Absolute shareholders
ABSOLUTE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: ABO ISIN No: ZAE000062998
("Absolute" or "the company")
TERMS OF THE UNCONDITIONAL, FULLY UNDERWRITTEN RENOUNCEABLE RIGHTS OFFER TO
ABSOLUTE SHAREHOLDERS
1. Introduction
Shareholders are referred to the announcement which was released on SENS on
Wednesday, 2 April 2008 relating to the proposed rights offer.
Absolute is now proceeding with the rights offer in order to raise approximately
R12 840 485 by offering for subscription 214 008 081 Absolute shares ("rights
offer shares") to Absolute shareholders or their renouncees at 6 cents per
rights offer share ("the rights offer price") in the ratio of 1 rights offer
share for every 4.00160 Absolute shares held on the record date for the rights
offer, being Friday, 19 September 2008.
2. Purpose of the rights offer
The purpose of the rights offer is to enlarge the company`s capital base in
order to provide the equity to fund the mining projects at the Diamond Quartzite
and Picture Stone quarries as well as to provide working capital in order to
expand the business operations of the Absolute group. In the interim, Calulo
Resources (Proprietary) Limited ("Calulo Resources") has advanced loan funding
to the company in order to assist Absolute with the required funding, whilst the
rights offer is finalised. Loan funding has been advanced on an ad hoc basis in
order to fund payment of expenses, creditors and the purchase of necessary
equipment for the commencement of mining operations and bears interest at the
prime rate. The loan is unsecured and is repayable in 12 months unless
converted to equity.
Pursuant to the mining right being granted for the Diamond Quartzite deposit in
the Northern Cape, full scale mining activities commenced at the Diamond
Quartzite quarry in the second quarter of the current financial year. The
second mining operation, being the Picture Stone quarry, will commence before
the end of the year. As announced previously, the mining holding company for the
group was renamed Lenopodi (Proprietary) Limited (formerly Absolute Coleccions
(Proprietary) Limited) ("Lenopodi"). Lenopodi acquired the entire issued share
capital of Niemoller Marmer (Eiendoms) Beperk ("Niemoller Marmer") on 31 March
2008 for R2 000 000, which purchase price was settled through the issue of
shares by Absolute. Niemoller Marmer holds a valid mining and prospecting right
over a sandstone deposit in the Northern Cape Province, known as Picture Stone.
The company is in the process of finalising the conversion of the mining right
to a new order mining right and operations at the site are planned to commence
before the end of the year. On completion of the rights offer, Absolute will
have:
- sufficient equity funding to fund the mining operations at the Diamond
Quartzite and Picture Stone quarries; and
- sufficient working capital at its disposal in order to be able to expand its
business operations, through, inter alia, the reduction of debt.
3. Terms of the rights offer
Absolute is offering for subscription by way of a renounceable rights offer to
Absolute shareholders and/or persons in whose favour they renounce their rights,
a total of 214 008 081 rights offer shares at a rights offer price of 6 cents
per rights offer share in the ratio of 1 rights offer share for every 4.00160
Absolute shares held on the record date of the rights offer, being Friday, 19
September 2008. The amount is payable in full on acceptance by certificated
shareholders, or on a delivery versus payment basis by the CSDP or broker of
dematerialised shareholders, as the case may be. The terms and conditions of
the rights offer will be set out in full in a circular to be posted to
shareholders on or about Monday, 22 September 2008 ("the circular").
Absolute shareholders will be entitled to apply for a greater number of rights
offer shares than those offered to them in terms of the rights offer and, in the
event that there are excess rights offer shares available for subscription, such
excess rights offer shares will be allocated equitably to shareholders applying
for same, taking into account the number of shares held by such shareholder just
prior to the allocation of excess shares, including those taken up as a result
of the rights offer and the number of excess rights offer shares applied for by
the shareholder.
Letters of allocation in respect of the rights offer will be issued in
dematerialised form. An electronic record for certificated shareholders will be
maintained by Computershare Investor Services (Proprietary) Limited.
Dematerialised shareholders will have their accounts updated with their rights
offer entitlement by their Central Securities Depository Participant broker.
This will enable both dematerialised and certificated shareholders to sell or
renounce some or all of their rights offer shares in accordance with the
procedures set out in the circular.
4. Underwriting
The underwriter, being Calulo Resources, has agreed to underwrite the rights
offer in full. Calulo Resources will be entitled to a total commission of R642
024, being 5% of the total amount committed and which amount does not exceed the
current market rate payable to independent underwriters.
5. Pro forma financial effects of the rights offer
The table below sets out the pro forma financial effects of the rights offer on
Absolute based on the published interim unaudited results for the six months
ended 31 December 2007 and assumes the rights offer was effective for income
statement purposes for the six months commencing on 1 July 2007 and for balance
sheet purposes on 31 December 2007. The pro forma financial effects, which are
the responsibility of the directors, have been prepared for illustrative
purposes only and, due to their nature, may not fairly present Absolute`s
financial position, changes in equity, cash flow or the results of its
operations.
Unaudit Pro %
ed forma
Six Six Change
months months
ended ended
Dec-07 Dec-07
"Before "After"
"
Weighted average shares 739 708 953 716
in issue (`000)
Loss per share for -0.44 -0.38 14.2%
period (cents)
Headline loss per share -0.43 -0.37 12.1%
for period (cents)
Number of shares in 739 708 953 716 28.9%
issue (`000)
Net asset value per 0.21 1.51 612.3%
share (cents)
Tangible net asset value -1.93 -0.15 92.2%
per share (cents)
Assumptions
1. The "Before" column is extracted from the company`s latest published
unaudited results for the six months ended 31 December 2007.
2. The "After" column assumes 214 008 081 new shares at 6 cents per share is
fully subscribed as at 31 December 2007.
3. The proceeds from the rights offer are assumed to be applied towards
reducing the bank overdraft and shareholder borrowings and which borrowings
have already been advanced to Absolute by Calulo Resources in anticipation
of the rights offer and were applied towards funding the mining projects at
the Diamond Quartzite and Picture Stone quarries and working capital in
order to expand the business operations of the Absolute group.
4. Operating expenses have been increased by the estimated costs associated
with the rights offer, including the commission payable in terms of the
underwriting agreement. The adjustment of R942 000, before taxation,
relates to the cost of the circular and the commission and is not expected
to have a continuing effect on Absolute.
5. Finance charges have been reduced on the assumption that the proceeds of
the rights offer will also be applied to reduce the bank overdraft and the
long term loan account payable to Calulo Resources, which will result in a
reduction in interest paid, assumed at the prime rate, being the current
rate charged by both the Company`s bankers and Calulo Resources. The
adjustment has been limited to the finance charges in the income statement
and the adjustment is expected to have a continuing effect on the group
going forward.
6. The taxation effect has been assumed at 29% of the net adjustment, being
the corporate rate of taxation for the six months ended 31 December 2007.
6. Conditions precedent
There are no outstanding conditions precedent to the rights offer, but the
rights offer circular is subject to the approval of the JSE Limited and the
registration of the documentation by The Companies and Intellectual Property
Registration Office, which registration is expected to be approved on Thursday,
4 September 2008.
7. Salient dates and times in respect of the rights offer
2008
Last day to trade in Absolute shares Friday, 12
in order to settle trades by the September
record date for the rights offer and
to qualify to participate in the
rights offer (cum entitlement) on
Absolute shares commence trading ex- Monday, 15
rights on the JSE at 09:00 on September
Listing of and trading in the letters Monday, 15
of allocation commences at 09:00 on September
Record date for purposes of Friday, 19
determining the Absolute shareholders September
entitled to participate in the rights
offer at the close of business on
Circular and, where applicable, form Monday, 22
of instruction posted to shareholders September
on
Rights offer opens at 09:00 on Monday, 22
September
Holders of dematerialised Absolute Monday, 22
shares will have their accounts at September
their CSDP or broker automatically
credited with their letters of
allocation on
Holders of certificated Absolute Monday, 22
shares will have their letters of September
allocation credited to an electronic
register at the transfer secretaries
on
Last day for form of instruction to be Friday, 3
lodged with the transfer secretaries October
by holders of certificated Absolute
shares wishing to sell all or part of
their entitlement by 12:00 on
Last day to trade (LDT) in letters of Friday, 3
allocation in order to settle trades October
by the record date for the rights
offer and participate in the rights
offer at the close of business on
Listing and trading of rights offer Monday, 6
shares commences on the JSE at 09:00 October
on
Record date for letters of allocation Friday, 10
on October
Rights offer closes at 12:00 and Friday, 10
payment to be made and form of October
instruction lodged by holders of
certificated Absolute shares with the
transfer secretaries by that time on
(see note 2)
CSDP/broker accounts credited with Monday, 13
rights offer shares and debited with October
any payments due in respect of holders
of dematerialised rights offer shares
on
Rights offer shares certificates in Monday, 13
terms of the rights offer posted to October
holders of certificated rights offer
shares on or about
Refund cheques (if applicable) posted Monday, 13
to certificated shareholders on or October
about
Results of rights offer announced on Monday, 13
SENS on October
Results of rights offer published in Tuesday, 14
the press on October
Notes
1. All times referred to in the announcement are local times in South Africa.
2. Holders of dematerialised Absolute shares are required to notify their CSDP
or broker of the action they wish to take in respect of the rights offer in
the manner and by the time stipulated in the agreement governing the
relationship between the Absolute shareholder and his CSDP or broker.
3. Absolute share certificates may not be dematerialised or rematerialised
between Monday, 15 September 2008 and Friday, 19 September 2008, both days
inclusive.
4. CSDPs effect payment in respect of holders of dematerialised rights offer
shares on a delivery versus payment basis.
8. Circular to shareholders
A circular providing full details of the rights offer and incorporating the
letter of allocation in respect of certificated shareholders will be posted to
shareholders on or about 22 September 2008.
Johannesburg
29 August 2008
Sponsor
Arcay Moela Sponsors
(Proprietary) Limited
Date: 29/08/2008 07:42:01 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.
