| Tue 11 Aug 2009, 14:52 | | PGL - Pallinghurst Resources Limited - Capital Raising Of R800 Million By Way |
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PGL
PGL
PGL - Pallinghurst Resources Limited - Capital Raising Of R800 Million By Way
Of A Renounceable Rights Offer To All Shareholders
PALLINGHURST RESOURCES LIMITED
(Previously Pallinghurst Resources (Guernsey) Limited)
(Incorporated in Guernsey)
(Registration number 47656)
Share code on the BSX: PALLRES ISIN: GG00B27Y8Z93
Share code on the JSE: PGL
("Pallinghurst" or "the Company")
CAPITAL RAISING OF R800 MILLION BY WAY OF A RENOUNCEABLE RIGHTS OFFER TO ALL
SHAREHOLDERS
1. Introduction
The board of directors ("Directors") of Pallinghurst is pleased to announce,
in advance of the commencement of the renounceable rights offer to all
shareholders ("Rights Offer") as detailed herein, that the Company has pre-
placed and received irrevocable underwriting commitments for 228,571,376
shares ("Rights Offer Shares") at a price of R3.50 per Rights Offer Share
("Rights Offer Price") for an aggregate consideration of R800 million
(representing 100% of the total Rights Offer Shares available in the Rights
Offer).
Since its incorporation, Pallinghurst, in conjunction with its co-investors,
has established four unique investment platforms ("Investment Platforms"),
which the Directors and Pallinghurst (Cayman) GP L.P, the Company`s
investment manager ("Investment Manager"), believe are significantly advanced
in achieving the strategic objectives that were set out for each Investment
Platform at the time of the Company`s initial investment therein.
With three of the four Investment Platforms nearing and/or achieving
operating status, the Rights Offer proceeds will enable the Company,
alongside its co-investors, to participate in its pro rata funding
entitlement to each Investment Platform. The Directors and the Investment
Manager believe that the dilution by the Company in the Investment Platforms,
at their current stage of development and at relatively modest investment
valuations, would not be in the best interests of the Company and its
shareholders ("Shareholders"). To this end, the Directors have resolved to
implement the Rights Offer on the terms and subject to the conditions set out
herein.
2. Terms of the Rights Offer
As set out in paragraph 3 below, in advance of the commencement of the Rights
Offer, the Company has pre-placed ("Pre-placement") and received irrevocable
underwriting commitments for 228,571,376 Rights Offer Shares at the Rights
Offer Price representing 100% of the total Rights Offer Shares available in
the Rights Offer.
To afford all Shareholders the opportunity to participate the Rights Offer,
the Company will implement the Rights Offer through the offer of 228,571,376
Rights Offer Shares to Shareholders at the Rights Offer Price in the ratio of
92.452 Rights Offer Shares for every 100 shares currently in issue ("Rights
Offer Entitlement").
The Rights Offer Price represents a 12.00% discount to the 30-day volume
weighted average price of a Pallinghurst share listed on the JSE and a 15.66%
discount to the closing price of a Pallinghurst share listed on the JSE
Limited ("JSE") on Wednesday, 8 July 2009, being the day on which the Rights
Offer Price was determined.
3. Pre-placement and Underwriting
3.1 Pre-placement
In advance of the Rights Offer, the Company has entered into written
agreements ("Subscription Agreements") with certain existing Shareholders
("Pre-placement Participants") in terms of which the Pre-placement
Participants have irrevocably undertaken to subscribe for 127,752,391 Rights
Offer Shares ("Pre-placement Shares") at the Rights Offer Price for an
aggregate consideration of approximately R447 million ("Pre-placement
Commitment"). Under the terms of the Subscription Agreements, the Company
will receive the proceeds from the Pre-placement Shares 5 business days prior
to the record date of the Rights Offer, which is anticipated to be on or
about Friday, 28 August 2009.
108,243,230 of the Pre-placement Shares represent the Pre-placement
Participants` Rights Offer Entitlement, being those Rights Offer Shares to
which such Pre-placement Participants are irrevocably entitled ("Firm Placed
Rights Offer Shares"). The Firm Placed Rights Offer Shares will be issued to
the Pre-placement Participants on the first business day following the record
date of the Rights Offer.
19,509,161 of the Pre-placement Shares represent irrevocable applications for
Rights Offer Shares by Pre-placement Participants in excess of their Rights
Offer Entitlement, being Rights Offer Shares whose allotment and issue to Pre-
placement Participants is conditional upon Shareholders who are not Pre-
placement Participants and to whom such Rights Offer Shares represent their
Rights Offer Entitlement ("Remaining Shareholders") not taking-up, disposing
of or renouncing such Rights Offer Shares to a third party ("Conditionally
Placed Rights Offer Shares") in the Rights Offer. Conditionally Placed Rights
Offer Shares, if any, will be issued to Pre-placement Participants on the 2nd
business day following the closing of the Rights Offer, which is anticipated
to be on or about Wednesday, 30 September 2009 ("Second Issue Date").
3.2 Underwriting
Pallinghurst has entered into underwriting arrangements ("Underwriting
Agreements") with Oasis Asset Management Limited, Oasis Crescent Capital
(Proprietary) Limited and Trinity Asset Management (Proprietary) Limited
(collectively the "Underwriters"), whereby the Underwriters have irrevocably
agreed to collectively underwrite 100,818,985 Rights Offer Shares
("Underwritten Rights Offer Shares") at the Rights Offer Price for an
aggregate consideration of R353 million ("Underwriting Commitment"). To the
extent that the Remaining Shareholders do not take-up, dispose of or renounce
their Rights Offer Entitlement to a third party, the Underwriters will, on
the Second Issue Date, subscribe for such number of Rights Offer Shares up to
a maximum of the Underwritten Rights Offer Shares. The allocation of the
Underwritten Rights Offer Shares, if any, to the Underwriters will rank in
priority to the irrevocable subscriptions for Conditionally Placed Rights
Offer Shares by Pre-Placement Participants and the application in the Rights
Offer by Remaining Shareholders for Shares in excess of their Rights Offer
Entitlement ("Excess Applicantions").
As consideration for the Underwriting Commitment, the Underwriters will
collectively receive an underwriting fee of R10.6 million representing 3% of
the Underwriting Commitment which will be payable by the Company to the
Underwriters on the Second Issue Date.
4. The Rights Offer
Remaining Shareholders will be afforded the opportunity to participate in the
Rights Offer, by either taking-up, disposing of, or renouncing, as the case
may be, all or part of their Rights Offer Entitlement and/or to apply for
Excess Applications. Excess Applications, whether by Pre-placement
Participants who have applied for Conditionally Placed Rights Offer Shares
and/or Remaining Shareholders, will be allocated and excess Rights Offer
Shares issued on an equitable basis, provided such excess Rights Offer Shares
are available for issue, on the Second Issue Date.
The Rights Offer will be implemented on the JSE and in Rand only and will be
made to all Shareholders who, for the avoidance of doubt, will include:
- Shareholders whose shares are registered and traded on the Bermuda Stock
Exchange ("BSX") register; and
- Remaining Shareholders who are entitled to take-up such number of
Conditionally Placed Rights Offer Shares allocated to Pre-placement
Participants, equal to their Rights Offer Entitlement.
Accordingly, all Shareholders will be afforded the opportunity to participate
in the Rights Offer, with all Rights Offer Shares issued pursuant to their
listing on the JSE.
Further details of the Rights Offer will be included in the circular to
Shareholders which is anticipated to be posted to Shareholders on or about
Monday, 7 September 2009 ("Circular").
5. Intention of the Directors and Investment Manger
The Directors and partners of the Investment Manager collectively have a
Rights Offer Entitlement to 10,169,720 Rights Offer Shares. In accordance
with their undertaking to Shareholders to invest an incremental USD5 million
in the Company under the terms of the Rights Offer, the Directors and
partners of the Investment Manager (as Pre-Placement Participants) have
subscribed for 11,214,286 Rights Offer Shares for an aggregate consideration
of R39,250,001, 1,044,566 of which represents Excess Applications and
collectively amounts to 110% of their Rights Offer Entitlement.
6. Overview of Investment Platforms
6.1 Platinum Group Metals ("PGMs")
Pallinghurst has investments in and rights over various PGM properties
situated in the Bushveld Igneous Complex of South Africa, an area which is
estimated to hold in excess of 80% of the world`s platinum resources,
including a controlling interest in Platmin Limited, a PGM producer listed on
the Toronto Stock Exchange, AIM of the London Stock Exchange plc and the JSE.
The PGM strategy is being pursued through a unique partnership between
Pallinghurst, its co-investors and the Bakgatla-Ba-Kgafela Tribe, a
traditional community and tribe established according to indigenous custom,
who own land and mineral rights in the Pilanesberg area.
6.2 Steel Feed Corporation
Competition for raw material supplies (particularly iron ore and manganese)
to the global steel industry is intensifying and the major steel producers
are seeking to secure their raw material supplies through equity ownership of
mining companies. Pallinghurst is developing a Steel Feed Materials
Investment Platform through two vehicles, Tshipi Manganese Mining
(Proprietary) Limited and Jupiter Mines Limited (a company listed on the
Australian Stock Exchange), for the supply of mainly manganese and also iron
ore. This strategy is at an early stage of development. Regardless, Posco, a
Pallinghurst co-investor and one of the world`s largest steel companies, has
recently invested in each of these vehicles.
6.3 Coloured Gemstones
Pallinghurst has identified the coloured gemstone industry as having
attractive dynamics and prospects. The coloured gemstone industry has
historically been overlooked, and is fragmented and undercapitalised. This
presents a unique opportunity to create an integrated coloured gemstone
producer, simplifying the coloured gemstone value chain and thereby enhancing
investment returns. Pallinghurst and certain co-investors are jointly the
controlling shareholder of AIM-listed Gemfields plc ("Gemfields") - one of
the world`s largest emerald producers. Gemfields is committed to bringing
ethically produced, conflict-free coloured gemstones of certified provenance
directly from the mine to the market.
6.4 Faberge
The Faberge name is one of the most revered names in history and to this day
remains synonymous with artistry and craftsmanship of the highest order.
Pallinghurst, in conjunction with certain co-investors, acquired the global
portfolio of trademarks, licences and associated rights relating to the
Faberge name from Unilever in 2007. Pallinghurst has reunited the Faberge
name with the Faberge family, which had lost the rights in a legal settlement
more than 50 years ago. In September this year, Faberge will celebrate its
renaissance by unveiling to the world its first high jewellery collection
since 1917.
7. Salient dates and times
2009
Finalisation date announcement released on Friday, 21 August
SENS
Last date to trade in shares on the JSE for Friday, 28 August
settlement by the record date and to be
recorded as a Shareholder
Shares trade ex rights on the JSE Monday, 31 August
Listing and trading of letters of allocation Monday, 31 August
on the JSE from the commencement of trade on
Record date Friday, 4
September
Issue of Firm Placed Rights Offer Shares to Monday, 7
Pre-placement Participants September
Listing and trading on the JSE of Firm Placed Monday, 7
Rights Offer Shares commences at 09h00 on September
Rights Offer opens at 09h00 on Monday, 7
September
Circular including a form of instruction, Monday, 7
where applicable, mailed to Shareholders September
Last date to trade in the letters of Friday, 18
allocation on the JSE for settlement by 12h00 September
on Monday, 28 September, 2009
Listing of Rights Offer Shares on the JSE at Monday, 21
09h00 on September
Payment and forms of instruction to be Monday, 28
received by the Company`s transfer secretary September
in South Africa by 12h00 on
Rights Offer closes at 12h00 on Monday, 28
September
Record date for the letters of allocation Monday, 28
September
Results of Rights Offer and basis of Tuesday, 29
allocations of excess Rights Offer Shares September
released on SENS
Underwriters subscribe for the Underwritten Wednesday, 30
Rights Offer Shares September
Rights Offer Shares in respect of applications Wednesday, 30
for Excess Rights Offer Shares allocated and September
issued
Pre-placement Participants are refunded the Friday, 2 October
portion of their subscription proceeds
relating to Conditionally Placed Rights Offer
Shares taken up by the Remaining Shareholders
pursuant to the Rights Offer and applicants
for excess Rights Offer Shares are refunded
that portion of their application proceeds
relating to excess Rights Offer Shares not
issued to them
Notes:
1. No shares may be dematerialised or re-materialised from the commencement
of trade on Monday, 31 August 2009 to Friday, 4 September 2009.
2. No removal of shares between the JSE and the BSX may occur from the
commencement of trade on Monday, 31 August 2009 to Monday, 28 September 2009.
3. These dates and times may be subject to further change. All such changes
will be announced on SENS.
4. Above times are South African times.
8. Conditions precedent
The Rights Offer is subject to the fulfilment of the following conditions
precedent:
- the JSE granting a listing of the Rights Offer Shares to be allotted and
issued pursuant to the Rights Offer;
- the JSE granting a listing of the renounceable (nil paid) letters of
allocation in respect of the Rights Offer; and
- the registration by the South African Companies and Intellectual
Property Registration Office of all documents required to be registered in
terms of the South African Companies Act (Act 61 of 1973), as amended, for
the implementation of the Rights Offer.
9. Financial effects of the Rights Offer
A summary of the unaudited pro forma financial effects after the
implementation of the Rights Offer is set out in the table below. In this
context, it has been assumed that the Rights Offer was implemented with
effect from 1 January 2008 and 31 December 2008 for income statement and
balance sheet purposes, respectively. The Directors are responsible for the
preparation of the unaudited pro forma financial effects. The pro forma
financial effects set out below have been presented for illustrative purposes
only and may, because of their nature, not give a fair reflection of
Pallinghurst`s results, financial position and changes in equity post the
implementation of the Rights Offer.
Before After
Rights Rights
Offer1 Offer2,3 Change
(USD) (USD) (%)
Loss per share (0.19) (0.10) 48.04
Headline loss per (0.19) (0.10) 48.04
share
NAV per share 0.65 0.54 (16.95)
Tangible NAV per share 0.65 0.54 (16.95)
Number of Shares in 247,232,484 475,803,860 92.45
issue 4
1. The figures in the "Before Rights Offer" column have been extracted
without adjustment from the published audited results for the year ended 31
December 2008.
2. Transaction costs (including the underwriting fee as set out in
paragraph 3.2 above) estimated at USD4,430 million have been taken into
account against share premium as costs directly attributable to the issue of
shares.
3. Assuming the Company raises R800 million before expenses (approximately
USD100 million based on an assumed exchange rate of R8:USD1).
4. Assuming all 228,571,376 Rights Offer Shares are issued.
10. Further announcements and the Circular
Pallinghurst intends, subject to the fulfilment of the conditions precedent,
to release a finalisation date announcement on SENS on Friday, 21 August 2009
and post the Circular on or about Monday, 7 September 2009.
11 August 2009
Guernsey
Investment bank
Investec Corporate Finance
JSE Sponsor
Investec
Investment manager
PALLINGHURST
Legal advisors in South Africa
Edward Nathan Sonnenbergs
Legal advisors in Guernsey
Ozannes
Reporting accountants
SAB&T
Date: 11/08/2009 14:52:01 Produced by the JSE SENS Department.
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