| Thu 9 Dec 2010, 13:09 | | ESR - Esorfranki Limited - Further announcement regarding the rights offer and |
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ESR
ESR
ESR - Esorfranki Limited - Further announcement regarding the rights offer and
withdrawal of the cautionary announcement
ESORFRANKI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/000732/06)
JSE code: ESR
ISIN: ZAE000133369
("Esorfranki" or "the company")
FURTHER ANNOUNCEMENT REGARDING THE RIGHTS OFFER AND WITHDRAWAL OF THE CAUTIONARY
ANNOUNCEMENT
1 Introduction and terms of the rights offer
Shareholders are referred to the announcement, dated 25 November 2010 and
are advised that the company has finalised terms in order to raise R200
million by way of a fully underwritten renounceable rights offer of 93 023
256 new ordinary shares ("rights shares") to its ordinary shareholders at a
subscription price of R2.15 per rights share ("rights offer price") in the
ratio of 30.786 rights shares for every 100 Esorfranki shares held ("rights
offer"). The rights offer price represents a 6% premium to the 30 day
volume weighted average price of Esorfranki ordinary shares of R2.03 as at
25 November 2010. The rights shares, once issued, will rank pari passu in
all respects with the existing issued Esorfranki shares.
2 Underwriting agreements
Underwriting agreements have been entered into between the company and
Coronation Asset Management (Pty) Limited, and the company and Sanlam
Investment Management - a division of Sanlam Life Insurance Limited - and
Sanlam Investment Management (Pty) Limited (collectively "the
underwriters"), in terms of which the underwriters have agreed to subscribe
for all of the rights shares at the rights offer price ("the
subscription"), subject to the conditions precedent set out in 3 below.
An aggregate underwriting fee of 1.9% of the rights offer proceeds is
payable to the underwriters.
3 Conditions precedent
The underwriting agreements are subject to the rights offer circular being
posted to shareholders on or about 7 February 2011 and:
- to the extent required, all necessary regulatory approvals having been
obtained from all relevant regulatory authorities; and
- the JSE Limited having granted a listing in respect of the rights
shares.
4 Purpose of the rights offer and use of the proceeds
The main purpose of the rights offer is to raise capital in order to expand
the operations of the company as considered appropriate by the board of
directors and to settle debt of approximately R175 million.
5 Financial effects of the rights offer
The unaudited pro forma financial effects of the rights offer, for which
the directors are responsible, are provided for illustrative purposes only
to show the effect thereof on earnings per share, diluted earnings per
share, headline earnings per share and diluted headline earnings per share
as if the rights offer had taken effect on 1 March 2010 and on net asset
value per share and net tangible asset value per share as if the rights
offer had taken effect on 31 August 2010. Because of their nature, the
unaudited pro forma financial effects may not fairly present the company`s
financial position and performance. The unaudited pro forma financial
effects have been compiled from the published reviewed results for the six
months ended 31 August 2010 and are presented in a manner consistent with
the format and accounting policies adopted by Esorfranki and have been
adjusted as described in the notes below:
Before After the %
the rights change
rights offer
Note offer
Earnings per share (cents) 2 4.2 4.7 11.7
Diluted earnings per share 2 4.2 4.7 11.9
(cents)
Headline earnings per share 2 4.1 4.6 12.6
(cents)
Diluted headline earnings per 2 4.1 4.6 12.8
share (cents)
Net asset value per share 3 258.4 246.3 (4.7)
(cents)
Net tangible asset value per 3 161.1 172.5 7.0
share (cents)
Weighted average number of 293 403 386 426
shares in issue (000)
Fully diluted weighted 295 628 388 651
average number of shares in
issue (000)
Shares in issue at period end 293 651 386 674
(Net Treasury shares)(000)
Notes:
1 The information as reflected in the "Before the rights offer"
column has been extracted from the company`s consolidated reviewed
results for the six months ended 31 August 2010.
2 The effects relating to earnings per share, diluted earnings per
share, headline earnings per share and diluted headline earnings per
share are based on the following assumptions and information:
- the rights offer was effective 1 March 2010;
- R200 million was received pursuant to the subscription for the 93
023 256 rights shares; and
- the rights offer proceeds, net of transaction costs, were utilised
to settle interest-bearing debt, which debt would have attracted
interest at 9.2% per annum pre-tax, resulting in a reduced finance
cost.
3 The effects relating to the net asset value per share and net
tangible asset value per share are based on the following assumptions
and information:
- the rights offer was effective 31 August 2010;
- R200 million was received pursuant to the subscription for the 93
023 256 rights shares;
- expenses relating to the rights offer amount to R6.3 million and
were written off against share premium;
- the rights offer proceeds, net of transaction costs, were utilised
to settle interest-bearing debt of approximately R175 million.
6 Further announcements and circular
Further announcements will be made in due course relating the fulfilment of
the conditions precedent and in respect of the salient dates of the rights
offer.
A circular to shareholders, giving full details of the rights offer, will
be mailed to shareholders in due course.
7 Withdrawal of the cautionary announcement
Pursuant to the content of this announcement, the cautionary announcement
is withdrawn.
Sandton
9 December 2010
Corporate Adviser and Legal adviser
Sponsor Thomson Wilks Inc
Vunani Corporate Finance
Independent reporting
accountants and auditors
KPMG Inc
Date: 09/12/2010 13:09:02 Produced by the JSE SENS Department.
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