| Fri 22 Nov 2002, 17:06 | | Excellerate Holdings Limited - Announcement Regard |
|
Excellerate Holdings Limited - Announcement Regarding The Raising Of R26 Million
By Way Of A Renounceable Claw-Back Rights Offer Of Unsecured, Compulsorily
Convertible Debentures ("The Claw-Back Offer")
EXCELLERATE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Share code: EXL ISIN: ZAE000026092
(Registration number 1997/009884/06)
("Excellerate")
ANNOUNCEMENT REGARDING THE RAISING OF R26 MILLION BY WAY OF A RENOUNCEABLE CLAW-
BACK RIGHTS OFFER OF UNSECURED, COMPULSORILY CONVERTIBLE DEBENTURES ("THE CLAW-
BACK OFFER")
1. INTRODUCTION
Nedcor Investment Bank Limited is authorised to announce that Excellerate
has entered into an agreement with BoE Corporate (a division of BoE Bank
Limited) and The Rooibos Trust (collectively, "the underwriters") in terms of
which the underwriters have agreed to underwrite on a joint and several basis
the claw-back offer to Excellerate shareholders of unsecured, compulsorily
convertible debentures ("convertible debentures"), subject to the necessary
approvals referred to in paragraph 10 below.
2. RATIONALE AND PROSPECTS
The funds raised in terms of the claw-back offer will enable Excellerate
to:
2.1 eliminate its short-term debt; and
2.2 pursue its strategy of investing in businesses that reflect its core
competencies in outsourced services, trading and distribution, with the emphasis
on customer-centricity and specialised markets.
The additional capital to be raised by the claw-back offer will facilitate
the acquisition by Excellerate of Ferrengi Household Products cc ("Ferrengi")
for R9,3 million. Ferrengi is a manufacturer and distributor of kitchen sponges,
textiles, and brass and steel scourers and wools to mass merchant retailers and
independents. The Ferrengi business is synergistic with and complementary to
Goldenmarc, the latter as a result of the fact that their customer bases differ
and that the manufacturing capability will add another dimension to Goldenmarc`s
trading capabilities. In due course, Excellerate will merge the two businesses,
combining the proven sales force of Goldenmarc with the established
manufacturing basis of Ferrengi. The financial effects of the acquisition of
Ferrengi, without merging the two businesses, are immaterial. Excellerate
expects the merged entity to contribute significantly to ExcellTrade given the
rationalisation benefits of the merger.
Excellerate is currently evaluating a number of further acquisitions that
meet its investment criteria.
The current market environment makes it difficult for small cap companies
to gain their rightful recognition. The fact that Excellerate has raised R26
million under current market circumstances is a positive reflection on the
future of Excellerate and a fillip for management who have strived hard to get
it to this position. Further, Excellerate is proud that it has received
recognition from an enthusiastic institutional shareholder in the form of BoE
Corporate and believes that this will generate further interest in the company
by other institutional investors.
3. TERMS OF THE CLAW-BACK OFFER
Excellerate shareholders recorded in the register on Friday, 27 December
2002 will be entitled to participate in the claw-back offer. In terms of the
claw-back offer, Excellerate will issue 47 272 727 convertible debentures at an
issue price of 55 cents each (being the nominal value of the convertible
debentures), thereby raising R26 million before expenses, in the ratio of
25,58572 convertible debentures for every 100 Excellerate ordinary shares
("shares") held.
Subject to paragraph 10 below, the salient dates of the claw-back offer are
as follows:
2002
Last date to lodge proxies by 10:00 Monday, 9 December
General meeting to be held at 10:00 (refer to
paragraph 8 below) Tuesday, 10 December
R26 million paid to Excellerate by the underwriters Tuesday, 10 December
Finalisation data announcement to be published on
the Securities Exchange News Service ("SENS") and in the
press on the following day Tuesday, 10 December
Last date to trade in shares on the JSE Securities
Exchange SA ("JSE") so as to be recorded as a
shareholder in order to be entitled to participate in
the claw-back offer Wednesday, 18 December
Shares trade ex claw-back offer entitlement
on the JSE Thursday, 19
December
Listing and trading on the JSE of letters of
allocation ("forms of instruction") from the
commencement of trade (1) Thursday, 19 December
Record date in order to be entitled as a shareholder
to participate in the claw-back offer Friday, 27 December
Claw-back offer opens at 09:00 and the circular
including forms of instruction, where applicable,
to be mailed to shareholders Monday, 30 December
2003
Last date to trade in forms of instruction on the JSE Friday, 10 January
Listing and trading on the JSE of convertible
debentures from the commencement of trading Monday, 13 January
Claw-back offer closes and payment accompanying
forms of instruction to be received by Computershare
Investor Services Limited, 70 Marshall Street
Johannesburg (PO Box 61051, Marshalltown 2107)
(refer note 2 below) by no later than 14:30 on Friday, 17 January
Record date for letters of allocation on Friday, 17 January
Announcement giving results of the claw-back
offer released on SENS and in the press
on the following day Monday, 20 January
Expected date from which convertible debenture
certificates are mailed in respect of certificated
shareholders or credited directly to the relevant
CSDP or broker in respect of dematerialised
shareholders Monday, 20 January
Notes:
1. All forms of instruction will be issued in dematerialised form.
2. Dematerialised shareholders are required to notify their duly appointed
CSDP or broker of their acceptance of the offer in the manner and time
stipulated in the agreement governing the relationship between the shareholder
and his/her CSDP or broker.
3. No shares may be dematerialised or rematerialised from the start of
trade on Thursday, 19 December 2002 to the end of trade on Friday, 27 December
2002.
4. As the JSE has yet to approve the claw-back offer circular referred to
in paragraph 9, these dates are subject to amendment - any change thereto will
be advised by notification on SENS and in the press.
5. CSDP`s effect payment in respect of dematerialised shareholders on a
delivery versus payment method.
4. TERMS OF THE CONVERTIBLE DEBENTURES
The underwriters will be paid interest on the R26 million paid by them to
Excellerate at a rate of prime less 1 percentage point, from Tuesday, 10
December 2002 to Monday, 20 January 2003, both days inclusive.
The convertible debentures will pay a bi-annual (in arrears) coupon
equivalent to the six month Johannesburg InterBank Agreed Rate ("JIBAR") as
quoted by Nedcor Bank Limited from time to time, plus 2,75 percentage points.
Simple interest calculated on the number of days in the relevant period on
the nominal value of the convertible debentures will accrue and be payable bi-
annually on 20 January for the period from 20 July to 19 January and 20 July for
the period from 20 January to 19 July respectively in each year to convertible
debenture holders registered on the last record dates respectively (determined
by reference to the respective payment dates) and payable in accordance with the
Listings Requirements of the JSE from time to time. If any of the aforementioned
payment dates falls on a Saturday, Sunday or public holiday, then the interest
will accrue and be payable on the next business day thereafter.
The convertible debentures are compulsorily convertible into shares on the
7th business day following the 4th anniversary of their date of issue ("the
conversion date") by the repayment of the nominal value of the convertible
debentures to Nedcor Bank Limited on behalf of the convertible debenture holders
and the simultaneous application of such monies in the subscription of new
shares in the issued share capital of Excellerate in accordance with the
conversion ratio as set out below ("the conversion").
On the conversion date, Excellerate shall procure the issue as fully paid
to the holders of the convertible debentures, of 1 share for each convertible
debenture so held; provided that if the 30 days volume weighted average price of
shares on the conversion date is less than 55 cents, the company shall procure
the issue of shares as fully paid to the holders of the convertible debentures
in accordance with the following formula:
A = B/C
Where
A = the number of shares to be issued for each convertible debenture held;
B = 55 cents per share;
C = the 30 days volume weighted average price subject to a minimum of 48
cents per share
as may be amended in terms of certain provisions, which will be contained
in the claw-back offer circular to be issued to shareholders referred to in
paragraph 9 below.
Shareholders must seek their own advice regarding the taxation implications
of the claw-back offer, including the impact of Capital Gains Tax thereon.
5. FINANCIAL EFFECTS OF THE CLAW-BACK OFFER
The table below sets out the financial effects of the claw-back offer,
before expenses, on the earnings, headline earnings and fully diluted earnings
and headline earnings per share for the twelve months to 30 June 2002, as well
as the net asset value and tangible net asset value per share attributable to
shareholders as at 30 June 2002, based on the assumptions noted below:
Before Pro forma after
claw-back offer claw-back offer Percentage
(cents)(1) (cents)(2) change
Earnings per share 4,5 4,0 (11)
Headline earnings per share 6,3 5,8 (7)
Fully diluted headline earnings
per share (3) 6,0 5,7 (5)
Net asset value ("NAV") per
share 58,0 72,4 25
Fully diluted NAV per share 52,6 53,1 1
Net tangible asset value ("NTAV")
per share 22,2 36,5 64
Fully diluted NTAV per share 20,1 26,8 33
Number of shares
in issue (`000) 184 762 232 035 26
Notes:
1. The earnings, headline earnings and net asset value and tangible net
asset value per share in the Before column are as per Excellerate`s published
audited results for the year ended 30 June 2002.
2. The earnings, headline earnings and NAV and NTAV per share in the
After column take into account the effect of the claw-back offer, on the
assumption that the claw-back offer was effective from 1 July 2001 and the funds
raised were invested at an average after tax interest rate of 8,2%.
3. The fully diluted headline earnings, NAV and NTAV per share in the
After column illustrate the effect of the conversion of the convertible
debentures on the assumption that the convertible debentures are converted with
effect from 1 July 2001 in the ratio of 1 share for each convertible debenture
held at an issue price of 55 cents per convertible debenture.
6. CREATION OF THE CONVERTIBLE DEBENTURES
Excellerate shareholders will be asked to approve the creation of the
convertible debentures ("the creation") at the general meeting referred to in
paragraph 8 below.
7. WAIVER OF AN OFFER
Lexshell 380 Investment Holdings (Pty) Ltd, The Israel South Africa
Foundation, Pegfin Investments (Pty) Ltd, Pharaoh Limited (a company
incorporated in the British Virgin Islands) and Buffet Investments (Pty) Ltd
(collectively, "the designated shareholders") have undertaken to make over their
rights to subscribe for the convertible debentures in terms of the claw-back
offer to The Rooibos Trust.
The Rooibos Trust or one of its associates may fund XPL Investments (Pty)
Ltd, Dream Vision Investments 8 (Pty) Ltd, Glendall Trading 21 (Pty) Ltd,
Glendall Trading 23 (Pty) Ltd and/or Lou Rottanburg ("the financed
shareholders") on terms and conditions to be agreed upon, in order for them to
follow some or all of their rights in terms of the claw-back offer.
Subsequent to the claw-back offer and the issue of the convertible
debentures, the underwriters, the designated shareholders and the financed
shareholders (together, "the investing parties") may, collectively, hold more
than 35% of the issued securities of Excellerate as defined in the Securities
Regulation Code on Takeovers and Mergers ("the Code").
Insofar as such an event occurs, the investing parties, to the extent that
they may be concert parties, may be required to make a mandatory offer in terms
of Rule 8.1 of the Code to the shareholders of Excellerate other than the
investing parties ("the remaining shareholders") to acquire their shares.
However, the Securities Regulation Panel ("SRP") has, in terms of Rule 8.7 of
the Code, granted the investing parties dispensation from making such an offer
to the remaining shareholders, subject to the waiver thereof by the majority of
the remaining shareholders at the general meeting referred to in paragraph 8
below ("the waiver").
8. GENERAL MEETING
A general meeting will be held at the registered office of Excellerate,
Block F, Lower Ground Floor, Pin Mill Farm, 164 Katherine Street, Sandown at
10:00 on Tuesday, 10 December 2002 to consider, and, if deemed fit, pass the
necessary ordinary resolutions to approve the creation and the waiver.
9. DOCUMENTATION
A circular to Excellerate shareholders containing details of the creation
and the waiver and a notice of general meeting ("the creation circular") is
being prepared and will, subject to the approval of the JSE and the SRP, be sent
to Excellerate shareholders on or about Monday, 25 November 2002.
Following the approval by Excellerate shareholders of the creation and the
waiver at the general meeting, a claw-back offer circular will be issued ("the
claw-back offer circular").
10. CONDITIONS PRECEDENT
The claw-back offer is conditional upon the following approvals being
obtained:
* the approvals of the JSE, the SRP and the Exchange Control Department of
the South African Reserve Bank to the creation circular and the claw-back offer
circular;
* the granting of a listing of the letters of allocation, the convertible
debentures and the shares arising from the conversion by the JSE;
* the registration of the claw-back offer circular by the Registrar of
Companies; and
* the approval of the Excellerate shareholders to the creation and the
waiver.
Sandton
Monday, 25 November 2002
Investment bank and sponsor
Nedcor Investment Bank
Corporate law advisers and consultants
Edward Nathan and Friedland
Auditors and reporting accountants
KPMG
Joint underwriter
BoE Corporate
Date: 22/11/2002 04:02:20 PM Produced by the JSE SENS Department
