| Fri 22 May 2009, 14:32 | | AFP - Alexander Forbes Preference Share Investments - Cautionary Announcement |
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AFP
AFP
AFP - Alexander Forbes Preference Share Investments - Cautionary Announcement
ALEXANDER FORBES PREFERENCE SHARE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2006/031561/06
Share code: AFP
ISIN code: ZAE000098067
("AF Pref" or "the company")
CAUTIONARY ANNOUNCEMENT
Linked unitholders of the company are referred to the funding structure, as
detailed in the pre-listing statement dated 7 July 2007, and are advised that,
given the current state of the international and local debt markets, a
consortium of investors, including funds managed by Actis LLP, funds affiliated
with Ethos Private Equity Limited and Ontario Teachers` Pension Plan Board
("Consortium"), identified an opportunity to negotiate with the holders of the
EURO 159 million High Yield Term Loan ("Term Loan"), which was issued by
Alexander Forbes Funding (Proprietary) Limited ("HYCo"), with a view to acquire
the Term Loan at a discount to par value.
The Consortium has today signed a sale and purchase agreement with the current
holders of the Term Loan (the "Sellers"), to acquire:
- the outstanding Term Loan, following a prepayment by HYCo of a portion of the
Term Loan at par from part of the proceeds received by HYCo under the cross-
currency hedge entered into by HYCo on or about 23 July 2007 ("the Remaining
Term Loan");
- the rights of the Sellers under the Put and Call Option Agreement concluded
amongst the Sellers and Alexander Forbes PIK Funding (Proprietary) Limited
("PIKCo") and relating to preference shares in the share capital of HYCo ("HYCo
Preference Shares") (the "Put and Call Option Rights"); and
-the HYCo Preference Shares which are beneficially owned by the Sellers
(together, the "Acquisition").
In addition, the Consortium will subscribe for non-redeemable preference shares
in the share capital of PIKCo ("PIKCo Preference Shares"), which preference
shares will be entitled to a preference dividend equal to 5% of any
distributions made to Alexander Forbes Holdco (Proprietary) Limited (the
Remaining Term Loan, Put and Call Option Rights, HYCo Preference Shares and
PIKCo Preference Shares are collectively referred to as, the "Relevant Assets").
The Acquisition has been approved by the South African Reserve Bank.
It is further intended that certain of the terms and conditions of the Remaining
Term Loan be amended to provide flexibility in the funding structure thereby
enabling Alexander Forbes Limited to execute on its strategic initiatives.
The Consortium intends to offer AF Pref, the Black Economic Empowerment
shareholders and the Management shareholders the opportunity to purchase a
portion of the Relevant Assets from it, in proportion to their current
shareholdings in Alexander Forbes Equity Holdings (Proprietary) Limited.
In order for AF Pref to acquire its proportionate share of the Relevant Assets
(the "Transaction"), it is proposed that AF Pref will undertake a rights offer
of new linked units ("Rights Offer") and request certain approvals at a general
meeting to enable the Transaction and Rights Offer to take place. A further
announcement, containing additional details of the Transaction and the Rights
Offer will be published on SENS and in the press in due course.
As such, the Transaction and Rights Offer may have a material effect on the
price of the linked units. Accordingly, linked unitholders are advised to
exercise caution when dealing in their linked units, until a further
announcement is made.
22 May 2009
Sandton
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 22/05/2009 14:32:01 Produced by the JSE SENS Department.
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