| Thu 9 Dec 2010, 15:15 | | CPI - Capitec Bank Holdings Limited - Declaration announcement and terms of the |
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CPI
CPI
CPI - Capitec Bank Holdings Limited - Declaration announcement and terms of the
underwritten Capitec renounceable rights offer
CAPITEC BANK HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1999/025903/06
Share Code: CPI
ISIN Number: ZAE000035861
("Capitec" or "the company" or "the group")
DECLARATION ANNOUNCEMENT AND TERMS OF THE UNDERWRITTEN CAPITEC RENOUNCEABLE
RIGHTS OFFER
1. INTRODUCTION
Shareholders are referred to the announcement published on the Stock
Exchange News Service ("SENS") on Thursday, 25 November 2010 whereby
Capitec announced its intention to raise approximately R1.05 billion by way
of an underwritten renounceable rights offer of 8 420 462 new Capitec
ordinary shares of R0.01 each ("rights offer shares") to Capitec ordinary
shareholders recorded in the register at the close of business on Friday, 7
January 2011. The subscription price is R125.00 per rights offer share. The
ratio of the rights offer is 1 rights offer share for every 10 Capitec
ordinary shares held.
2. RATIONALE FOR THE RIGHTS OFFER
The net proceeds of the rights offer will be used by the group to optimise
the capital base of the group, expand its infrastructure and branch network
and increase capacity for loan book growth.
The above is not an exhaustive list of Capitec`s planned capital
expenditure. Additional projects will be funded from cash generated from
operations in the normal course of business. In the short term the net
proceeds from the rights offer will be invested in cash and cash
equivalents, which will, in due course, be allocated to future strategic
initiatives.
3. TERMS OF THE RIGHTS OFFER
In terms of the rights offer, 8 420 462 rights offer shares will be offered
for subscription to shareholders on the basis of 1 new rights offer share
for every 10 shares held, for subscription at R125.00 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 opportunity to
participate in the rights offer.
The rights offer price represents a discount of 14.8% to the 30 day volume-
weighted average price of shares on the JSE as at 24 November 2010, being
the last day before the initial rights offer announcement was made to
shareholders 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
to the underwriter.
The rights offer shares issued will rank pari passu with the existing
issued ordinary shares.
4. UNDERWRITING AND IRREVOCABLE COMMITMENT
PSG Financial Services Limited, a wholly owned subsidiary of PSG Group
Limited, and Thembeka Capital Limited, holding in total 38.64% of the
issued ordinary share capital of Capitec have irrevocably committed to take
up their rights offer entitlement for a commitment fee of 4% of their
rights entitlement.
Sanlam Capital Markets Limited ("SCM") has agreed to underwrite the balance
of the rights offer up to a maximum amount of R646 million, represented by
5 166 992 rights offer shares, for an underwriting fee of 4% of the amount
underwritten. In terms of the agreement, SCM has the right, pursuant to and
after the conclusion of the rights offer, to subscribe for ordinary shares
in Capitec to a value of up to R100 million at a price of R132.02 per share
subject to the opinion of an independent expert that the said issue price
is fair to shareholders of Capitec at the date of exercise of the option,
if applicable. Details of the underwriting agreement are set out in the
rights offer circular to be posted to shareholders on Monday, 10 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 Capitec
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 Capitec 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 Capitec 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 the rights offer on Capitec
are set out below. It has been assumed for purposes of the unaudited pro
forma financial effects that the rights offer took place on 1 March 2010
for purposes of the income statement and on 31 August 2010 for purposes of
the balance sheet.
Due to the nature of these pro forma financial effects, they are presented
for illustrative purposes only and may not fairly present Capitec`s
financial position and results after the 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 PricewaterhouseCoopers Inc, whose limited assurance report
is included as Annexure 1 to the rights offer circular to be posted to
Capitec shareholders on Monday, 10 January 2011.
Pro forma financial effects for the six months ended 31 August 2010
Unaudited Unaudited Percentage
financial pro forma change
information financial
before information
rights offer after
rights
offer
Earnings per share ("EPS") 339 334 (1.5%)
(cents)
Diluted EPS (cents) 325 322 (0.9%)
Headline earnings per share 340 335 (1.5%)
("HEPS") (cents)
Diluted HEPS (cents) 327 323 (1.2%)
Net asset value per share 2 117 3 015 42.4%
(cents)
Net tangible asset value per 2 078 2 979 43.4%
share (cents)
Ordinary shares in issue (`000) 84 122 92 542 10.0%
(net of treasury shares)
Weighted average number of 83 586 92 006 10.1%
ordinary shares in issue (`000)
Diluted weighted average number 87 071 95 491 9.7%
of ordinary shares in issue
(`000)
Notes and assumptions:
1. The unaudited financial information has been extracted from the
unaudited interim results of Capitec for the six months ended 31
August 2010.
2. The pro forma adjustments to the income statement and statement of
comprehensive income have been calculated on the assumption that the
proceeds from the rights offer were received on 1 March 2010.
3. The pro forma adjustments to the balance sheet have been calculated on
the assumption that the proceeds were received on 31 August 2010.
4. 8 420 462 rights offer shares are assumed to have been issued at a
subscription price of R125 per rights offer share in the ratio of 1
rights offer share for every 10 Capitec shares held pursuant to the
rights offer thereby raising capital of approximately R1 billion.
5. The net proceeds of the rights offer after deduction of estimated
costs of R43.2 million have been assumed to be invested in cash and
cash equivalents, which is to be allocated to future strategic
initiatives in due course.
6. The underwriting fee of R25.8 million and the estimated directly
attributable transaction costs of R17.4 million, relating to the
rights offer are written off against the share premium account.
Transaction costs include commitment fees of R16.3 million and R1.1
million in costs relating to the fees paid to professional advisers
and attorneys and compliance fees, and are not expected to have a
continuing effect on Capitec.
7. Interest received on proceeds invested in cash and cash equivalents
was calculated at the group`s monthly average marginal return on
excess funding. The monthly average marginal return was calculated as
the actual rates obtained on excess funding invested in cash and cash
equivalents weighted according to the balance invested in each
instrument.
8. An additional tax expense results from the interest received on funds
invested in cash and cash equivalents. A tax rate of 28% was applied.
8. SALIENT DATES AND TIMES
Last day to trade in Capitec shares in order Friday, 31 December 2010
to settle trades by the record date for the
rights offer and to qualify to participate in
the rights offer on
Capitec shares commence trading ex-rights on Monday, 3 January 2011
the JSE at 09:00 on
Listing of and trading in the letters of Monday, 3 January 2011
allocation commences at 09:00 on
Record date for purposes of determining the Friday, 7 January 2011
Capitec shareholders entitled to participate
in the rights offer at the close of business
on
Circular and, where applicable, form of Monday, 10 January 2011
instruction posted to shareholders on
Rights offer opens at 09:00 on Monday, 10 January 2011
Holders of dematerialised Capitec shares will Monday, 10 January 2011
have their accounts at their CSDP or broker
automatically credited with their letters of
allocation on
Holders of certificated Capitec shares will Monday, 10 January 2011
have their letters of allocation credited to
an electronic register at the transfer
secretaries on
Last day to trade ("LDT") in letters of Friday, 21 January 2011
allocation in order to settle trades by the
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, 21 January 2011
with the transfer secretaries by holders of
certificated Capitec shares wishing to sell
all or part of their entitlement by 12:00 on
Listing and trading of rights offer shares Monday, 24 January 2011
commences on the JSE at 09:00 on
Record date for letters of allocation on Friday, 28 January 2011
Rights offer closes at 12:00 and payment to Friday, 28 January 2011
be made and form of instruction lodged by
holders of certificated Capitec shares with
the transfer secretaries by that time on (see
note 2)
CSDP/broker accounts credited with rights Monday, 31 January 2011
offer shares and debited with any payments
due in respect of holders of dematerialised
rights offer shares on
Rights offer share certificates in terms of Monday, 31 January 2011
the rights offer posted to holders of
certificated rights offer shares on or about
Results of rights offer announced on SENS on Monday, 31 January 2011
Results of rights offer published in the Tuesday, 1 February 2011
press on
Notes:
1. All times referred to in the announcement are local times in South
Africa.
2. Holders of dematerialised Capitec 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 Capitec shareholder and his
CSDP or broker.
3. Capitec share certificates may not be dematerialised or rematerialised
between Monday, 3 January 2011 and Friday, 7 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 shareholders recorded in the register
on the record date on Monday, 10 January 2011.
10. FINALISATION ANNOUNCEMENT
It is anticipated that the finalisation announcement for the rights offer
will be released on SENS on or about Friday, 17 December 2010 and published
in the press on Monday, 20 December 2010.
9 December 2010
Corporate adviser and Sponsor
PSG Capital
Reporting accountants
PricewaterhouseCoopers Inc
Lead independent sponsor
Questco
Underwriter
Sanlam Capital Markets Limited
Date: 09/12/2010 15:15:01 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.
