| Fri 9 Dec 2011, 16:15 | | FGL - Finbond Group Limited - Proposed Rights Offer and Withdrawal of Cautionary |
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FGL
FGL
FGL - Finbond Group Limited - Proposed Rights Offer and Withdrawal of Cautionary
Finbond Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: FGL
ISIN: ZAE000138095
("Finbond" or "the Company")
PROPOSED RIGHTS OFFER AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION AND TERMS OF THE RIGHTS OFFER
Shareholders are advised that the Board of Directors of Finbond are
proposing a capital raising of approximately R20 million by way of a rights
offer ("the rights offer").
In terms of the rights offer, 200 000 000 new Finbond ordinary shares of
0.0001 cents each, in the authorised but unissued share capital of the
Company ("the rights offer shares"), will be offered for subscription to
Finbond shareholders who will receive rights to subscribe for the rights
offer shares on the basis of 52 rights offer shares for every 100 Finbond
ordinary shares held, at 10 cents per rights offer share. The rights offer
price represents a discount of 16.0% to the 30 trading day volume weighted
average price of Finbond shares up to and including 8 December 2011.
2. RATIONALE FOR THE RIGHTS OFFER
The rationale for the rights offer is to raise funds to meet maturing debt
obligations and to grow Finbond`s Micro Finance debtors` book.
In order to meet maturing debt obligations in December 2011 and January
2012, Finbond`s two largest shareholders Kings Reign Investments
(Proprietary) Limited ("KRI") (39.2% shareholding)and Net 1 Finance
Holdings (Proprietary) Limited ("Net 1") (22,2% shareholding) have agreed
to advance R12 million in new shareholders` loans to Finbond, in addition
to an existing shareholder`s loan of R8 million from KRI, on condition that
Finbond proposes a rights offer to all shareholders at 10 cents per share
and that these shareholders` loans be utilised by KRI and Net 1 in
following their commitments to Finbond in respect of the rights offer, as
detailed below. KRI and Net 1 will follow their rights by converting their
shareholders loans to shares. Instead of subscribing for cash, they will
instruct the Company to debit their loan accounts and credit share capital.
The rights offer allows all shareholders registered as such on the record
date an equal opportunity to participate in the capital raising on a pari
passu basis.
3. IRREVOCABLE UNDERTAKINGS AND UNDERWRITING
KRI and Net 1 have irrevocably committed to follow their rights, through
the conversion of their respective shareholders` loans into shares, in an
approximate amount of R12 million.
KRI and Net 1 have further committed to underwrite in full and in
proportion to their existing shareholdings, the balance of the rights offer
through the capitalisation of the balance of their shareholders` loans of
R8 million. No underwriting fee will be applicable.
4. EXCESS APPLICATIONS
Finbond shareholders will be permitted to apply for new Finbond shares in
excess of their entitlement. Should there be excess rights offer shares
available for allocation, these will be allocated to applicants in a manner
viewed as equitable in terms of the Listing Requirements of the JSE.
5. UNAUDITED PRO FORMA FINANCIAL EFFECTS
5.1 The preparation of the unaudited pro forma financial effects is the
responsibility of the directors of Finbond.
5.2 The table below sets out the unaudited pro forma financial effects of
the rights issue. The unaudited pro forma financial effects are
prepared for illustrative purposes only and may not fairly represent
Finbond`s results, financial position and changes in equity after the
rights issue. For the purposes of the pro forma financial effects, it
has been assumed that the rights issue took place with effect from 1
March 2011 for the statement of comprehensive income and 31 August
2011 for the statement of financial position.
Before the After the %
rights rights Change
issue (1) issue
Published (2)(3) (4)
Pro forma
Basic and diluted loss per (1.2) (0.6) 50.0
share (cents)
Basic and diluted headline (1.3) (0.7) 46.2
loss per share (cents)
Net asset value per share 60.5 43.0 (28.9)
(cents)
Tangible net asset value per 44.4 32.5 (26.8)
share (cents)
Total shares in issue and 382 025 250 582 025 250
weighted average shares
Notes:
1. The "Before the rights issue" financial information is based on
Finbond`s published unaudited interim financial information for the
six months ended 31 August 2011.
2. The "After the rights issue" basic and diluted loss and headline loss
per share numbers have been adjusted to include the issue of the
rights offer shares. Net asset value per share and tangible net asset
value per share have been adjusted to include the issue of 200 000 000
ordinary shares at 10 cents per Finbond share.
3. Transaction costs of R800 000 will be set off against share premium.
4. The rights issue is assumed to result in an after tax interest saving
of R888 082(calculated using an average pre-tax borrowing cost of
13.24% p.a.). This interest saving will have a continuing effect on
Finbond`s results.
6. DOCUMENTATION AND FINALISATION ANNOUNCEMENT
A circular to Finbond shareholders, incorporating listing particulars and
setting out full details of the rights offer, will be posted to
shareholders in due course. Shareholders will also be notified on SENS of
the important dates and times relating to the rights offer.
7. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the information disclosed in this announcement, Finbond
shareholders are advised that caution is no longer required when dealing in
the Company`s securities.
Johannesburg
9 December 2011
Corporate and Designated Advisor
Grindrod Bank Limited
Reporting Accountants and Auditors
KPMG Inc.
Date: 09/12/2011 16:15:01 Produced by the JSE SENS Department.
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