| Thu 29 Oct 2009, 9:00 | | ILA - Iliad Africa Limited - Issue of options to BEE consortium |
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ILA
ILA
ILA - Iliad Africa Limited - Issue of options to BEE consortium
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA ISIN: ZAE000015038
("Iliad" or "the Company")
ISSUE OF OPTIONS TO BEE CONSORTIUM
1 Introduction
On 9 December 2004, Iliad entered into an agreement with a consortium led
and controlled by the Women Private Equity Fund (One) ("the WPEF")
(collectively, "the BEE Consortium"). In terms of the agreement, the BEE
Consortium acquired 4 081 268 Iliad ordinary shares ("Iliad shares"), 12
243 804 "A" shares and as an indivisible part of the "A" shares, options to
acquire 12 243 804 Iliad shares.
Iliad is committed to Black Economic Empowerment ("BEE") and wishes to
retain the BEE Consortium`s strategic shareholding. As a result, on 28
October 2009, Iliad entered into an addendum and variation agreement with
the BEE Consortium thereby amending certain principle terms relating to the
options previously granted to the BEE Consortium ("the transaction").
2 Background to the BEE Consortium
The WPEF is a private equity fund which, together with its fund manager,
Women Private Equity Fund Managers (Pty) Limited, is focused on the
empowerment of women. It was founded by respected and experienced black
businesswomen with the aim of promoting gender and black economic
empowerment. It is focused on investing in high growth businesses in
sectors where women play and can play a key role.
3 Rationale
Iliad is committed to BEE and the transaction is being implemented in the
context of Iliad`s overall BEE strategy. The transaction will provide the
BEE Consortium with the opportunity, over time, to increase its ordinary
shareholding in Iliad with the objective of achieving a minimum 10%
ownership.
4 Salient terms of the transaction
Salient features of the transaction include inter alia;
4.1 The BEE Consortium has been granted an extension to the time period
within which the options to subscribe for 12 243 804 Iliad shares may
be exercised. Such options may now be exercised at any time on or
after 1 January 2010 and prior to 31 December 2014 ("the options");
4.2 On or before 31 December 2012, the options are exercisable at a strike
price of R10.50 less any accumulated abnormal dividend, per Iliad
share;
4.3 On or subsequent to 1 January 2013, the options are exercisable at a
strike price of R10.50 increased by a hurdle rate of 3.5% per annum
compounded daily less any accumulated abnormal dividend, per Iliad
share;
4.4 In the event of corporate activity occurring prior to 31 December 2012
and the offer price, or distribution accruing to shareholders by
virtue of such corporate activity, is equal to or less than R10.50 per
Iliad share, then in such event, the strike price of the options
exercised shall be an amount equal to the offer price or distribution
contemplated by that corporate activity less a 10% discount;
4.5 The BEE Consortium undertakes that, save for the exception in 4.6
below, it will not dispose of, pledge or otherwise encumber its
current shareholding in Iliad or any other Iliad shares acquired in
terms of the exercise of options, before 31 December 2012; and
4.6 Sanski 52 Investments (Pty) Limited, a member of the BEE Consortium,
shall be entitled to sell so many Iliad shares as does not result in
the aggregate shareholding of the BEE Consortium equating to less than
10% of Iliad`s voting share capital.
5 Fairness Opinion
The transaction is classified as a specific issue to a related party in
terms of the Listings Requirements of the JSE Limited ("JSE") and,
accordingly, requires an opinion from an independent professional expert
("the IPE") detailing whether the terms of the transaction are fair as far
as the shareholders of Iliad are concerned. Bridge Capital Advisors (Pty)
Limited has been appointed as the IPE.
6 Conditions precedent
The transaction is subject, inter alia, to the fulfilment of the following
conditions precedent:
6.1 The procurement of a fairness opinion ruling that the terms of the
transaction are fair to Iliad shareholders;
6.2 The approval by the "A" shareholders of the amendment of the terms of
the "A" shares;
6.3 JSE and any other regulatory approvals being granted; and
6.4 Approval by the Iliad shareholders in a general meeting of all the
resolutions necessary to give effect to, and implement the transaction
including the alteration of the articles of association.
7 Pro forma financial effects of the transaction
As the transaction is a modification to the existing agreement and the fair
value of the modified options is less than the fair value that was
originally recognised, in terms of IFRS 2, no expense is required to be
recognised as a result of the transaction. Therefore, there are no pro
forma financial effects of the transaction based on the unaudited results
of Iliad for the six months ended 30 June 2009.
8 Circular to shareholders
A circular to shareholders setting out full details of the transaction and
incorporating the notice of the general meeting, the opinion of the IPE and
form of proxy will be distributed to shareholders in due course.
29 October 2009
Johannesburg
Sponsor: Bridge Capital Advisors (Pty) Limited
Attorneys: Fullard Mayer Morrison Inc.
Date: 29/10/2009 09:00:33 Produced by the JSE SENS Department.
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