Arcay Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1991/003944/06)
Share code: ARC
ISIN code: ZAE000022406
Debenture code: ARCD
ISIN code: ZAE000022398
("Arcay" or "the company")
Notice to Debentureholders
In the circular to Arcay debentureholders dated 02 November 2001, the Arcay
debentureholders were advised of the current impasse between the company and
the trustee. The company is concerned that certain misconceptions may exist
amongst the Arcay debentureholders and, on or about 05 February 2002,
notified the Arcay debentureholders in accordance with the trust deed, that
should the special resolutions as they appear in the circular issued to
Arcay debentureholders and dated 02 November 2001 not be adopted at the
reconvened meeting, which is to be held on 20 February 2002:
1. the trustee will require the Arcay debentureholders to direct the
trustee to enforce the provisions of the trust deed or to give other
directions to the trustee;
2. in terms of the trust deed, the trustee is entitled, before carrying out
such directions, to require that it is furnished with the necessary funds to
enable it to meet the expense of giving effect to the directions;
3. the company will not fund these expenses as it is not obliged to do so
in terms of the trust deed. Appropriate arrangements will therefore have to
be made with the Arcay debentureholders for the funding of such dispute by
the Arcay debentureholders;
4. the company views the dispute to be frivolous as it does not believe
that any prejudice has been suffered by the Arcay debentureholders due to
any of its actions. It therefore intends to seek a cost order against the
trustee, as representative of the debentureholders, should the dispute
proceed to arbitration;
5. should this dispute continue to arbitration, the company shall pay any
interest due on the Arcay debentures into trust, which will be dealt with
appropriately in accordance with the arbitration order;
6. Arcay debentureholders are not obliged to accept the offer contained in
the circular or as amended in the announcement or the notice, and they may
retain their debentures until they are due for redemption.
The company and the company's advisors dispute the trustee's views that its
conduct has resulted in the debentures becoming immediately due and payable
and that it is legally liable to fund the costs of any action by the
debentureholders.
Arcay also disputes that the payment of interest on the debentures into
trust, should the dispute proceed to arbitration, constitutes a breach by
Arcay of the terms of the trust deed. Any dispute which the trustee may have
with Arcay relating to the Arcay debentures, includes the obligation to pay
interest and will be dealt with in such arbitration proceedings. Arcay will
abide by the arbitration order regarding the amount so paid into trust.
By order of the Board
Arcay Client Support (Pty) Ltd
(Reg No 1998/025284/07)
Company Secretary
Parktown
14 February 2002
Sponsor
KPMG Services (Pty) Ltd
Attorneys
Cliff Dekker Fuller Moore
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