| Tue 9 Sep 2008, 14:51 | | FRT - Faritec Holdings Limited - Implementation of long-term debtors |
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FRT
FRT
FRT - Faritec Holdings Limited - Implementation of long-term debtors
securitisation funding programme
FARITEC HOLDINGS LIMITED
Registration number: 1998/004872/06
Share code: FRT
ISIN: ZAE000016838
("Faritec" or "the Company")
IMPLEMENTATION OF LONG-TERM DEBTORS SECURITISATION FUNDING PROGRAMME
1. INTRODUCTION
Shareholders are advised that Faritec has entered into a long-term debtors
securitisation funding programme ("the Programme`). In terms of this Programme,
Faritec has raised R100 million from investors in the Capital Markets at fixed
rates for an initial period of five years.
2. RATIONALE
The board of the company has taken a strategic decision to refinance the current
short term debt facilities with longer term secured finance. This has been done
for the following reasons:-
- The Company has grown its revenue organically and through acquisition, from
R530 million in 2006 to approximately R1.1 billion in 2008, resulting in a
monthly revenue run rate increase from R44 million per month to
approximately R100 million per month. This has been done without a
corresponding increase in the Company`s credit facilities. In addition to
the working capital and trade credit facilities provided by the Company`s
bankers, the Company has been using expensive trade finance from its
suppliers in the last year to assist with the management of working capital
and trade credit facilities;
- To fund future growth, the Company expects to continue to grow in the
future, both organically and through acquisition and requires stable
funding at competitive rates to fund this anticipated growth;
- The Company has secured access to stable funding for the next 5 years at
competitive rates by issuing zaAA rated debentures to investors in the
Capital Markets on the strength of its debtors book which features a
diversified portfolio of prominent blue chip clients;
3. THE PROGRAMME IN SUMMARY
- In terms of the Programme, Faritec has sold certain trade debtors of
subsidiary entities to an independently owned special purpose entity, FRT
Debtors Finance (Pty) Ltd ("FRT Debtors Finance").
- FRT Debtors Finance has funded the purchase price paid to Faritec`s
subsidiary entities by issuing R100 million of Class A, 60 month secured,
non-amortising rated debentures. A wholly-owned subsidiary company of
Faritec has advanced a subordinated loan of R33 million to FRT Debtors
Finance in order to sufficiently over-collateralise the Class A debentures.
The Class A debentures have been awarded a zaAA credit rating by Global
Credit Ratings, and have been issued to investors in the Capital Markets.
The subordinated loan is unrated, and bears interest at variable rates.
- The Class A debentures bear interest at a fixed rate of 12,73 % nacq, and
the funding raised thereon has largely replaced the Company`s short term
banking and working capital facilities bearing interest in excess of the
prime rate.
- The Programme constitutes a single indivisible transaction, and the
effective date is 8 September 2008.
- The Programme has been authorised by the South African Reserve Bank to
issue commercial paper pursuant to a securitisation scheme in terms of
paragraph 14(1)(b)(ii) of the Securitisation Notice, published in
Government Gazette No. 30628 on 1 January 2008.
9 September 2008
Sponsor
Java Capital (Proprietary) Limited
Date: 09/09/2008 14:51:04 Produced by the JSE SENS Department.
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