| Wed 23 Jun 2010, 12:14 | | BFS - Blue Financial Services Limited - Update On Disclaimer of Conclusion |
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BFS
BFS
BFS - Blue Financial Services Limited - Update On Disclaimer of Conclusion
Issued on the Provisional Financial Information for the Year Ended 28
February 2010
BLUE FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 1996/006595/06
Share Code: BFS
ISIN: ZAE000083655
("the Company")
UPDATE ON DISCLAIMER OF CONCLUSION ISSUED ON THE PROVISIONAL FINANCIAL
INFORMATION FOR THE YEAR ENDED 28 FEBRUARY 2010("THE RESULTS")
Further to the announcement released by the JSE Limited on the Securities
Exchange News Service (SENS) of the JSE, shareholders` attention is drawn to
the following:
The Company announced on 10 June 2010 that it had entered into a
Subscription Agreement with the Mayibuye Group (Proprietary) Limited
("Mayibuye") whereby Mayibuye will subscribe for R163 million ordinary
shares in the Company and in addition will provide loan financing of R300
million.
The disclaimer of conclusion issued by the Company`s independent auditors,
Deloitte & Touche ("Deloitte") was issued as a result of the Mayibuye
transaction being a key component to restore the Group to profitability. As
a result of the transaction not yet becoming unconditional and further
uncertainties as indicated in the basis for disclaimer of conclusion, the
disclaimer of conclusion was issued by Deloitte due to the significance of
the uncertainties in this regard.
For purposes of issuing an audit opinion once the audited financial
statements for the year ended 28 February 2010 have been finalised, all
further developments with regard to the fulfillment of the conditions
precedent, the further uncertainties and any other factors prevalent at that
time will be considered.
Shareholders are also referred to the reviewed financial results for the
year ended 28 February 2010, released on 21 June 2010 on SENS.
Several factors concerning these results should be taken into consideration:
As disclosed, Blue incurred a loss for the year of R1 030 million. Included
in these losses are significant and unusual write-downs and impairments of
various financial assets, which have been prudently assessed in line with
the challenging trading conditions and take into account the status of the
Company and its required Recapitalisation. A portion of these write-downs
and impairments are not deemed to be recurring in nature.
The Company believes that the decision taken regarding these write-down and
impairments will contribute to providing a solid foundation from which the
Company can be rebuilt.
Mayibuye is engaging the Company, its shareholders and principal funders
regarding its Recapitalisation strategy.
Apart from obtaining the necessary regulatory approvals, the status of the
remaining key conditions precedent are as follows:
Conclusion of Pinebridge Global Emerging Markets Partners II, L.P. and
Pinebridge Capital Partners LLC ("Pinebridge") (previously AIG Global
Emerging Markets Partners II, L.P. and AIG Capital Partners LLC,
respectively) settlement agreement with Mayibuye. Discussions between the
parties are ongoing.
Conclusion of the terms of the R300 million loan financing to be provided to
Blue by Mayibuye are being discussed with the Company.
Conclusion of the Restructuring Agreements with existing debt funders -
discussions have already commenced between Mayibuye and existing funders.
In conclusion, the board acknowledges that the successful implementation of
the Recapitalisation is vital to the future of the Company and can restore
the Company to profitability. The Company is monitoring the situation on an
ongoing basis and will appraise shareholders as the transaction develops
over the next few weeks.
23 June 2010
Designated Advisor: Grindrod Bank Limited
Financial Adviser: NM Rothschild & Sons (South Africa) (Proprietary) Limited
Date: 23/06/2010 12:14:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
