| Fri 10 Dec 2010, 16:36 | | JDH - John Daniel Holdings Limited - Final terms of main revolving loan |
|
JDH
JDH
JDH - John Daniel Holdings Limited - Final terms of main revolving loan
agreement, pro forma financial effects and withdrawal of cautionary
announcement
JOHN DANIEL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: JDH - ISIN: ZAE000136677
("the Company" or "JDH" or "the Group")
FINAL TERMS OF MAIN REVOLVING LOAN AGREEMENT, PRO FORMA FINANCIAL EFFECTS
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the detailed cautionary announcement released on SENS on 23
September 2010, shareholders are advised that the Company has entered into
a revolving term loan agreement("the Term Loan") with Escalator Capital
Limited ("Escalator"), which follows the signing of and the replacement of
the first loan agreement for R1 million as previously announced. Escalator
is not a related party to JDH.
The term loan comprises a main agreement that puts in place the Term Loan
and the main terms applicable to all future loans advanced to the Company.
The new executive board members ("the new board"), appointed on 22
September 2010, entered into the main agreement negotiations with Escalator
shortly after being appointed. The protracted negotiations led to the
conclusion of improved terms for the Company. The agreement was signed on
09 December 2010.
Improved terms for the first loan of R1 million referred to in the SENS
announcement of 21 September 2010 with subsequent advances totaling R1.3
million based on the original terms, were negotiated. The advances
totaling R2.3 million subject to the original terms having been replaced by
a new loan of R3 million signed in conjunction with the main agreement on
09 December 2010.
The main revolving loan agreement terms will replace the terms of the first
loan agreement.
Additional future loan applications will be based on the terms as stated in
the main revolving loan agreement and are subject to approval by Escalator.
The quantum of future loans in terms of the Escalator facility is subject
to the availability of the required security.
The principal terms of the main agreement that apply to all loans ("Loan
Terms") are as follows:
- The loan term is for four years from the effective loan date, set as the
date the funds were made available to the Company;
- JDH agreed to provide 200% unencumbered security to Escalator on all
loans;
- JDH agreed to payment of upfront fees of 1.5% on each capital loan
amount and monthly fees of 0.1667% on all accumulated capital loans
advanced to the corporate advisor, Selex Finance and Technology
(Proprietary) Limited and the placement agent, Lekgotla Financial
Services (Proprietary) Limited`s, upfront placement fee of 10% on each
capital loan amount advanced;
- JDH pledges unto and in favour of Escalator 13 456 418 issued shares in
Lazaron Biotechnologies (SA) Limited and 72 147 358 issued shares of
Vinguard Limited;
- A fixed daily interest rate of 0.0494% per day, compounded daily,
calculated over the loan period and repayable on the loan repayment
date;
- The repayment date is the last day of the term loan period, thus at the
end of the four years;
- Escalator holds a call option, calculated from 01 May 2011, to convert
all or a portion of the capital and interest at the lower of a fixed
price of 6 cents per share or the 10 day VWAP price less 15% prior to
the repayment date, subject to approval of 51% of JDH shareholders;
- Escalator can convert at the abovementioned prices during the period
starting from 1 May 2011 up to a maximum date 18 months after signing
the main agreement;
- Once the 18 month period lapses Escalator can convert at the 10 day VWAP
price less 10% up to the repayment date and the conversion in terms of
the call option is subject to 51% shareholder approval.
PRO FORMA FINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects on the
net asset value, net tangible asset value per share, earnings and headline
earnings per share. These pro forma figures are presented for illustrative
purposes only and because of their nature may not give a fair reflection of
the Company`s financial position, results of operations, changes in equity
and cash flow after the conversion. The unaudited pro forma information is
the responsibility of the directors of the Company.
It has been assumed for purposes of the unaudited pro forma information
presented below that the transaction was effective on 30 June 2010 for
balance sheet purposes and from 01 July 2009 for income statement purposes.
Before Intro- Conversion After %
Audited duction of "A" and change
of Escalator "B"
Escalator loan
loan "B"
"A"
Net asset value 0.78 (0.17) 1.24 1.85 137%
per share
(cents)
Net tangible 0.16 (0.17) 1.39 1.38 763%
asset value per
share (cents)
Earnings per (8.13) (0.44) 3.09 (5.48) 33%
share (cents)
Headline (6.74) (0.44) 2.56 (4.62) 31%
earnings per
share (cents)
Number of shares 150 500 - 50 000 200 500 33%
in issue (`000)
Weighted number 81 704 - 50 000 131 704 61%
of shares in
issue (`000)
Assumptions
1. The "Before" column is extracted from the Company`s audited, published
results for the year ended 30 June 2010.
2. The unaudited pro forma information assumes that Escalator loan
funding of R3 million will be utilised.
3. The "After "A"" column assumes that the R3 million loan was received
at the beginning of the period for income statement purposes and that the
interest and related expenses was incurred for the full year. For balance
sheet purposes it is assumed the loan was received in cash as at 30 June
2010 and that expenses impacting the balance sheet are limited to the
upfront fees referred to in the Loan Terms;
4. The "B"" column assumes that the interest incurred was reversed as the
conversion occurred at the beginning of the period for income statement
purposes.
5. The "After "A" and "B"" column shows the pro forma effects of the
introduction of a R3 million loan as well as the conversion of the loan,
which has been assumed at a conversion price of 6 cents per share resulting
in the issue of 50 000 000 new JDH shares.
6. Transaction costs of R300 000 have been assumed.
7. Notional taxation of 28% has been assumed.
DOCUMENTATION
The conversion terms of the main revolving loan agreement will require
shareholder approval and therefore a circular to shareholders is in the
process of being prepared.
WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the previous cautionary announcement released
on 15 September 2010, and are advised that this cautionary has now been
withdrawn.
For and on behalf of the Board
TP Gregory
Pretoria
10 December 2010
Directors: TP Gregory, DP van der Merwe, LF Rehrl, B Topham#.
(# Non-executive)
Company Secretary: Brandon Topham Incorporated
Registered Office: 4SS Building 9, Tijger Valley, Silver Lakes Road,
Pretoria 0081
Transfer Secretaries: Computershare Investor Services (Pty) Limited, 70
Marshall Street, Marshalltown 2001, PO Box 61051, Marshalltown 2107
Auditors: AM Smith and Company Inc
Sponsor: Arcay Moela Sponsor (Pty) Limited
Date: 10/12/2010 16:36:01 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.
