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BIO
BIO
BIO - Bioscience Brands - Terms And Salient Dates Of The Unconditional, Partly
Underwritten Renounceable Rights Offer
BIOSCIENCE BRANDS LIMITED
(formerly Wellco Health Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2005/005805/06)
("BioScience" or "the company")
ISIN Code: ZAE000115036 Share code: BIO
TERMS AND SALIENT DATES OF THE UNCONDITIONAL, PARTLY UNDERWRITTEN RENOUNCEABLE
RIGHTS OFFER TO BIOSCIENCE SHAREHOLDERS
INTRODUCTION AND PURPOSE OF THE RIGHTS OFFER
Shareholders are referred to the circular dated 13 August 2008, detailing, inter
alia, the specific issue of 1,174,522,399 ordinary shares for cash at a
subscription price of 3.5 cents per share, the acquisition of Bioharmony
(Proprietary) Limited ("Bioharmony") for a purchase consideration of
R28 924 574.63 and the acquisition of Aldabri 53 (Proprietary) Limited t/a
Muscle Science ("Muscle Science") for a purchase consideration of R14 575 425.38
("the circular").
The monies raised through the specific issue of shares for cash were used by the
company in part to settle creditors, many of whom had instituted action against
the company and the remainder to pay approximately R23 million towards the
combined R40 million cash portion of the purchase price for Bioharmony and
Muscle Science.
The principle purpose of the rights offer is to provide BioScience Brands with
additional financial resources to enable it to settle the loan of R11 909 000
advanced to it by Fluxrab Investments 163 (Proprietary) Limited ("Fluxrab") in
order to enable it to settle the outstanding portion of the purchase
consideration payable for the acquisition of Bioharmony and Muscle Science,
whilst any additional proceeds will be utilised for further acquisitions.
TERMS OF THE RIGHTS OFFER
Pursuant to the above, BioScience Brands is seeking to raise R31 822 100.80 via
a renounceable rights offer of 7 058 091 808 new ordinary shares of 0.01 cent
each to BioScience Brands shareholders recorded in the register at the close of
business on Friday, 2 January 2009, of which irrevocable undertakings not to
follow the rights offer have been secured for 6 148 888 928 new ordinary shares
from shareholders who participated in the specific issue of shares for cash
detailed in the circular ("the excluded shareholders"), resulting in a net
rights offer of 909 202 880 new ordinary shares, at a subscription price of 3.5
cents per rights offer share, in the ratio of four rights offer shares for every
one BioScience Brands share held. Accordingly, 909 202 880 rights will be
listed on the JSE Limited ("the JSE") on Monday, 24 December 2008 and a maximum
of 909 202 880 new shares will be listed on the JSE on Monday, 19 January 2009.
GENERAL
The rights offer is being made in accordance with the Companies Act and is only
addressed to persons to whom it may be lawfully made. By subscribing for any
rights shares you will be deemed to have represented and agreed that (a) you are
not (and any person for whom you are acting is not) (i) resident in any
jurisdiction in which such offer would be unlawful or (ii) a person to whom the
rights offer may not lawfully be made and (b)you have received all necessary
information required to make an informed investment decision.
MINIMUM SUBSCRIPTION AND PARTIAL UNDERWRITING
No minimum subscription is required. The rights offer is partly underwritten in
the amount of R12 891 716, representing 368 334 744 rights offer shares, which
is supported by an underwriting agreement. In addition, Mark Strydom, an
executive director of the company, has given an irrevocable undertaking to
follow 114 285 714 rights offer shares, through Fluxrab, in respect of R4 000
000 owed to him as a vendor of the Muscle Science acquisition. Furthermore,
John Black, the non-executive chairman of the company, has provided an
irrevocable undertaking to subscribe for 28 571 429 rights offer shares at 3.5
cents per share, totalling R1 million, in the event that there is a shortfall in
the rights offer up to R17 821 648. Shareholders are, however, advised that all
rights offer shares not taken up in terms of the rights offer will be available
for allocation to shareholders who wish to apply for a grater number of rights
offer shares than those offered to them in terms of the rights offer. Excess
allocations will be on the same terms and conditions as those applicable to the
rights offer entitlement and will be allocated to shareholders applying for such
in an equitable manner.
PRO FORMA FINANCIAL EFFECTS OF THE RIGHTS OFFER
The table below sets out the pro forma financial effects of the rights offer on
BioScience Brands based on the published audited results for the 16 months ended
30 June 2008 and assumes the rights offer was effective for income statement
purposes on 01 March 2007 and for balance sheet purposes 30 June 2008.
The pro forma financial effects, which are the responsibility of the directors,
have been prepared for illustrative purposes only and, because of their nature,
may not fairly present BioScience Brands` financial position, changes in equity,
cash flow or the results of its operations.
Before the After %
acquisition of Change
Phyto Nova
(cents) (cents)
Profit/(loss) per (2.80) (1.77) 36.73
share
Headline (2.54) (1.61) 36.74
profit/(loss) per
share
Net asset value per 2.38 2.53 6.20
share (cents)
Net tangible asset (0.11) (0.04) 58.63
value per share
(cents)
Shares in issue at 1,693,054,381 1,950,197,238 15.19
period end
Weighted average 446,020,463 703,163,320 57.65
shares in issue
Before the issue of After %
shares for the Change
rights offer
(cents) (cents)
Profit/(loss) per (1.77) (0.69) 61.21
share
Headline (1.61) (0.62) 61.57
profit/(loss) per
share
Net asset value per 2.53 2.85 12.67
share (cents)
Net tangible asset (0.04) 1.12 2610.77
value per share
(cents)
Shares in issue at 1,950,197,238 2,909,737,430 49.20
period end
Weighted average 703,163,320 1,662,703,512 136.46
shares in issue
Before the issue After %
of shares for Change
executive options
(cents) (cents)
Profit/(loss) per (0.69) (0.84) -22.90
share
Headline (0.62) (0.78) -26.10
profit/(loss) per
share
Net asset value per 2.85 2.75 -3.35
share (cents)
Net tangible asset 1.12 1.09 -3.35
value per share
(cents)
Shares in issue at 2,909,737,430 3,010,658,949 3.47
period end
Weighted average 1,662,703,512 1,763,625,031 6.07
shares in issue
Assumptions - Balance Sheet:
1. The first column shows the audited results of BioScience Brands for the
period as at 30 June 2008, which results were prepared in accordance with
International Financial Reporting Standards and the Companies Act of South
Africa.
2. The `Pro forma after Phyto Nova acquisition` column shows the adjustments
due to the purchase of the Phyto Nova business and brand ("the Phyto Nova
business") after the following assumptions were taken into account in the
Balance Sheet:
a. Consolidation of the Balance Sheet of the Phyto Nova seller, Thebe
Natural Medicines (Proprietary) Limited ("Thebe Natural Medicines"),
as extracted from the draft unaudited annual financial statements of
Thebe Natural Medicines as at 31 March 2008. The Phyto Nova business
was the only business conducted by Thebe Natural Medicines. The
company is satisfied with the quality of the unaudited annual
financial statements from which the information was extracted.
b. The Loan from Group Companies of R1 318 730 appearing in the Thebe
Natural Medicines Balance Sheet has been eliminated upon consolidation
as it is considered to be an inter company adjustment.
c. Intangibles relating to the Phyto Nova Brand of R8 040 869 was raised
on the consolidation.
d. The issue of 257 142 857 ordinary shares in BioScience Brands at a
price of 3.5 cents per share in settlement of the purchase price for
the Phyto Nova business, with each share having a par value of 0.01
cent.
e. The number of shares in issue at year end has been calculated as if
all shares issued were issued on 30 June 2008.
3. The `effects of the rights offer` column shows the adjustments due to the
rights offer to existing shareholders. In terms of the offer, all existing
shareholders, excluding the excluded shareholders, are offered 4 shares for
every share held, at a price of 3.5 cents per share, with each share having
a par value of 0.01 cent. It is assumed that the rights offer will be
taken up by all shareholders, excluding the excluded shareholders.
4. The premium on the issue of the shares has been credited to the share
premium account.
5. The `effects of the executive options` column illustrates an amount of 100
921 520 shares being issued to management as compensation for services
rendered, which have been assumed to be issued at a price of 3.5 cents per
share with each share having a par value of 0.01 cent. The specific issue
of shares to management for a 10% stake in the company are considered to be
in issue for the entire period. The cost of these shares amounts to
R3 532 253, and have been expensed in the income statement for the period
in accordance with IFRS 2, as they have been issued as compensation for
services rendered to date by management.
Assumptions - Income Statement
1. Column A shows the audited results of BioScience Brands for the 16 month
period ended 30 June 2008, prepared in accordance with International
Financial Reporting Standards and the Companies Act of South Africa.
2. The `Pro forma after Phyto Nova acquisition` column shows the adjustments
due to the purchase of the Phyto Nova business after the following
assumptions were taken into account in the Income Statement:
a. Consolidation of Thebe Natural Medicines Income Statement, as
extracted from the draft unaudited annual financial statements for the
year ended 31 March 2008, proportionately increased to cover a 16
month period in order to be comparable to the BioScience Income
Statement. The Phyto Nova business was the only business conducted by
Thebe Natural Medicines and income was earned evenly over the prior
year. The company is satisfied with the quality of the unaudited
annual financial statements from which the information was extracted.
b. Group Management Fees of R360 000 as well as Finance costs on Group
Interest Charges of R67 500 appearing in the Thebe Natural Medicines
Income Statement have been eliminated upon consolidation as it is
considered to be an inter-company adjustment.
c. The issue of 257 142 857 ordinary shares in BioScience Brands at a
price of 3.5 cents per share with each share having a par value of
0.01 cents.
d. The weighted average number of shares issued has been calculated as if
all shares issued were issued on the 1 March 2007 and have therefore
been in issue for the full 16 months up to 30 June 2008.
3. The `effects of the rights offer` column shows the adjustments due to the
rights offer which was offered to all BioScience Brands shareholders,
excluding the excluded shareholders, at 4 shares for every share held at a
price of 3.5 cents per share with each share having a par value of 0.01
cents. The weighted average number of shares increased due to the above
transaction.
4. For the purposes of effects of the rights offer` column, it was assumed
that the cash from the rights offer was received on 01 March 2007 and that
finance charges had not been incurred during the 16 month period, net of
notional taxation of 28%. No interest received on excess cash received has
been assumed.
5. The `effects of the executive options` column illustrates an amount of 100
921 520 shares being issued to management as compensation for services
rendered, which have been assumed to be issued at a price of 3.5 cents per
share with each share having a par value of 0.01 cent. The specific issue
of shares to management for a 10% stake in the company are considered to be
in issue for the entire period. The cost of these shares amounts to
R3 532 253, and have been expensed in the income statement for the period
in accordance with IFRS 2, as they have been issued as compensation for
services rendered to date by management.
6. The weighted average number of shares issued has been calculated as if all
shares issued were issued on the 01 March 2007 and have therefore been in
issue for the full 16 months up to 30 June 2008.
7. In accordance with its accounting policy, the company does not amortise its
brands and therefore no amortisation has been assumed.
SALIENT DATES AND TIMES
Shareholders are advised that the rights offer will open at 09:00 on Monday, 05
January 2009 and close at 12:00 on Friday, 23 January 2009. The salient dates
in respect of the rights offer are accordingly as follows:
2008
Finalisation date: Monday, 15 December
Last day to trade in BioScience Tuesday, 23 December
Brands shares in order to settle
trades by the record date for the
rights offer and to qualify to
participate in the rights offer
(cum entitlement) on:
BioScience Brands shares commence Wednesday, 24 December
trading ex-rights on the JSE at
09:00:
Listing of and trading in the Wednesday, 24 December
letters of allocation commences
at 09:00:
2009
Record date for purposes of Friday, 2 January
determining the BioScience Brands
shareholders entitled to
participate in the rights offer
at the close of business on:
Circular and, where applicable, Monday, 5 January
form of instruction posted to
shareholders on:
Rights offer opens at 09:00 on: Monday, 5 January
Holders of dematerialised Monday, 5 January
BioScience Brands shares will
have their accounts at their CSDP
or broker automatically credited
with their letters of allocation
on:
Holders of certificated Monday, 5 January
BioScience Brands shares will
have their letters of allocation
credited to an electronic
register at the transfer
secretaries on:
Last day for form of instruction Friday, 16 January
to be lodged with the transfer
secretaries by holders of
certificated BioScience Brands
shares wishing to sell all or
part of their entitlement by
12:00 on:
Last day to trade (LDT) in Friday, 16 January
letters of allocation in order to
settle trades 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 Monday, 19 January
offer shares commences on the JSE
at 09:00:
Record date for letters of Friday, 23 January
allocation on:
Rights offer closes at 12:00 and Friday, 23 January
payment to be made and form of
instruction lodged by holders of
certificated BioScience Brands
shares with the transfer
secretaries by that time on:
CSDP/broker accounts credited Monday, 26 January
with rights offer shares and
debited with any payments due in
respect of holders of
dematerialised rights offer
shares on:
Rights offer shares certificates Monday, 26 January
in terms of the rights offer
posted to holders of certificated
rights offer shares on or about:
Results of rights offer and basis Monday, 26 January
of excess allocations announced
on SENS on or about:
Share certificates in respect of Monday, 26 January
excess allocations posted to
certificated shareholders on or
about:
Accounts of dematerialised Monday, 26 January
shareholders updated in respect
of excess shares allocated at
their CSDP or broker on or about:
Cheques and/or refunding monies Monday, 26 January
in respect of unsuccessful
applications for additional
rights offer shares by
certificated shareholders posted
to the relevant applicants on or
about:
Notes:
1. All times referred to in the announcement are local times in South Africa.
2. Holders of dematerialised BioScience Brands 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 BioScience Brands shareholder and
his CSDP or broker.
3. BioScience Brands share certificates may not be dematerialised or
rematerialised between Wednesday, 24 December 2008 and Friday, 2 January
2009, both days inclusive.
4. CSDPs effect payment in respect of holders of dematerialised rights offer
shares on a delivery versus payment basis.
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 05 January 2009.
Johannesburg
11 December 2008
Designated Advisor
Arcay Moela Sponsors
(Proprietary) Limited
Date: 11/12/2008 11:58:22 Produced by the JSE SENS Department.
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