| Wed 26 May 2010, 15:59 | | RAC - Racec Group Limited - Rights offer declaration announcement |
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RAC
RAC
RAC - Racec Group Limited - Rights offer declaration announcement
RACEC GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/006153/06)
Share code: RAC & ISIN: ZAE000105409
("RACEC" or "the company")
RIGHTS OFFER DECLARATION ANNOUNCEMENT
1. INTRODUCTION
Shareholders are hereby advised that RACEC intends to proceed with a fully
underwritten renounceable rights offer whereby the company will issue 25 000
007 new RACEC shares at an issue price of 40 cents per share in order to
raise R10 million ("the rights offer").
2. RATIONALE AND PURPOSE OF THE RIGHTS OFFER
RACEC has recently been awarded two large electrical projects with a total
contract value of approximately R140 million namely, the Electrical
Installation at the Cape Town Container Terminal on behalf of Transnet
Limited and the N1 Street Lighting Installation on behalf of the Western
Cape Provincial Administration. A further large contract for the
rehabilitation of a railway in North West Africa is expected to be signed in
due course ("the contracts"). Having considered the company`s current
working capital and in order to fulfil its obligations in terms of the
contracts, RACEC requires additional working capital. Consequently, RACEC
and Solethu Civils (Proprietary) Limited ("Solethu Civils" or "the
underwriter") have entered into the loan and underwriting agreement whereby
Solethu Civils have agreed to loan the amount of R10 million to RACEC. This
will allow RACEC to facilitate the effective performance of the contracts
and to ensure completion at the earliest possible date. The loan bears
interest at the prime interest rate plus 2% (two percent), which amount will
be payable on finalisation of the rights offer. To facilitate the repayment
of the loan, the directors have elected to initiate the rights offer.
3. SALIENT TERMS OF THE RIGHTS OFFER
RACEC hereby offers for subscription, by way of a rights offer to
shareholders, 25 000 007 shares in the ratio of seventeen rights offer
shares for every 100 shares held at the close of business on the record date
of the rights offer, Friday, 18 June 2010 at 40 cents per share. The rights
offer price represents a 9% premium to the 30 day volume weighted average
price and a 21% premium to the closing price on 14 May 2010.
In terms of the loan and underwriting agreement and in order to allow
Solethu Civils to increase their investment in RACEC, certain of the
directors of RACEC who are also shareholders, being C J Harrod, G L Harrod,
W Ollewagen and M J Uys have agreed with the underwriter not to follow or
renounce their rights in terms of the rights offer and accordingly, have
provided Solethu Civils with written irrevocable undertakings in this
respect.
Set out in the table below are the shareholders of RACEC who have provided
written irrevocable undertakings:
Name of shareholder Current % prior to
shareholding rights offer
Charles and Tertia 17 290 000 11.8
Harrod Trust
Ollewagen Family 15 260 000 10.4
Trust
Mike and Jen Uys 13 969 840 9.5
Trust No 2
Gary Harrod Family 9 860 000 6.7
Trust
Total 56 379 840 38.4
4. UNDERWRITING
In terms of the loan and underwriting agreement, the underwriter has
irrevocably undertaken to underwrite the rights offer at an issue price of
40 cents per share, on the basis that any rights offer shares not subscribed
for by RACEC shareholders shall be allocated to the underwriter.
As Solethu Civils has agreed to loan to RACEC an amount of R10 million,
which amount bears interest at the prime interest rate plus 2% (two percent)
from the date on which the funds are received by RACEC, being 15 April 2010,
no underwriting fee is or will become payable by RACEC to the underwriter in
respect of the rights offer.
5. SUSPENSIVE CONDITONS TO THE RIGHTS OFFER
The following suspensive conditions pertaining to the loan and underwriting
agreement were met on or before 22 April 2010:
- the board resolving in writing to enter into the loan and underwriting
agreement, and to undertake the rights offer on the basis of the loan
and underwriting agreement;
- the board of directors of Solethu Civils resolving to enter into the
loan and underwriting agreement; and
- the written irrevocable undertakings being received by Solethu Civils.
6. SALIENT DATES AND TIMES
The salient dates and times of the rights offer are set out below:
2010
Last day to trade in RACEC shares in order to Thursday, 10 June
settle trades by the record date for the rights
offer and to qualify to participate in the rights
offer (cum entitlements)
Listing and trading of letters of allocation on Friday, 11 June
the JSE while shares trade ex rights commences at
09:00
Record date for the rights offer at the close of Friday, 18 June
business on
Rights offer opens at 09:00 on Monday, 21 June
Rights offer circular and form of instruction Monday, 21 June
(where applicable) posted to shareholders
Dematerialised shareholders will have their Monday, 21 June
accounts with their CSDP or broker automatically
credited with their entitlements
Certificated shareholders will have their letters Monday, 21 June
of allocation credited to an electronic register
at the transfer secretaries
Last day to trade in letters of allocation in Friday, 2 July
order to settle trades by the close of the rights
offer and participate in the rights offer at the
close of business
Last day for forms of instruction of certificated Friday, 2 July
shareholders wishing to sell all or part of their
entitlement to be lodged with the transfer
secretaries by 12:00
Listing and trading of rights offer shares on the Monday, 5 July
JSE commences at 09:00
Record date for letters of allocation for Friday, 9 July
purposes of determining the holders of letters of
allocation that are entitled to subscribe for the
rights offer shares
Rights offer closes at 12:00 on Friday, 9 July
Payment to be made and forms of instruction to be
lodged by certificated shareholders with the
transfer secretaries by 12:00 on (see note 2
below)
Expected date from which CSDP/broker accounts are Monday, 12 July
credited with rights offer shares and debited
with any payments due in respect of
dematerialised rights offer shares
Rights offer share certificates posted to Monday, 12 July
certificated shareholders on or about
Results of rights offer released on SENS Monday, 12 July
Notes:
1. All times referred to in this circular 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, 11 June and Friday, 18 June 2010, both days
inclusive.
4. 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.
5. CSDPs effect payment in respect of dematerialised shareholders on
a delivery versus payment method.
7. EXCESS APPLICATIONS
No applications for rights offer shares in addition to those allocated to
you in terms of the rights offer will be accepted.
8. RESTRICTIONS ON THE RIGHTS OFFER
The rights offer shares will not be freely transferable from South Africa
and will have to be dealt with in terms of the Exchange Control Regulations.
Shareholders who are resident outside the common monetary area should obtain
advice as to whether any governmental and/or other legal consent is required
and/or whether any other formality must be observed to follow their rights
in terms of the rights offer.
9. FURTHER ANNOUNCEMENT AND CIRCULAR
RACEC intends to release a finalisation date announcement on SENS on or
about Friday, 4 June 2010 and post a circular, containing full details of
the rights offer, on or about Monday, 21 June 2010.
Cape Town
26 May 2010
Designated Adviser
Merchantec Capital
Date: 26/05/2010 15:59:02 Produced by the JSE SENS Department.
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