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FRT
FRT
FRT - Faritec Holdings Limited - R20 Million underwritten rights offer
Faritec Holdings Limited
(Registration number 1998/004872/06)
Share code: FRT
ISIN: ZAE000016838
("Faritec" or "the company")
R20 MILLION UNDERWRITTEN RIGHTS OFFER
INTRODUCTION
Shareholders are advised that the board of directors of Faritec has resolved to
undertake an underwritten rights offer (the "rights offer") to shareholders in
order to raise R20 million.
RATIONALE
In order to ensure the sustainability of the business over the long term,
Faritec requires a capital injection. This is necessary to fund the short-term
working capital requirements of the business as well as the significant cost
cutting exercise which has been implemented. This capital will come from two
sources - firstly, R20 million from shareholders, and secondly, R10 million to
R15 million through the release of cash which currently underpins various
guarantees. This capital injection should provide a secure and sustainable
platform for future operations.
TERMS AND CONDITIONS OF THE RIGHTS OFFER
In terms of the rights offer:
Faritec shareholders will be offered 77.46 shares ("rights offer shares") for
every 100 shares held by them on the record date for participation in the rights
offer;
The subscription price will be 10 cents per rights offer share.
UNDERWRITING AND BRIDGING LOAN
Cornastone Enterprise Systems (Proprietary) Limited ("Cornastone"), Jay &
Jayendra (Proprietary) Limited ("J&J") and Simon Tomlinson and Peter Winn
("Management") have agreed to underwrite the rights offer in the following
proportions:
Cornastone - 62.5%;
J&J - 25.0%; and
Management - 12.5%.
As consideration for underwriting the rights offer the underwriters will be
entitled to a fee of 1% of their underwriting commitment (an aggregate fee of
R200 000).
As part of their underwriting commitment, Cornastone and Management have
advanced a R15 million bridging loan to Faritec (in proportion to their
underwriting commitment). The bridging loan will be advanced by no later than 11
March 2009, bears interest at the prime rate plus 2% and is repayable out of the
proceeds of the rights offer.
SALIENT DATES
The rights offer documentation is in the process of being prepared and it is
envisaged that the rights offer will open in late April 2009. An announcement
detailing the salient dates will be released on SENS and published in the press
closer to the opening of the rights offer.
10 March 2009
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
www.faritec.com
Date: 10/03/2009 16:59:09 Produced by the JSE SENS Department.
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