| Wed 1 Jul 2009, 14:49 | | VUN - Vunani - Proposed Rights Offer And Debt Restucturing |
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VUN
VUN
VUN - Vunani - Proposed Rights Offer And Debt Restucturing
VUNANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
JSE code: VUN
ISIN: ZAE000110359
("Vunani" or "the Company")
INFORMATION RELATING TO A PROPOSED RIGHTS OFFER, DEBT RESTRUCTURING, RELEASE
OF THE 2008 ANNUAL REPORT AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
PROPOSED RIGHTS OFFER AND DEBT RESTUCTURING
Background
In terms of an announcement dated 20 March 2009, Vunani shareholders were
advised that the decline in the share prices of certain of Vunani`s
empowerment investments resulted in a breach of certain of the debt covenant
ratios with a number of financial institutions which funded Vunani`s
participation in such investments ("Lenders"). Shareholders are advised that
Vunani and the Lenders entered into a Heads of Agreement ("Agreement") on 30
June 2009, to restructure Vunani`s existing debt and recapitalise Vunani to
the extent of R325.0 million, to ensure the continued sustainability of
Vunani and its subsidiaries ("the Restructuring").
Terms of the Restructuring
The Restructuring will be effected through a R325 million rights offer to
Vunani ordinary shareholders of 3 250 million new ordinary shares at 10 cents
per new ordinary share ("the rights offer"). Vunani Group (Proprietary)
Limited ("Vunani Group"), the controlling shareholder of Vunani, will
underwrite R313.6 million of the rights offer. The proposal containing the
principle terms on which Vunani Group will be funded to enable it to
underwrite the rights offer has been accepted by Vunani Group.
Of the R325 million to be raised by Vunani in terms of the rights offer,
R313.6 million will be used to repay debt.
As part of the Restructuring, Vunani will maintain its black ownership in
excess of 51%.
The Restructuring will be implemented pursuant to, inter alia:
- regulatory approvals to the extent required;
- conclusion and approval of an underwriting agreement between Vunani
Group and Vunani;
- conclusion of the funding agreement required for Vunani Group to effect
the underwriting; and
- the conclusion of the amendments to existing loan agreements.
It is anticipated that the Restructuring will be completed before the end of
October 2009. The actions taken and strategies implemented will provide
Vunani with a stronger balance sheet to withstand the current adverse market
conditions.
Financial effects of the Restructuring
The financial effects of the Restructuring will be released once the relevant
amendments to the existing loan agreements with the Lenders have been made.
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
Annual Report
The Agreement, which contains the principle terms of the Restructuring, was
signed on 30 June 2009. The Restructuring removes the material uncertainty
which may have cast significant doubt on the company`s ability to continue as
a going concern that was disclosed in the Group`s Reviewed Condensed
Consolidated Financial Results for the year ended 31 December 2008, released
on 31 March 2009. Accordingly, the annual report, including the audited
financial statements, is expected to be posted to shareholders by mid July
2009.
Condensed audited results
The condensed audited financial results for the year ended 31 December 2008
will be released on SENS on or about 6 July 2009.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution in dealing in the
Company`s ordinary shares on the JSE until such time as an announcement,
containing confirmation of the finalisation of the amendments to the existing
loan agreements and the financial effects of the Restructuring, is released.
Sandton
1 July 2009
Financial advisor to Vunani
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Lead Designated Adviser
Grindrod Bank Limited
Corporate Adviser and Joint Designated Adviser
Vunani Corporate Finance
Date: 01/07/2009 14:49:01 Produced by the JSE SENS Department.
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