| Wed 15 Apr 2009, 11:29 | | MKX - Milkworx Limited - Salient Terms and Dates of the Proposed Rights Offer |
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MKX
MKX
MKX - Milkworx Limited - Salient Terms and Dates of the Proposed Rights Offer
and Renewal of Cautionary Announcement
MILKWORX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/011074/06)
Share code: MKX & ISIN: ZAE000058020
("Milkworx" or "the company")
SALIENT TERMS AND DATES OF THE PROPOSED RIGHTS OFFER AND RENEWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Shareholders are referred to the announcement released on SENS on 14
October 2008, in terms of which they were advised that the company intended
to proceed with a specific issue of shares for cash, the capitalisation of
loan accounts, a specific repurchase of shares and a rights offer.
Shareholders were subsequently advised via a SENS announcement dated 12
February 2009 that at a general meeting of shareholders, all the
resolutions required to implement the specific issue of shares for cash,
the capitalisation of loan accounts and the specific repurchase of shares
("the first phase of the planned restructuring of the company") had been
approved by the requisite number of shareholders.
The company now intends, subject to the conditions precedent set out in
paragraph 5 below, to proceed with the second phase of the restructuring
exercise, being the implementation of a fully underwritten renounceable
rights offer of 233 733 088 new ordinary shares of 1 cent each ("rights
offer shares") to Milkworx shareholders at a subscription price of 2 cents
per rights offer share and in the ratio of one rights offer share for every
four Milkworx shares held ("the rights offer"), in order to raise
approximately R4 674 662.
2. Purpose of the Rights Offer
The principle purpose of the rights offer is to provide Milkworx with
additional working capital which will enable it to expand its business
operations through, inter alia, the reduction of debt and the optimisation
of existing plant and equipment.
3. Underwriting
The rights offer has been fully underwritten by Inshare (Proprietary)
Limited and confirmation of funding has been provided to the JSE Limited
("the JSE"). The total cost of the underwriting is R233 733.
4. Pro forma financial effects of the rights offer on Milkworx
The table below sets out the unaudited pro forma financial effects of the
rights offer on Milkworx based on the published unaudited interim results
for the six months ended 31 December 2008 and the unaudited pro forma
financial effects of the first phase of the planned restructuring of the
company, as detailed in paragraph 1 above. The unaudited pro forma
financial information has been prepared in order to show the effects of the
the rights offer, assuming that the already implemented first phase of the
planned restructuring and the rights offer took place to their full extent
on 1 July 2008 for purposes of the income statement and for the six months
ended and as at 31 December 2008 for purpose of the balance sheet. 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 Milkworx`s financial position, changes in equity,
cash flow or the results of its operations.
Pro forma Pro forma % Change
Before After
Earnings (0.1) (0.1) 11%
Headline earnings (0.1) (0.1) 11%
Net asset value 2.1 2.1 -1%
Tangible net asset value 2.1 2.1 -1%
Weighted average number 932 466 601 1 166 199 25%
of shares in issue 689
No. of shares in issue 934 932 354 1 168 665 25%
442
Assumptions:
Balance sheet
1. The combined pro forma effects at 31 December 2008 show the published
unaudited interim results as at 31 December 2008 as adjusted for the
unaudited pro forma financial effects of the first phase of the planned
restructuring of the company, the summary of which was published in the
company`s results announcement on SENS on 05 February 2009.
2. The "After" Column shows the effect of the Rights Offer to shareholders on
the latest published financial information, based on the following
assumptions:
a: 233 733 088 new shares at 2 cents per share is fully subscribed at 31
December 2008;
b: R4 674 662 is assumed to have been raised though the rights offer to
shareholders; and
c: The proceeds from the rights offer are assumed to be applied to
firstly the bank overdraft and then to bank balances.
Income statement
1. The combined pro forma effects for the period ended 31 December 2008 show
the published unaudited interim results for the six months ended 31
December 2008 as adjusted for the unaudited pro forma financial effects of
the first phase of the planned restructuring of the company, the summary of
which was published in the company`s results announcement on SENS on 05
February 2009.
2. The "After" Column shows the Rights Offer to shareholders on the latest
published pro forma financial information based on the following
assumptions:
a: Finance charges have been reduced by R222 924.31, being the actual
interest incurred on the bank overdraft for the six months ended 31
December 2008 at prime rate of Absa Bank Limited from time to time.
The interest adjustment is expected to have a continuing effect on the
company going forward.
b: Costs in relation to the circular, amounting to approximately R420 000
have been assumed. The costs of the circular are once off in nature
and not expected to have a continuing effect.
c: Notional taxation at 28% has been calculated.
d: No interest received has been assumed on any positive bank balance
adjustments.
5. Conditions precedent
The conditions precedent to the rights offer as at the date of this
announcement include:
- the approval of the rights offer circular by the JSE Limited; and
- the registration of the rights offer circular and letter of allocation
by the Registrar of Companies
6. Salient dates and times
2009
Last day to trade in Milkworx shares in Thursday, 30 April
order to settle trades by the record date
for the rights offer and to qualify to
participate in the rights offer (cum
entitlement) on
Monday, 4 May
Milkworx shares commence trading ex-
rights on the JSE at 09:00 on
Listing of and trading in the letters of Monday, 4 May
allocation commences at 09:00 on (5.34)
Record date for purposes of determining Friday, 8 May
the Milkworx shareholders entitled to
participate in the rights offer at the
close of business on
Form of instruction posted to Monday, 11 May
shareholders on
Rights offer opens at 09:00 on Monday, 11 May
Holders of dematerialised Milkworx shares Monday, 11 May
will have their custody accounts at their
CSDP or broker automatically credited
with their letters of allocation on
Holders of certificated Milkworx shares Monday, 11 May
will have their letters of allocation
credited to an electronic register at the
transfer secretaries on
Last day for form of instruction to be Friday, 22 May
lodged with the transfer secretaries by
holders of certificated Milkworx shares
wishing to sell all or part of their
entitlement by 12:00 on
Last day to trade (LDT) in letters of Friday, 22 May
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 offer Monday, 25 May
shares commences on the JSE at 09:00 on
Record date for letters of allocation on Friday, 29 May
Rights offer closes at 12:00 and payment Friday, 29 May
to be made and form of instruction lodged
by holders of certificated Milkworx
shares with the transfer secretaries by
that time on (see note 2)
CSDP/broker accounts credited with rights Monday, 1 June
offer shares and debited with any
payments due in respect of holders of
dematerialised rights offer shares on
Rights offer shares certificates in terms Monday, 1 June
of the rights offer posted to holders of
certificated rights offer shares on or
about
Results of rights offer announced on SENS Monday, 1 June
on
Notes:
(i) All times referred to in the announcement are local times in South Africa.
(ii) Holders of dematerialised Milkworx 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 Mikworx shareholder and his CSDP or broker.
(iii)Milkworx share certificates may not be dematerialised or rematerialised
between Monday, 4 May 2009 and Friday, 8 May 2009, both days inclusive.
CSDPs effect payment in respect of holders of dematerialised rights offer
shares on a delivery versus payment basis.
7. Circular to shareholders
A circular containing full details of the rights offer will be posted to
Milkworx shareholders on or about Monday, 11 May 2009.
8. General
This announcement does not constitute an offer to any person in any
jurisdiction to whom or in which such offer is unlawful.
9. Renewal of Cautionary Announcement
Shareholders are referred to the cautionary announcement dated 13 March
2009 and are advised that the negotiations referred to therein are still in
progress and, if successfully concluded, may have a material effect on
the price at which the company`s securities trade on the JSE. Shareholders
are accordingly advised to continue to exercise caution when dealing in the
company`s securities until a full announcement is made.
Johannesburg
15 April 2009
Designated Advisor Corporate Advisor
Arcay Moela Sponsors Arcay Corporate Finance
(Proprietary) Limited (Proprietary) Limited
Date: 15/04/2009 11:29:01 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.
