| Mon 23 Nov 2009, 16:38 | | WEA - Wearne - Announcement Of A Rights Offer |
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WEA
WEA
WEA - Wearne - Announcement Of A Rights Offer
WG WEARNE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/005983/06)
JSE code: WEA
ISIN: ZAE000078002
("Wearne" or "the company")
ANNOUNCEMENT OF A RIGHTS OFFER
1. Introduction and terms of the rights offer
Wearne has finalised terms in order to raise up to R30 905 552 by way of
a renounceable rights offer of up to 77 263 879 new ordinary shares
("rights shares") to its ordinary shareholders at a price of R0.40 per
rights offer share ("rights offer price") in the ratio of 42 rights offer
shares for every 100 Wearne shares held ("rights offer"). The rights
offer price represents a 25.4% discount to the 30 day volume weighted
average price of Wearne ordinary shares on 18 November 2009 of R0.5364.
The rights shares, once issued, will rank pari passu in all respects with
the existing issued Wearne shares.
2. Subscription agreement and claw-back component of the rights offer
A subscription agreement dated 18 November 2009 has been entered into
between the company and certain individuals, trusts and companies ("the
subscribers") in terms of which the subscribers have agreed to advance an
amount of R23 million to Wearne and to subscribe for 57 500 000 of the
rights shares ("subscription shares") at the rights offer price ("the
subscription"), subject to the conditions precedent set out in 3 below.
Details of the subscribers and their subscriptions are:
Subscriber Number of
shares
subscribed for
The Samant Trust* 7 500 000
SJ Wearne* 5 000 000
JC Wearne* 2 500 000
AJ Wearne 5 000 000
Anco Besigheids Trust* 12 500 000
Willchrest Besigheids Trust* 12 500 000
Second Street Mall (Pty) 5 000 000
Limited
Gayatri Paper Mills (Pty) 5 000 000
Limited
WP van der Merwe** 2 500 000
Total 57 500 000
*Director or associate of a director
**Designated adviser
In terms of the subscription agreement and the rights offer, parties
other than the subscribers who have subscribed for rights shares in terms
of the rights offer ("rights participants") will be allocated rights
shares as follows:
- the first 19 763 879 new Wearne shares subscribed for by rights
participants (or their renouncees) will be allocated to them from
the 19 763 879 rights shares that have not been subscribed for by
the subscribers;
- the next 2 500 000 new Wearne shares subscribed for by rights
participants (or their renouncees) will be clawed back and allocated
from the subscription shares that have been subscribed for by WP van
der Merwe;
- the next 8 539 625 new Wearne shares subscribed for by rights
participants (or their renouncees) will be clawed back and allocated
from the subscription shares that have been subscribed for by the
Willchrest Besigheids Trust and Anco Besigheids Trust pro rata to
the number of subscription shares subscribed for by each of them;
- the next 36 460 375 of the new Wearne shares subscribed for by
rights participants (or their renouncees) will be clawed back and
allocated from the subscription shares that have been subscribed for
by The Samant Trust, SJ Wearne, JC Wearne, AJ Wearne, Anco
Besigheids Trust, Willchrest Besigheids Trust (in respect of the
balance of the subscription shares subscribed for by Anco Besigheids
Trust and Willchrest Besigheids Trust after giving effect to the
claw back and allocation of the 8 539 625 rights shares referred to
above), pro rata to the number of subscription shares subscribed for
by each of them, after deducting the 8 539 625 rights shares
subscribed for by Anco Besigheids Trust and Willchrest Besigheids
Trust which would have already been clawed back and allocated as set
out above; and
- the balance of the new Wearne shares subscribed for by rights
participants (or their renounces) will be clawed back and allocated
from the subscription shares that have been subscribed for by
Gayatri Paper Mills and Second Street Mall, pro rata to the number
of subscription shares subscribed for by each of them.
By virtue of the fact that The Samant Trust, SJ Wearne, JC Wearne, Anco
Besigheids Trust and Willchrest Besigheids Trust have undertaken to each
other, Gayatri Paper Mills and Second Street Mall that they will not
follow nor renounce their rights in terms of the claw-back offer portion
of the rights offer, the above allocation mechanism will effectively
guarantee Gayatri Paper Mills and Second Street Mall a full allocation of
the portion of the subscription shares subscribed for by them in terms of
the subscription agreement, effectively enhancing the BEE shareholding of
Wearne.
No underwriting fee or liquidity fee is payable to any of the
subscribers.
3. Conditions precedent
The subscription by all subscribers is subject to the following
conditions precedent by not later than 31 January 2010:
- to the extent required, all necessary regulatory approvals shall
have been obtained from all relevant regulatory authorities; and
- the JSE Limited ("JSE") shall have granted a listing in respect of
the subscription shares.
The subscription by Second Street Mall (Pty) Limited and Gayatri Paper
Mills (Pty) Limited is also conditional upon certain of Wearne`s funders
granting "payment holidays" to Wearne for the months of December 2009 and
January 2010 by not later than 30 November 2009.
The subscription by Anco Besigheids Trust and Willchrest Besigheids Trust
is also conditional upon HWP Scholtz and N Heyns being released from
certain suretyships by them in favour of Absa Bank Limited for the
obligations of certain subsidiaries of Wearne by not later than 30
November 2009.
4. Purpose of the rights offer and use of the proceeds
The main purpose of the rights offer is to raise capital in order to
enhance the company`s cash position in order to meet the company`s
working capital requirements.
The main purposes of the subscription are to ensure that a minimum of
R23 million is raised by the company in terms of the rights offer and to
increase the company`s BEE shareholding in order to assist the company in
securing the award of new tenders, contracts and mining licences.
5. Financial effects of the rights offer
The unaudited pro forma financial effects of the rights offer, for which
the directors are responsible, are provided for illustrative purposes
only to show the effect thereof on loss, diluted loss, headline loss and
diluted headline loss per share as if the rights offer had taken effect
on 1 March 2009 and on net asset value and net tangible asset value per
share as if the rights offer had taken effect on 31 August 2009. Because
of their nature, the unaudited pro forma financial effects may not fairly
present the company`s financial position, changes in equity, results of
operations and cash flows. The unaudited pro forma financial effects
have been compiled from the published unaudited results for the six
months ended 31 August 2009 and are presented in a manner consistent with
the format and accounting policies adopted by Wearne and have been
adjusted as described in the notes below:
Before the After the %
rights rights change
offer offer
Loss per share (cents) (7.10) (5.00) 29.6
Diluted loss per share (cents) (7.22) (5.08) 29.6
Headline loss per share (cents) (6.31) (4.59) 27.3
Diluted headline loss per share (6.41) (4.67) 27.1
(cents)
Net asset value per share (cents) 132.63 104.97 (20.9)
Net tangible asset value per share 96.71 79.67 (17.6)
(cents)*
Weighted average number of shares 183 301 260 565 42.2
in issue (000)
Fully diluted weighted average 206 400 283 664 37.4
number of shares in issue (000)
Shares in issue at period end 183 962 261 226 42.0
(000)
* excludes deferred tax liability related to intangible assets
Notes:
The information as reflected in the "Before the rights offer" column
has been extracted from the company`s consolidated unaudited results
for the six months ended 31 August 2009.
The effects relating to loss per share, diluted loss per share,
headline loss per share and diluted headline loss per share are based
on the following assumptions and information:
the rights offer was effective 1 March 2009;
R30 905 552 was received pursuant to the subscription for the
77 263 879 rights shares; and
no adjustments were made to reflect any benefit (income or interest
earned / saved) to be derived from the proceeds of the rights offer
in terms of the "Guide on pro forma financial information" issued by
the South African Institute of Chartered Accountants dated September
2005. Management is nevertheless of the opinion that the proceeds of
the issue of the rights shares will be used in a manner which will be
to the benefit of shareholders.
The effects relating to the net asset value per share and net
tangible asset value per share are based on the following assumptions
and information:
the rights offer was effective 31 August 2009;
R30 905 552 was received pursuant to the subscription for the
77 263 879 rights shares; and
expenses relating to the rights offer amount to R0.7 million and were
written off against share premium.
6. Further announcements and circular
Further announcements will be made in due course relating the fulfilment
of the conditions precedent.
A circular to shareholders, giving full details of the rights offer, will
be mailed to shareholders in due course.
Randburg
23 November 2009
Designated Adviser
Vunani Corporate Finance
Legal adviser
Fluxmans Inc.
Date: 23/11/2009 16:38:01 Produced by the JSE SENS Department.
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