| Thu 25 Feb 2010, 15:50 | | ELI - Ellies - Rights Offer |
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ELI
ELI
ELI - Ellies - Rights Offer
Ellies Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2007/007084/06)
JSE code: ELI ISIN: ZAE000103081
("Ellies")
RIGHTS OFFER
Ellies proposes to raise R100 million by undertaking a partially underwritten
rights offer in terms of which up to 50 000 000 new Ellies shares will be
issued at an issue price of R2.00 per share (the "rights offer").
RATIONALE FOR THE RIGHTS OFFER
In terms of an acquisition agreement concluded on 30 November 2007 between
Ellies and Ellies (Proprietary) Limited (a wholly owned subsidiary of Ellies)
(on the one hand) and RD Otto Family Investments (Proprietary) Limited (the
"Megatron vendor") (on the other hand), Ellies is liable to make payment to
the Megatron vendor of an amount of R64 968 273 arising from the purchase by
Ellies of the business of the Megatron vendor (as announced on SENS on 4
December 2007).
The additional funds raised by way of the rights offer will be used to fund
Ellies` current expansion programs, including the Digital Terrestrial
migration, expansion into domestic appliances, growth of electrical ranges,
and satellite-related business expected in 2010 as detailed in the unaudited
group results announcement released on SENS on 18 January 2010.
TERMS OF THE RIGHTS OFFER
In terms of the rights offer:
- Ellies shareholders will be offered 18.493 new Ellies shares for every
100 ordinary shares held by them on the record date for participation in
the rights offer;
- the subscription price will be R2.00 per rights offer share.
The anticipated timetable for the rights offer is as follows:
2010
Last day to trade in Ellies shares in order to Thursday, 18 March
participate in the rights offer
Listing and trading of letters of allocation on the Friday, 19 March
JSE
Ellies shares commence trading on the JSE ex-rights Friday, 19 March
offer entitlement
Record date for determination of shareholders
entitled to participate in the rights offer Friday, 26 March
(initial record date)
Rights offer opens at 09:00 on Monday, 29 March
Rights offer circular and forms of instruction Monday, 29 March
posted to shareholders, where applicable
Dematerialised shareholders will have their Monday, 29 March
accounts at their CSDP or broker automatically
credited with their entitlement
Certificated shareholders on the register will have Monday, 29 March
their entitlement credited to an account held with
the transfer secretaries
Last day to trade letters of allocation on the JSE Friday, 16 April
Maximum number of rights offer shares listed and Monday, 19 April
trading therein commences on the JSE
Rights offer closes at 12:00 on (see note 1) Friday, 23 April
Record date for letters of allocation (final record Friday, 23 April
date)
New Ellies shares issued Monday, 26 April
Dematerialised shareholders` accounts updated and Monday, 26 April
debited by CSDP or broker, and certificates posted
to certificated shareholders (in respect of the
rights offer shares)
Results of rights offer announced on SENS Monday, 26 April
Results of rights offer announced in the press Wednesday, 28 April
Certificates posted to certificated shareholders
(in respect of rights offer shares)
Refunds (if any) to certificated shareholders in Wednesday, 28 April
respect of unsuccessful applications made
Notes:
1. Dematerialised shareholders are required to inform their CSDP or broker
of their instructions in terms of the rights offer in the manner and
time stipulated in the agreement governing the relationship between the
shareholder and its CSDP or broker.
2. Share certificates may not be dematerialised or rematerialised between
Friday, 19 March 2010 and Friday, 26 March 2010, both days inclusive.
3. Dematerialised shareholders will have their accounts at their CSDP or
broker automatically credited with their rights and certificated
shareholders will have their rights credited to an account at Link
Market Services South Africa (Proprietary) Limited.
4. CSDPs effect payment in respect of dematerialised shareholders on a
delivery-versus-payment method.
5. The dates above are subject to change. Any changes will be announced on
SENS.
EXCESS SHARES
Ellies shareholders will have the right to apply for any excess rights offer
shares not taken up by other shareholders and any such excess shares will be
attributed equitably based on the number of shares held by the shareholder
concerned and the number of excess shares applied for, taking cognisance of
the number of shares and rights held by the shareholder as at the initial
record date, including those taken up as a result of the rights offer, and
the number of excess rights applied for by such shareholder.
FOREIGN SHAREHOLDERS
Introduction
Foreign shareholders may be affected by the rights offer, having regard to
prevailing laws in their relevant jurisdictions. It is the responsibility of
each foreign shareholder to satisfy himself/herself as to the full
observation of the laws and regulatory requirements of the relevant foreign
jurisdiction in connection with the rights offer, including the obtaining of
any governmental, exchange or other consents or the making of any filing
which may be required, the compliance with other necessary formalities and
the payment of any issue, transfer or other taxes or other requisite payments
due in such jurisdiction. The rights offer is governed by the laws of South
Africa and is subject to applicable laws and regulations, including the
exchange control regulations.
Any Ellies shareholder who is in doubt as to its position with respect to the
rights offer in any jurisdiction, including, without limitation, his/her tax
status, should consult an appropriate independent professional adviser in the
relevant jurisdiction without delay. Foreign shareholders are reminded that
they may dispose of their Ellies shares prior to the last date to trade, in
which case they will not participate in the rights offer.
Foreign shareholders accordingly must take their own advice on whether they
are entitled, after the rights offer, to continue beneficially to hold any
Ellies shares distributed to them and take the appropriate action in
accordance with that advice.
Note to US shareholders
The rights offer shares will not be registered with the US Securities and
Exchange Commission ("SEC") under the US Securities Act of 1933, as amended,
or any US state securities laws. Neither the SEC nor any US federal or state
securities commission has registered, approved or disapproved the rights
offer shares or passed comment or opinion upon the accuracy or adequacy of
this announcement. Any representation to the contrary is a criminal offence
in the US.
Ellies shareholders who are citizens or residents of the US are advised that
the rights offer shares have not been and will not be registered under the US
Securities Exchange Act of 1934, as amended.
UNDERWRITING
The Megatron vendor has agreed to partially underwrite the rights offer and
to subscribe for and pay to Ellies the subscription price that becomes due to
Ellies pursuant to the issue of shares under the rights offer for an amount
capped at R65 million, to the extent that other shareholders in Ellies do not
follow their rights under the rights offer.
As consideration for underwriting the rights offer, the Megatron vendor will
be entitled to a fee of 3% of its underwriting commitment (an aggregate fee
of R1 950 000 plus VAT).
FINANCIAL EFFECTS OF THE RIGHTS OFFER
The table below sets out the pro forma financial effects of the rights offer
based on Ellies` unaudited interim results for the interim period ended 31
October 2009. These financial effects are the responsibility of the directors
of Ellies and they have been prepared for illustrative purposes only, in
order to provide information about the financial results and position of
Ellies assuming that the rights offer had been implemented on 1 May 2009 and
31 October 2009, respectively.
The pro forma consolidated income statement and pro forma consolidated
balance sheet of Ellies for the interim period ended 31 October 2009 and the
explanatory notes thereto will be provided in the circular.
Due to its nature, the pro forma financial information may not give a fair
reflection of Ellies` financial position, changes in equity, results of
operations and cash flows subsequent to the rights offer.
The table below reflects the pro forma financial effects of the rights offer
on an Ellies shareholder:
Before the After the %
rights rights Change
offer offer after the
(cents)1 (cents) rights
offer
Earnings per share 14.47 13.53 -6.5
Headline earnings per share 14.47 13.53 -6.5
Net asset value per share 156.92 161.08 2.7
Net tangible asset value per share 76.54 93.23 21.8
Weighted average number of shares 270,674,399 320,674,399
in issue (`000)
Weighted average number of diluted 270,674,399 320,674,399
shares in issue (`000)
Notes and assumptions:
1 The figures set out in the "Before the rights offer" column above have
been extracted from the unaudited interim results of the group for the
six months ended 31 October 2009.
2 The rights offer is assumed to have been implemented on 01 May 2009 for
earnings and headline earnings per share purposes and on 30 October 2009
for net asset and tangible net asset value per share purposes.
3 50 000 000 rights offer shares are assumed to be issued pursuant to the
rights offer, thereby raising capital of R100m.
4 The proceeds of the rights offer, after settling the vendor liabilities
and estimated costs are assumed to have reduced the interest on the bank
overdraft.
5 The settling of the vendor liabilities are assumed to have reduced IFRS
implied interest.
6 All adjustments have a continuing effect.
A circular containing further details in relation to the rights offer will be
sent to Ellies shareholders within 28 days of the date of this announcement.
Johannesburg
25 February 2010
Corporate advisor, legal advisor and designated advisor
Java Capital (Proprietary) Limited
Reporting accountants and auditors
PKF Jhb Inc.
Date: 25/02/2010 15:50:01 Produced by the JSE SENS Department.
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