| Thu 18 Jun 2020, 17:34 | | VISUAL INTERNATIONAL HOLDINGS LIMITED - General issue of shares for cash to Verityhurst Proprietary Limited ("Verityhurst” or “the Subscriber”) |
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General issue of shares for cash to Verityhurst Proprietary Limited ("Verityhurst” or “the Subscriber”)
VISUAL INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/030975/06)
(“Visual” or “the Company”)
ISIN Code: ZAE000187407 Share Code: VIS
GENERAL ISSUE OF SHARES FOR CASH TO VERITYHURST PROPRIETARY LIMITED
("Verityhurst” or “the Subscriber”)
1. Introduction
1.1 Shareholders are hereby advised that, subject to certain conditions precedent, the
Company has entered into a share subscription agreement with Verityhurst (“Share
Subscription Agreement”) in terms of which Verityhurst has agreed to subscribe for
133 000 000 ordinary Visual shares (“Subscription Shares”) for cash at a subscription
price of 4 (four) cents per share (“Subscription Price”) for a total consideration of
R5 320 000 (“Subscription Consideration”) with effect from 31 July 2020 (“Subscription
Effective Date”) (“Share Subscription”).
1.2 The Subscriber will pay an amount of R3 000 000 (“Initial Loan”) in cash into either the
trust account of the Company’s attorneys or the bank account of the Company
Secretary (at the election of the Subscriber), which loan will form part of the
Subscription Consideration. The Initial Loan will be payable in two tranches
comprising R1 000 000 on or before 18 June 2020 (already received by the Company
Secretary) (“Tranche 1”) and R2 000 000 on or before 31 July 2020 (“Tranche 2”).
1.3 Upon receipt of written confirmation by the Company’s attorneys or the Company
Secretary, as the case may be, that amounts are being held by them for payment
to the Company, the amounts will be recorded as a loan in the books of the
Company until such time as the JSE has lifted the suspension of trading in the
Company’s shares. Thereafter the Company will, as soon as possible, obtain
approval from the JSE for the allotment and issuance of Subscription Shares to the
Subscriber, limited to the amounts received in cash.
1.4 Within three Business Days after the unsuspension by the JSE of the Company, the
balance of the Subscription Consideration (“Balance”) shall be paid in cash by the
Subscriber into the trust account of the Company’s attorneys or the bank account
of the Company Secretary (at the election of the Subscriber). Upon receipt of written
confirmation by the attorneys or the Company Secretary, as the case may be, that
the Balance is being held by them for payment to the Company, the Board will
approve the allotment and issue of all the Subscription Shares to the Subscriber and
the Company will apply to the JSE for the listing of the Subscription Shares.
1.5 The Share Subscription will be effected in terms of the general authority to issue shares
for cash, which approval was granted by Visual shareholders at the Company's
annual general meeting held on 24 April 2019 and will constitute 26.22% of the
number of equity securities in issue prior to this general issue.
1.6 The Subscriber is an investment holding company with investments in the forestry,
transportation, education, and agriculture sectors, and is seeking investments in
property holding and development businesses, amongst other things. The Subscriber
is not considered to be a related party to Visual in terms of the JSE Listings
Requirements.
1.7 The Subscription Price is at an 8.89% premium to the 30-day volume weighted
average share price of 3.67 cents per share at 30 June 2019, being the last date of
trade prior to the suspension of the Company on the JSE and the reference price
used and agreed to by the Company and the Subscriber.
1.8 The Subscription Shares will rank pari passu with the existing shares in issue and are of
a class already in issue.
1.9 The Share Subscription will have the following impact on the financial statements:
1.9.1 The unwinding of the transaction concluded with Mosegedi and Associates
Proprietary Limited (“Mosegedi”) as detailed in paragraph 2 below, will result
in a R1.04 million reduction in the long-term liabilities of the Company
associated with the cancellation of 106 million shares previously issued to
Mosegedi, noting that in the publication of the published results, the
cancellation of the shares has already been recorded.
1.9.2 Following the cancellation of the Mosegedi Shares and the issue of the
Subscription Shares, the issued share capital of the Company will be
401 265 547 ordinary shares of no par value.
1.9.3 The balance of the Subscription Consideration will result in a reduction in
current liabilities.
1.10 Upon the issuance of the Subscription Shares to the Subscriber, the board of directors
of the Company will nominate 2 (two) non-executive directors for appointment to
the Board of the Company. However, the earlier nomination and appointment of
directors will be considered.
2. Intended use of funds
The Company will use the proceeds of the Share Subscription as follows:
2.1 Initial Loan
- Payment to the Company’s auditors for creditor amounts and an estimate
for the audit costs for the years ended 28 February 2019 and
29 February 2020 amounting to up to R600 000, including VAT, from
Tranche 1 and any remaining balance from Tranche 2;
- Payment to the Company’s designated advisor for creditor amounts and
costs amounting to R250 000 from Tranche 1 and R250 000 from Tranche 2,
plus VAT;
- Payment of R150 000 towards the cost of the preparation of the Annual
Financial Statements and Annual Reports for the years ended 28 February
2019 and 29 February 2020, as directed by the Company, from Tranche 1;
- Payment of R1.04 million (net of any costs to acquire shares) to Mosegedi
in terms of the unwind of the acquisition of 31.2% of Mosegedi (as first
announced on SENS on 16 February 2018) from Tranche 2, on condition
that 106 million shares of the Company (“Mosegedi Shares”) will have
been returned to the Company’s attorneys for cancellation; and
- The remaining balance of the Initial Loan will be applied to fund the
working capital requirements of the Company.
2.2 Balance of the Subscription Consideration
- Payment to the Company’s designated advisor for creditor amounts and
costs amounting to R500 000, plus VAT; and
- The remaining balance of the Subscription Consideration will be applied
to fund the working capital requirements of the Company.
3. Acquisition of Additional Shares
3.1 The Share Subscription Agreement contains a resolutive condition providing for the
Subscriber to enter into an agreement with the RAL Trust (a related party to
Mr CK Robertson) on or before 31 December 2020 for the acquisition of an additional
68 000 000 ordinary Visual shares (“Additional Shares”) from the RAL Trust at an
acquisition price of 8 (eight) cents per share (“Acquisition Agreement”). The intention
behind this resolutive conditions is to enable the Subscriber to acquire control of the
Company without further diluting the minority shareholders.
3.2 In the event that the Subscriber holds more than 35% of the issued share capital of
the Company, the Subscriber will be required to extend a mandatory offer to the
remaining shareholders of the Company in terms of the provision of the Companies
Act, No. 71 of 2008 read with the Companies Regulations, 2011 (“Mandatory Offer”).
In such instance, Mr CK Robertson will procure an irrevocable undertaking to not
accept the Mandatory Offer from each of the RAL Trust and the CKR Investment Trust
in relation to any remaining shares held by these two trusts.
4. Suspensive and Resolutive Conditions
The Share Subscription is subject to the fulfilment or waiver (if applicable) of the
following conditions:
4.1 the listing of the Subscription Shares on the JSE within five business days of the lifting
of the suspension of trading in the Company’s shares; and
4.3 the resolutive condition of the Subscriber entering into the Acquisition Agreement, as
detailed in paragraph 3 above, which will require dispensation from the JSE if the
Company is in a closed period.
The Subscriber and the Company may, by written agreement concluded between them
on or before the date specified for its fulfilment, extend the date specified for the fulfilment
of the suspensive conditions set out in this paragraph 4.
Cape Town
18 June 2020
Designated Advisor
Arbor Capital Sponsors
Date: 18-06-2020 05:34:00
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