| Thu 9 Dec 2010, 11:25 | | DGC - Digicore Holdings Limited - Declaration announcement and terms of |
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DGC
DGC
DGC - Digicore Holdings Limited - Declaration announcement and terms of
the fully underwritten Digicore renounceable rights offer
DIGICORE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/012601/06)
Share Code: DGC
ISIN Number: ZAE000016945
("DigiCore" or "the Company" or "the Group")
DECLARATION ANNOUNCEMENT AND TERMS OF THE FULLY UNDERWRITTEN DIGICORE
RENOUNCEABLE RIGHTS OFFER
1 INTRODUCTION
Shareholders are referred to the announcement published on SENS on
Tuesday, 16 November 2010 whereby DigiCore announced its intention to
raise R90 million by way of a fully underwritten renounceable rights
offer of 30 000 000 new DigiCore ordinary shares of R0.001 each
("rights offer shares") to qualifying DigiCore ordinary shareholders
recorded in the register at the close of business on Friday, 28
January 2011, at a subscription price of 300 cents per rights offer
share, in the ratio of 13.78237 rights offer share for every 100
DigiCore ordinary shares held.
2 RATIONALE FOR THE RIGHTS OFFER
DigiCore requires a fresh injection of capital in order to support
its strategic initiatives in a cost-effective manner by means of a
rights offer.
Net proceeds from the rights offer will be used by the Group to:
- fund the Minorplanet transaction, as announced on SENS on 9 June
2010, that have been funded to date from working capital, cash
reserves and overdraft facilities;
- fund further potential future acquisitions locally and offshore;
and
- fund the lease book assets within the Group.
The above is not an exhaustive list of DigiCore`s planned capital
expenditure. Additional projects will be funded from cash generated
from operations during the normal course of business.
3 TERMS OF THE RIGHTS OFFER
In terms of the rights offer, 30 000 000 rights offer shares will be
offered for subscription to shareholders on the basis of 13.78237 new
rights offer share for every 100 shares held, for subscription at 300
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 12.1% to the 30 day
volume-weighted average price of shares on the JSE as at 15 November
2010, being the last day before the initial rights offer announcement
was made on SENS.
Excess applications for rights offer shares will not be allowed and
any rights offer shares that are not accepted, renounced or sold
shall revert back to the underwriter.
The rights offer shares issued will rank pari passu with the existing
issued shares.
4 UNDERWRITING
Coronation Asset Management (Pty) Limited ("Coronation" or "the
underwriter") has agreed to fully underwrite the rights offer for an
underwriting fee equal to 3% of the underwritten amount, however the
Company shall pay the underwriter an underwriters fee of only 1% in
respect of following its rights and entitlement to the portion of the
rights issue the underwriter becomes entitled to receive by virtue of
its existing shareholding in the Company prior to the rights offer.
The underwriting agreement is subject to certain conditions, which
are 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, 31 January 2011 ("the
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.
6 FOREIGN SHAREHOLDERS
Any shareholder resident outside the common monetary area holding
DigiCore shares should obtain advice as to whether any governmental
and/or any other legal consent is required and/or any other formality
must be observed to enable such a subscription to be made in terms of
the rights offer circular and form of instruction.
The rights offer does not constitute an offer in any jurisdiction in
which it is illegal to make such an offer. The rights offer shares
have not been and will not be registered under the Securities Act of
the United States of America. Accordingly, the rights offer shares
may not be offered, sold, resold, delivered or transferred, directly
or indirectly, in or into the United States or to, or for the account
or benefit of, United States persons, except pursuant to exemptions
from the Securities Act. The circular and the accompanying documents
are not being, and must not be, mailed or otherwise distributed or
sent in, into or from the United States. The circular does not
constitute an offer of any securities for sale in the United States
or to United States persons.
The rights offer does not constitute an offer in the District of
Colombia, the United States, the Dominion of Canada, the Commonwealth
of Australia, Japan or in any other jurisdiction in which, or to any
person to whom, it would not be lawful to make such an offer. Non-
qualifying shareholders should consult their professional advisers to
determine whether any governmental or other consents are required or
other formalities need to be observed to allow them to take up the
rights offer, or trade their entitlement. Shareholders holding
DigiCore shares on behalf of persons who are non-qualifying
shareholders are responsible for ensuring that taking up the rights
offer, or trading in their entitlements under that offer, do not
breach regulations in the relevant overseas jurisdictions.
To the extent that non-qualifying shareholders are not entitled to
participate in the rights offer as a result of any restrictions, the
allocated rights in respect of such non-qualifying shareholders will
revert to DigiCore who shall be entitled to sell or place same or
failing which such rights will lapse.
7 FINANCIAL EFFECTS OF THE RIGHTS OFFER
The unaudited pro forma financial effects of DigiCore 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.
Due to the nature of these pro forma financial effects, they are
presented for illustrative purposes only and may not fairly present
DigiCore`s financial position after DigiCore`s rights offer.
The unaudited pro forma financial effects have been prepared in terms
of the JSE`s Listings Requirements and the Guide on Pro Forma
Financial Information issued by the South African Institute of
Chartered Accountants. These unaudited pro forma financial effects
are the responsibility of the Board. The material assumptions are set
out in the notes following the table.
The unaudited pro forma financial effects set out below were reported
on by PKF (Pta) Inc, whose limited assurance report will be included
as Annexure 1 to DigiCore`s rights offer circular to be posted to
DigiCore shareholders on Monday, 31 January 2011.
Pro forma financial effects for the year ended 30 June 2010
Audited Unaudited Percentage
financial pro forma change
information financial
before rights information
offer after rights
offer
EPS (cents) 22.02 20.94 (4.9%)
HEPS (cents) 21.19 20.21 (4.6%)
NAV per share (cents) 222.99 230.98 3.6%
NTAV per share (cents) 127.03 146.64 15.4%
Ordinary shares in issue (`000) 217 669 247 669 13.8%
(net of treasury shares)
Weighted average number of 210 018 240 018 14.3%
ordinary shares in issue (`000)
Notes and assumption:
1 The "Before the rights offer" figures are extracted from the
published audited financial statements of DigiCore for the year ended
30 June 2010.
2 The Net asset value ("NAV") per share and net tangible asset value
("NTAV") per share figures are calculated based on the actual number
of shares in issue at 30 June 2010.
3 The earnings per share ("EPS") and headline earnings per share
("HEPS") figures are calculated based on the weighted average number
of shares in issue at 30 June 2010.
4 30 000 000 rights offer shares are assumed to have been issued at a
subscription price of 300 cents per rights offer share in the ratio
of 13.78237 rights offer share for every 100 DigiCore shares held
pursuant to the rights offer thereby raising capital of R90 million.
5 The net proceeds of the rights offer after deduction of estimated
costs of R3.3 million have been assumed to have been utilised for the
repayment of the short term bank overdraft and the remainder invested
in cash and cash equivalents.
6 Interest received on proceeds invested in cash and cash equivalents
were calculated at the Group`s month average marginal interest rate
in an investment account.
7 The underwriting fee of R2.5 million and the estimated directly
attributable transaction costs of R854 000, relating to the rights
offer are capitalised against the share premium account. Transaction
costs relate to the fees paid to professional advisers and attorneys
and compliance fees, and are not expected to have a continuing effect
on DigiCore.
8 The reduction in interest paid for the year is based on the
assumption that proceeds from the rights offer were first utilised
for the repayment of bank overdrafts.
9 The "After the rights offer" column is based on the assumption that
the rights offer was implemented on 30 June 2010 for balance sheet
purposes, and implemented on 1 July 2009 for income statement and
statement of comprehensive income purposes.
8 SALIENT DATES AND TIMES
Last day to trade in DigiCore shares in order Friday, 21 January
to settle trades by the record date for the 2011
rights offer and to qualify to participate in
the rights offer (cum entitlement) on
DigiCore shares commence trading ex-rights on Monday, 24 January
the JSE at 09:00 on 2011
Listing of and trading in the letters of Monday, 24 January
allocation commences at 09:00 on 2011
Record date for purposes of determining the Friday, 28 January
DigiCore shareholders entitled to participate 2011
in the rights offer at the close of business
on
Circular and, where applicable, form of Monday, 31 January
instruction posted to shareholders on 2011
Rights offer opens at 09:00 on Monday, 31 January
2011
Holders of dematerialised DigiCore shares will Monday, 31 January
have their accounts at their CSDP or broker 2011
automatically credited with their letters of
allocation on
Holders of certificated DigiCore shares will Monday, 31 January
have their letters of allocation credited to 2011
an electronic register at the transfer
secretaries on
Last day to trade ("LDT") in letters of Friday, 11 February
allocation in order to settle trades by the 2011
record date for the rights offer and
participate in the rights offer at the close
of business on
Last day for form of instruction to be lodged Friday, 11 February
with the transfer secretaries by holders of 2011
certificated DigiCore shares wishing to sell
all or part of their entitlement by 12:00 on
Listing and trading of rights offer shares Monday, 14 February
commences on the JSE at 09:00 on 2011
Record date for letters of allocation on Friday, 18 February
2011
Rights offer closes at 12:00 and payment to be Friday, 18 February
made and form of instruction lodged by holders 2011
of certificated DigiCore shares with the
transfer secretaries by that time on (see note
2)
CSDP/broker accounts credited with rights Monday, 21 February
offer shares and debited with any payments due 2011
in respect of holders of dematerialised rights
offer shares on
Rights offer share certificates in terms of Monday, 21 February
the rights offer posted to holders of 2011
certificated rights offer shares on or about
Results of rights offer announced on SENS on Monday, 21 February
2011
Results of rights offer published in the press Tuesday, 22 February
on 2011
Notes:
1 All times referred to in the announcement are local times in South
Africa.
2 Holders of dematerialised DigiCore shares are required to notify
their CSDP or broker of the action they wish to take in respect of
the rights offer in the manner and by the time stipulated in the
agreement governing the relationship between the DigiCore shareholder
and his CSDP or broker.
3 DigiCore share certificates may not be dematerialised or
rematerialised between Monday, 24 January 2011 and Friday, 28 January
2011, both days inclusive.
4 CSDPs effect payment in respect of holders of dematerialised rights
offer shares on a delivery versus payment method.
5 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.
6 The dates above are subject to change. Any changes will be released
on SENS and in the press.
9 POSTING OF THE RIGHTS OFFER CIRCULAR
Shareholders are advised that a Circular containing full detail of
the terms of the rights offer and a form of instruction in respect of
a letter of allocation will be mailed to all DigiCore shareholders
recorded in the register on the record date on Monday, 31 January
2011.
10 FINALISATION ANNOUNCEMENT
It is anticipated that the finalisation announcement for the rights
offer will be released on SENS on Friday, 14 January 2011 and
published in the South African press on Monday, 17 January 2011.
9 December 2010
Corporate adviser and Sponsor
PSG Capital
Independent reporting accountants
PKF (Pta) Inc
Underwriter
Coronation Asset Management (Pty) Ltd
Legal adviser
Edelstein-Bosman Inc
Date: 09/12/2010 11:25:01 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.
