| Thu 8 Apr 2010, 12:11 | | COM - Comair Limited - Terms of the Comair renounceable rights offer |
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COM - Comair Limited - Terms of the Comair renounceable rights offer
Comair Limited
(Registration number 1967/006783/06
Incorporated in the Republic of South Africa
Share Code: COM
ISIN Code: ZAE000029823
("Comair" or "the Company")
TERMS OF THE COMAIR RENOUNCEABLE RIGHTS OFFER
1. INTRODUCTION
Shareholders are referred to an announcement published on SENS on
Wednesday, 10 March 2010 where Comair announced its intention to raise
R124,517,647 by way of a fully underwritten renounceable rights offer of
69,176,471 new Comair ordinary shares of 1 cent each ("Rights Offer
Shares") to qualifying Comair ordinary shareholders and Comair `A`
ordinary shareholders, that are eligible to participate (collectively
"Shareholders") ("Rights Offer"). The Rights Offer Shares will be issued
at a share price of 180 cents per Rights Offer Share ("Rights Offer
Price") in the ratio of 14 rights for every 100 Comair ordinary shares or
Comair `A` ordinary shares (collectively "Shares") held on the record
date for the Rights Offer, being Friday, 30 April 2010 ("Record Date").
2. RATIONALE FOR THE RIGHTS OFFER
In its release of interim results for the six months ended 31 December
2009, Comair announced its intention to upgrade a portion of its aircraft
fleet to the next generation Boeing 737-800 aircraft. The planned upgrade
of the Comair fleet will contribute to operational efficiency and
environmental sustainability. Comair has been able to secure favourable
pricing from Boeing for the acquisition of these aircraft, with intended
delivery dates from 2011 to 2015.
The capital raised through the Rights Offer will be utilised as the
initial down payment to Boeing for the acquisition of the new fleet of
aircraft. The balance of the funding for the new fleet will be raised
from existing debt markets and existing cash resources.
3. TERMS OF THE RIGHTS OFFER
In terms of the Rights Offer, 69,176,471 Rights Offer Shares will be
offered for subscription to Shareholders on the basis of 14 new Rights
Offer Shares for every 100 Shares held, for subscription at 180 cents per
Rights Offer Share. The Rights Offer will give all Shareholders recorded
in the register of shareholders on the Record Date for the Rights Offer
an equal opportunity to participate in the Rights Offer.
The Rights Offer Price represents a discount of 35.4% to the 30 day
volume-weighted average price of Shares on the JSE as at 26 March 2010.
Shareholders are invited to apply for additional Rights Offer Shares over
and above their entitlement.
Should there be excess Rights Offer Shares available for allocation after
all Rights Offer Shares have been taken up in terms of the Rights Offer,
these will be allocated equitably by the directors of Comair, who will
allocate any or all excess applications in an equitable manner taking
into consideration the number of Shares held by the Shareholder prior to
the allocation, Rights Offer Shares subscribed for in terms of the Rights
Offer and excess Rights Offer Shares applied for.
Allocations in terms of the excess applications for additional Rights
Offer Shares for each Shareholder shall not exceed an amount equal to the
number of Rights Offer Shares to which a Shareholder is entitled to as at
the Record Date.
The Rights Offer Shares issued will rank pari passu with the existing
issued Shares.
4. UNDERWRITING
BB Investment Company (Proprietary) Limited ("BB Investment"), a wholly
owned subsidiary of The Bidvest Group Limited, has agreed to fully
underwrite the Rights Offer for an underwriting fee of 4% of the amount
underwritten. The underwriting agreement is subject to certain
conditions, which is normal for a transaction of this nature. Further
details of the underwriting agreement are set out in the circular to
Shareholders to be posted to Shareholders on Monday, 3 May 2010
("Circular").
5. CONDITIONS PRECEDENT
The Rights Offer is subject to registration by the 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.
The underwriting agreement is subject to, inter alia the finalisation
date of the Rights Offer occurring on or before 23 April 2010.
6. FINANCIAL EFFECTS OF THE RIGHTS OFFER
The unaudited pro forma financial effects of Comair after the Rights
Offer are set out below. It has been assumed for purposes of the
unaudited pro-forma financial effects that the Rights Offer took place
with effect from 1 July 2009.
Pro forma financial effects for the six months ended 31 December 2009
Unaudited
Unaudited Pro forma
financial financial Percentage
information information Change
EPS (cents) 8.1 7.7 (6.0%)
Diluted EPS (cents) 8.1 7.6 (6.6%)
HEPS (cents) 8.1 7.7 (6.0%)
Diluted HEPS (cents) 8.1 7.6 (6.6%)
NAV per share (cents) 134 139 3.7%
TNAV per share (cents) 134 139 3.7%
Ordinary shares in issue 400,814 469,990 16.5%
(`000) (net of treasury
shares
Weighted average number of 400,814 469,990 17.3%
ordinary shares in issue
(`000)
Diluted weighted average 404,510 473,686 17.1%
number of ordinary shares
in issue (`000)
Notes and assumptions:
1. The unaudited financial information has been extracted from the
unaudited interim results of Comair for the six months ended 31 December
2009.
2. The pro forma adjustments to the income statement have been calculated
on the assumption that the proceeds from the Rights
Offer were received on 1 July 2009.
3. The pro forma adjustments to the balance sheet have been calculated on
the assumption that the proceeds were received on
31 December 2009.
4. The Rights Offer Share Price of 180 cents per share has been used for
the pro forma adjustments with 69,176,471 Ordinary Shares being issued for a
total quantum of R124,517,647.
5. It is assumed that the proceeds (R115,980,471) after netting off the
underwriting fee and transaction costs from the Rights Offer will be held at
a bank for the 6 month period and will earn interest income at an interest
rate of 8% per annum.
6. A tax rate of 28% has been used on the interest impact.
7. The underwriting fee of R4,980,705 and estimated directly attributable
transaction costs of R3,556,471, relating to the Rights Offer, are
capitalized against the share premium account. Transaction costs relate to
the fees paid to professional financial advisers, attorneys, and compliance
fees and are not expected to have a continuing effect on Comair.
7. SALIENT DATES AND TIMES
Last day to trade in Shares in order to Thursday, 22 April 2010
participate in the Rights Offer (cum entitlement)
Shares commence trading ex-entitlement at 09:00 Friday, 23 April 2010
on
Listing of and trading in the letters of Friday, 23 April 2010
allocation on the JSE commences at 09:00 on
Record Date for the Rights Offer Friday, 30 April 2010
Rights Offer Circular and form of instruction, Monday, 3 May 2010
where applicable, mailed to Shareholders
Rights Offer opens at 09:00 on Monday, 3 May 2010
Letters of allocation credited to an electronic Monday, 3 May 2010
account held at the transfer secretaries in
respect of holders of certificated shares
CSDP or broker accounts credited with Monday, 3 May 2010
entitlements in respect of holders of
dematerialised Shares
Underwriting agreement becomes irrevocable at Friday, 14 May 2010
16:30 (see note 6)
Last day for trading letters of allocation on the Friday, 14 May 2010
JSE
Listing of Rights Offer Shares and trading Monday, 17 May 2010
therein on the JSE commences at 09:00 on
Rights Offer closes at 12:00 (note 2) on Friday, 21 May 2010
Payment to be made and form of instruction to be Friday, 21 May 2010
lodged with the transfer secretaries by holders
of certificated Shares by 12:00 on
Record Date for the letters of allocation Friday, 21 May 2010
Excess applications allocated Monday, 24 May 2010
Rights Offer Shares issued on or about Monday, 24 May 2010
CSDP or broker accounts in respect of holders of Monday, 24 May 2010
dematerialised Shares debited and updated with
Rights Offer Shares and share certificates mailed
to certificated shareholders by registered mail
on or about
Results of the Rights Offer announced on SENS Monday, 24 May 2010
Results of the Rights Offer published in the Tuesday, 25 May 2010
press
CSDP or broker accounts in respect of Wednesday, 26 May 2010
dematerialised Shares debited and updated with
excess Rights Offer Shares, where applicable, and
share certificates mailed to certificated
Shareholders who have been allocated excess
shares, by registered mail on or about
Refund cheques, if applicable, mailed to Wednesday, 26 May 2010
certificated Shareholders in respect of excess
applications, on or about
Notes:
1. All times referred to in this announcement are local times in South
Africa.
2. 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 custody agreement.
3. Share certificates may not be dematerialised or rematerialised between
Friday, 23 April 2010 and Friday, 30 April 2010, both days inclusive.
4. To the extent that the Rights are accepted, dematerialised Shareholders
will have their accounts at their CSDP automatically credited with their
rights and certificated Shareholders will have their rights credited to an
account at Computershare Investor Services.
5. CSDPs effect payment in respect of dematerialised Shareholders on a
delivery versus payment method.
6. In the unlikely event that the underwriting agreement is terminated,
Shareholders who have taken up their rights will be allowed to withdraw such
acceptances. Details of the acceptance and withdrawal terms will be fully
set out in the Circular.
8. POSTING OF RIGHTS OFFER CIRCULAR
Shareholders are advised that a Circular containing full details of the
terms of the Rights Offer and a form of instruction in respect of a
letter of allocation will be mailed to all Shareholders recorded in the
register on the Record Date on or about Monday, 3 May 2010.
9. Finalisation announcement
It is anticipated that the finalisation announcement for the Rights Offer
will be released on SENS on Thursday, 15 April 2010 and published in the
South African press on Friday, 16 April 2010.
Johannesburg
8 April 2010
Investment bank and transaction sponsor
Investec Bank Limited
Attorneys
Edward Nathan Sonnenbergs
Sponsor
Rand Merchant Bank
Date: 08/04/2010 12:11:03 Produced by the JSE SENS Department.
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