| Fri 7 Dec 2001, 0:00 | | Proposed Terms Of The Rights Offer By Prism To Rai |
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PRISM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/018949/06)
Share code PIM ISIN ZAE000022257
("Prism" or "the company")
Proposed terms of the rights offer by Prism to raise up to R90 million
1. INTRODUCTION
Further to the cautionary announcement dated 20 November 2001, Gensec Bank
Limited is authorised to announce that the board of directors of Prism has
resolved to proceed with a renounceable rights offer of 105 882 353 new
Prism ordinary shares of 0,1 cent per share ("new shares") on the basis of
49,8 new shares for every 100 shares held, at an issue price of 85 cents per
share, to raise an amount of up to R90 000 000, before expenses ("the rights
offer").
Prism is experiencing an increase in its working capital requirements as a
result of a strong uptake of its leading technology, particularly in South
East Asia. The proceeds of the rights offer will be used to increase the
capital base of Prism and satisfy the company's cash flow requirements.
2. UNDERWRITING
A consortium of investors ("the consortium") led by The Archway Technology
Venture Capital Fund ("Archway") has agreed to underwrite R55 million of the
amount to be raised pursuant to the rights offer.
The consortium has agreed to advance an aggregate amount of R55 million, by
way of an interest free loan ("the consortium loan"), to Prism by not later
than 12 December 2001. Depending on the amount raised from the rights
offer, the consortium loan will either be repaid with proceeds from the
rights offer or by way of subscription and allotment of new shares, or a
combination thereof, in accordance with certain agreed rankings for
repayment amongst the members of the consortium inter se. Certain of the
management members of Prism ("management") have undertaken to Archway to
procure the renunciation, for no consideration, of sufficient rights in
favour of Archway so as to result in Archway effectively converting its loan
of R20 million to 23 529 412 new shares at 85 cents per share. The
aforesaid rights are in addition to the R10 million (or 11 764 706 rights to
new shares) that management has agreed to follow.
3. BANKING ARRANGEMENTS
In addition to the funds being raised from the rights offer, the company has
extended the terms of existing bank funding of R75 million. As part of such
arrangements, an option will be granted over 21 428 571 new Prism ordinary
shares at a price of 140 cents per share, exercisable over an 18 month
period. Prism has the right to cancel up to 50% of the option in the event
that up to R15 million of the bank funding is repaid from the rights offer.
It is the current intention of Prism to exercise its rights of cancellation,
as aforesaid, by any amounts raised from the rights offer in excess of R65
million. Options over 9 153 313 new Prism ordinary shares previously
granted in respect of existing bank funding arrangements will be cancelled.
Completion of all requirements in respect of the bank funding is currently
in process. In accordance with the Listing Requirements of the JSE
Securities Exchange South Africa ("the JSE"), PricewaterhouseCoopers
Corporate Finance (Proprietary) Limited has been appointed to express a
fairness opinion in respect of the proposed option being granted.
4. PRO-FORMA FINANCIAL EFFECTS
Based on the audited consolidated results and balance sheet of Prism for the
year ended 30 June 2001, the pro-forma effects of the rights offer reflected
below assume that:
- the rights offer was fully subscribed;
- for the purposes of the effects on earnings per share ("EPS"), the net
rights offer proceeds (after implementation costs) had been received on 1
July 2000 and invested at an after-tax rate of interest of 6,3% per annum;
and
- for purposes of the effects on net asset value ("NAV"), the net rights
offer proceeds had been received on 30 June 2001.
Before After Change%
No of issued shares (`000) 212 942 318 824 49.72
Headline EPS (cents) 32.69 23.33 (28.63)
NAV (cents) 136.31 120.12 (11.88)
Tangible NAV (cents) 81.24 83.34 2.58
The financial effects above do not take into account the effect of the
option granted in terms of the Banking arrangements above.
5. CONDITIONS PRECEDENT
The implementation of the rights offer is conditional upon the following
conditions being fulfilled:
- the JSE granting a listing for the renounceable (nil-paid) letters of
allocation ("the LA's") and the 105 882 353 new shares to be issued pursuant
to the rights offer;
- the Registrar of Companies registering the rights offer documentation; and
- a formal banking facilities agreement being concluded between the company
and its bankers.
6. SALIENT DATES AND TIMES
The salient dates pertaining to the rights offer will be announced during
the course of the week ending 14 December 2001.
7. GENERAL
The necessary circular to shareholders, incorporating the LA's and revised
listing particulars, is in the course of preparation and will, subject to
the approval of the JSE, be mailed to Prism shareholders in due course.
8. TRADING STATEMENT
Indications are that the headline EPS of the company for the six months
ending 31 December 2001 will be lower than the headline EPS for the
corresponding period in the previous financial year. The company expects
growth in attributable earnings and pro-forma headline EPS (based on the
assumption set out in paragraph 4 above and after giving effect to the
rights offer) for the financial year ending 30 June 2002.
9. WITHDRAWAL OF CAUTIONARY NOTICE
The cautionary announcement dated 20 November 2001 is hereby withdrawn.
Accordingly shareholders are no longer required to exercise caution when
dealing in their Prism shares.
Johannesburg
7 December 2001
Transaction sponsor and corporate advisor
Gensec Bank Limited
(Registration number 1996/004744/06)
Lead investor
The Archway Technology Venture Capital Fund
(Master's reference number IT1628/01)
Sponsor
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited )
(Registration number 1962/00738/06)
Independent advisor
PricewaterhouseCoopers Corporate Finance
(Proprietary) Limited
(Registration number 1970/003711/07)
Attorneys to Prism
Werksmans Inc.
(Registration number 1990/007215/21)
