| Tue 9 Nov 2010, 16:46 | | BEG - Beige - Proposed Rights Offer and Withdrawal of Cautionary Announcement |
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BEG
BEG
BEG - Beige - Proposed Rights Offer and Withdrawal of Cautionary Announcement
BEIGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/006871/06)
Share code: BEG ISIN: ZAE000034161
("Beige" or "the Company" or "the Group")
PROPOSED RIGHTS OFFER AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the SENS announcements dated 2 July 2010, 10
August 2010, 30 August 2010, 17 September 2010 and 22 October 2010 and are
advised that Beige will proceed with a partially underwritten renounceable
rights offer to raise R25 000 000 through the issue of 25 000 000 new
variable rate, cumulative, non-participating, convertible, redeemable
preference shares ("preference shares") in an expected ratio of one new
preference share for every 65.29670 Beige ordinary shares held, at a
subscription price of R1.00 per preference share ("the rights offer"). The
final ratio will be confirmed following the implementation of the odd lot
offer as announced on SENS on 29 October 2010.
2. Terms of the Preference Shares
The preference shares carry a coupon rate of prime plus 2% and are
convertible into ordinary shares, at the election of the preference
shareholder and on a date not less than three years and one day after the
issue date, in a conversion ratio of 20 new ordinary shares for every one
preference share held. Preference shares not converted will be
automatically redeemed by the Company.
3. Purpose of the Rights Offer
The principle purpose of the rights offer is to provide Beige with
additional working capital which will be applied towards an overall
refinancing strategy for the Group and to the settlement of loan
obligations arising out of the redemption of the cumulative, non-
participating, convertible, redeemable preference shares ("the redeemed
preference shares") during October 2010.
The Board is of the opinion that the rights offer of the new preference
shares represents the fairest mechanism for the raising of fresh capital in
that it provides all shareholders with an opportunity to subscribe for the
rights offer preference shares in proportion to their existing ordinary
share shareholding.
4. Irrevocable Undertakings to Follow Rights and Underwriting Commitments
Certain Beige shareholders, including directors and associates, have
irrevocably undertaken to subscribe for the preference shares to which they
will become entitled to in terms of the rights offer and to underwrite the
rights offer up to a combined subscription and underwriting commitment
amount of R11 400 354.
5. Pro forma financial effects of the rights offer on Beige
The table below sets out the unaudited pro forma financial effects of the
rights offer on Beige based on the published unaudited interim results for
the six months ended 30 September 2010. The unaudited pro forma financial
information has been prepared in order to show the effects of the rights
offer, assuming that the rights offer took place on 1 April 2010 for
purposes of the income statement and for the six months ended 30 September
2010 for purpose of the balance sheet. The pro forma financial effects,
which are the responsibility of the directors, have been prepared for
illustrative purposes only and, due to their nature, may not fairly present
Beige`s financial position, changes in equity, cash flow or the results of
its operations.
Before 1 Post After
balance Change rights Change
sheet (%) offer 3 (%)
event 2
Earnings 0.0% -3.8%
per 0.52 0.52 0.50
share
(cents)
Headline 0.0% -3.8%
earnings 0.52 0.52 0.50
per
share
(cents)
Net -0.1% -0.4%
asset 13.53 13.52 13.48
value
per
share
(cents)
Tangible 0.0% -0.6%
net 7.72 7.72 7.68
asset
value
per
share
(cents)
Weighted 1 539 810 1 540 701 0.1% 1 540 701 0.1%
average
number
of
shares
in issue
(`000)
Number 1 539 810 1 540 701 0.1% 1 540 701 0.1%
of
shares
in issue
(`000)
Assumptions:
1. The "Before" financial information is based on Beige`s unaudited
results for the period ended 30 September 2010. The number of shares
in issue reflected in the "Before" column comprises 1 631 526 254
shares in issue at 30 September 2010, less 91 716 667 Beige shares
held as treasury shares.
2. The "Post balance sheet event" assumes:
* The reversal of the dividend of 8% per annum on the redeemed
preference shares for earnings per share and headline earnings per
share purposes. The reversal of the dividend on the redeemed
preference shares will have a continuing effect on Beige`s financial
results; and
* The redemption of existing preference shares of R15 000 000 partly via
existing cash resources and partly via conversion into new ordinary
shares for net asset value and tangible net asset value per share
purposes;
3. The "After Rights offer" assumes:
* The Redemption;
* Transaction costs of R636,250 relating to the rights offer. This
expense will not have a continuing effect on Beige`s financial
results;
* Finance costs on the net cash outflow in respect of the redemption of
existing preference shares and transaction costs at 9.94%, being the
average interest rate on bank borrowings (equating to the average
prime rate for the period) and taxation thereon at 28%. The interest
cost is not expected to be of a continuing nature as the proceeds of
the rights offer will be used to settle these borrowings;
* The issue of new preference shares of R25,000,000 in terms of the
rights offer. The proceeds of the preference shares will be applied
against existing borrowings. The payment of the dividend of prime
plus 2% per annum on the preference share issue on the basis that all
eligible shareholders subscribe for new preference shares. The payment
of the dividend is expected to be of a continuing nature.
6. Conditions precedent
The conditions precedent to the rights offer as at the date of this
announcement include:
- the approval of the rights offer circular and letter of allocation by
the JSE Limited; and
- the registration of the rights offer circular and letter of allocation
by the Registrar of Companies
7. Salient dates and times
The salient dates of the rights offer will be announced on SENS following
the approval by the JSE of the rights offer circular.
8. Circular to shareholders
A circular containing full details of the rights offer is in the process of
being prepared and will be posted to shareholders in due course.
9. General
The rights offer will not constitute an offer to any person in any
jurisdiction to whom or in which such offer is unlawful.
10. Withdrawal of Cautionary Announcement
Shareholders are advised that pursuant to the release of this announcement,
caution is no longer required when dealing in the Company`s securities.
Johannesburg
9 November 2010
Designated Advisor Independent Reporting
Arcay Moela Sponsors Accountants
(Proprietary) Limited BDO South Africa
Incorporated
Date: 09/11/2010 16:46:01 Produced by the JSE SENS Department.
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