| Fri 26 Nov 2010, 14:18 | | BFS - Blue/ Mayibuye - Further update regarding the status of the remaining |
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BFS
BFS
BFS - Blue/ Mayibuye - Further update regarding the status of the remaining
conditions precedent in connection with the recapitalisation of Blue by
Mayibuye and a cautionary announcement
Blue Financial Services Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1996/006595/06)
JSE Share code: BFS
ISIN: ZAE000083655
("Blue" or the "Company")
Mayibuye Group (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1998/022424/07)
("Mayibuye")
FURTHER UPDATE REGARDING THE STATUS OF THE REMAINING CONDITIONS PRECEDENT IN
CONNECTION WITH THE RECAPITALISATION OF BLUE BY MAYIBUYE AND A CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the update announcement released on the
Securities Exchange News Service ("SENS") of the JSE Limited ("JSE") on
18 November 2010 ("18 November Update Announcement") in connection with
the proposed recapitalisation of the Company by Mayibuye
("Recapitalisation Transaction") wherein shareholders were advised of
the fulfilment of certain key conditions precedent which included
Renaissance Africa Master Fund Limited ("RenAsset"), being one of the
Company`s existing lenders, having entered into a convertible loan
agreement with the Company ("RenAsset Agreement") in terms of which
RenAsset will have the right, subject to the fulfilment of certain
suspensive conditions (including obtaining to the extent required, the
necessary regulatory and shareholder approvals), to convert all or a
portion of the outstanding debt owed to it by the Company into shares in
the Company from time to time.
2. FULLFILLMENT OF ZAMBIAN COMPETITION APPROVAL
Shareholders are hereby advised that the Company has obtained final
approval from the Board of Commissioners of the Zambian Competition
Authority to implement the Recapitalisation Transaction.
3. REMAINING KEY CONDITION
Shareholders were advised in the 18 November Update Announcement, that
all parties to the debt rescheduling agreement ("DRA"), entered into
between certain of the Company`s existing lenders ("Existing Lenders"),
the Company, certain of its subsidiaries and Mayibuye, as detailed in
the circular to Blue shareholders dated 7 October 2010 ("Circular"),
need to approve the terms of the RenAsset Agreement, and enter into an
addendum to the DRA to that effect.
Shareholders are advised that as a result of the delay in concluding all
the relevant agreements required to implement the Recapitalisation
Transaction, the date in the DRA by which the Recapitalisation
Transaction needed to be implemented, was extended from 15 October 2010
to 29 November 2010. However, in light of the requirement for the
Existing Lenders to approve the terms of the RenAsset Agreement, it is
very likely that the last date on which the Recapitalisation Transaction
may be implemented, being 29 November 2010, will be extended.
4. PROPOSED EARLY CONVERSION OF DEBT FUNDING
Shareholders are referred to paragraph 4.9 of the Circular wherein it
was advised that notwithstanding the conclusion of the DRA, certain of
the Existing Lenders had indicated to Blue and Mayibuye their desire to
convert a portion of the amounts owed to them into ordinary shares in
the Company.
During the process of obtaining the approval of the Existing Lenders of
the terms of the RenAsset Agreement, to be implemented by all parties
entering into an addendum to the DRA (as detailed in paragraph 3 above),
certain of the Existing Lenders, engaged Mayibuye and Blue with a view
to reaching agreement on the basis on which the Existing Lenders can
convert a portion of the amounts owed to them into ordinary shares in
the Company ("Proposed Early Conversion"). Such Proposed Early
Conversion will be subject to the fulfilment of certain suspensive
conditions (including obtaining to the extent required, the necessary
regulatory and shareholder approvals).
5. CAUTIONARY ANNOUNCEMENT
In light of the discussions with the Existing Lenders regarding the
conclusion of the addendum to the DRA, as detailed in paragraph 3 above,
and regarding the negotiation of the terms of the Proposed Early
Conversion, as detailed in paragraph 4 above, shareholders are advised
to exercise caution when dealing in their Blue ordinary shares until a
further announcement is made.
6. UPDATE ANNOUNCEMENT TO SHAREHOLDERS
A further announcement to Blue shareholders will be made in due course
on SENS, advising shareholders of the fulfilment or waiver (as the case
may be) of the remaining conditions to the Recapitalisation Transaction
and any developments regarding the Proposed Early Conversion.
Pretoria
26 November 2010
Financial adviser to Blue
NM Rothschild & Sons (South Africa) (Proprietary) Limited
Designated adviser to Blue
Grindrod Bank Limited
Financial adviser to Mayibuye
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited
Legal adviser to Mayibuye
Cliffe Dekker Hofmeyr Inc
Date: 26/11/2010 14:18:01 Produced by the JSE SENS Department.
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