| Tue 30 Aug 2005, 18:24 | | JCI Limited - Announcement To Shareholders And Deb |
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JCI Limited - Announcement To Shareholders And Debenture Holders
JCI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1894/000854/06)
Share code: JCD (suspended)
ISIN: ZAE000039681
Debenture code: JCDD (suspended)
ISIN: ZAE000039699
(`JCI`)
ANNOUNCEMENT TO SHAREHOLDERS AND DEBENTURE HOLDERS
1. Introduction
Shareholders and debenture holders are referred to the cautionary announcement
dated 19 August 2005 and are advised that agreement has been reached between JCI
and Investec Bank Limited (`Investec`), in terms of which Investec will, subject
to the fulfillment of certain conditions precedent as set out in paragraph 5
below, arrange a loan facility of up to R460 million (`the facility`) to a
special purpose vehicle (`SPV`) to be constituted as a wholly-owned subsidiary
of JCI.
2. Purpose of the facility
The facility will provide JCI and SPV with funding to enable them respectively
to meet certain immediate cash flow requirements; to restructure existing
facilities; to follow their rights in terms of a rights offer (`the WAL rights
offer`) currently proposed by Western Areas Limited (`WAL`); and to underwrite a
portion of the WAL rights offer. Details of the WAL rights offer are published
on the Securities Exchange News Service (`SENS`) of the JSE Limited (`the JSE`)
today. JCI currently has a loan account claim of approximately R230 million
against WAL (`the WAL loan`), which is repayable by the allotment and issue by
WAL to JCI of shares in terms of the WAL rights offer, or in cash if the WAL
rights offer is oversubscribed.
The facility will be used by SPV, amongst other purposes:
- to subscribe for WAL shares in terms of the WAL rights offer;
- to underwrite a portion of the WAL rights offer up to a maximum of R250
million;
- to refinance a borrowing from a financial institution to which approximately
15 million WAL shares have been pledged (`the pledged shares`) as security. As a
result of such refinancing, SPV will acquire the pledged shares in an
unencumbered form; and
- to satisfy the judgement debt of JCI to Benoryn Investments (Proprietary)
Limited (`Benoryn`) in respect of the claim against Kabusha Mining and Finance
(Proprietary) Limited in respect of which JCI has bound itself as surety.
3. Details of SPV
The following assets, all of which are currently owned by JCI or wholly-owned
subsidiaries of JCI, will be transferred to SPV:
- all JCI`s shares in and loan account claims against Letseng Investment
Holdings South Africa (Proprietary) Limited;
- JCI`s loan account claim against Equitant Trading (Proprietary) Limited
(`Equitant`);
- 200 million unsecured convertible redeemable preference shares in Matodzi
Resources Limited (`Matodzi`), currently pledged to Benoryn, which preference
shares are convertible into Matodzi ordinary shares;
- the WAL loan and the right to receive repayment of the WAL loan by the
allotment and issue of shares in WAL in terms of the WAL rights offer, or the
receipt of cash in the event that the WAL rights offer shall be oversubscribed;
- approximately 15 million WAL shares currently pledged to a financial
institution;
- 12 000 debentures in Kovacs Investment 608 (Proprietary) Limited and all
rights relating to those debentures in respect of the Boschendal wine estate;
- approximately 357 million redeemable preference shares in Jaganda
(Proprietary) Limited, each with a redemption price equal to the aggregate of
R0.25 and 20% of the 30 day weighted average traded price of the shares of
Simmer and Jack Mines Limited on the JSE as at the date of redemption, in excess
of R0.25;
- 6.5 million WAL shares currently pledged to the Industrial Development
Corporation of South Africa Limited (`IDC`) in terms of a loan extended by the
IDC to Letseng; and
- the property portfolio of JCI and its subsidiary companies,
(collectively, `the assets`).
4. Terms of the facility
SPV will be able and entitled to draw down on the facility for a period which
shall be the longest of 60 days from the date of fulfilment of the conditions
precedent to the facility, the date which the parties shall agree as the date on
which WAL shall implement the WAL rights offer, or such other date as the
parties may agree.
The assets, as well as JCI`s shares in and loan account claims against SPV, and
the loan account claims of all entities selling the assets to SPV, will be ceded
and pledged to Investec as security for the facility, JCI and such entities
having bound themselves to Investec as guarantors for SPV in respect of its
obligations in terms of the facility.
Interest will be charged on the facility at the prime rate as charged by
Investec from time to time. Capital and interest will be repaid from the
proceeds of the sale of the assets, the refinancing of any portion of the
facility and/or all amounts received by SPV by way of dividend, interest, the
repayment of any loan, or any other payment.
The facility will be repayable on the later of 18 months after the final draw
down date, or such other date (not being later than 24 months after the final
draw down date) as the parties may agree. SPV shall be entitled to repay the
facility early, subject to the payment of break costs.
A raising fee will be payable to Investec in respect of the facility, in an
amount being the greater of:
- R50 million; or
- the aggregate of 30% of the increase in value of the assets and 10% of the
increase in the price of approximately 2.2 billion JCI shares, during the period
commencing on 16 August 2005 and terminating on the date on which the facility
shall be repaid (or, such later date as Investec shall determine, which date
shall be not later than 18 months after the date on which the facility shall be
repaid).
5. Conditions precedent to the facility
The facility is subject to the fulfilment of a number of conditions precedent,
including:
- compliance with all relevant regulatory requirements;
- the reconstitution of the board of directors of, amongst others, WAL and JCI.
Further details regarding the reconstitution of the board of directors of JCI
are included in paragraph 6 below and details of the reconstitution of the
boards of directors of WAL are published on SENS today; and
- other conditions precedent as are normal in a transaction of this nature.
6. Reconstitution of the board of directors of JCI
The granting of the facility is subject to the reconstitution of, amongst
others, the board of directors of JCI (`the JCI board`). In compliance with
paragraph 3.59 of the Listings Requirements of the JSE Limited (`the JSE`), JCI
advises that Messrs CHD Cornwall, RAR Kebble and J Stratton have
resigned as directors of JCI with effect from close of business on 24 August
2005, and Mr HC Buitendag retires with effect from the same date, and the
following directors have been appointed to the JCI board on the same date:
- Mr PH Gray (Chief Executive Officer)
- Mr JC Lamprecht (Financial Director)
Mr RB Kebble will relinquish his responsibilities as chief executive officer,
but will remain on the JCI board as a non-executive director.
The following new appointments will be made to the JCI board, and shareholders
will be advised in due course:
- Mr DM Nurek (Independent Non-Executive Chairman)
- Mr DE Jowell (Independent Non-Executive Director)
- Mr PRS Thomas (Independent Non-Executive Director).
In addition, it is proposed that in due course, Mr AC Nissen be appointed as an
Independent Non-Executive Director and an additional Independent Non-Executive
Director will be appointed to the JCI board simultaneously.
7. Change of auditors of JCI
The existing auditors of JCI, will be replaced by KPMG Inc for the 2005 year-end
audit. It is anticipated that JCI`s audited annual report will be posted to
shareholders and debenture holders on or about 30 September 2005, at which time
JCI will apply to the JSE for the suspension of its shares and debentures on the
JSE to be lifted.
8. Categorisation of transaction
In terms of the Listings Requirements of the JSE:
The sale by JCI and certain of its subsidiaries of the assets to SPV on loan
account and the cession and pledge of such assets, and related loan accounts to
Investec as security for the facility; and
the subscription by JCI for WAL shares in terms of the WAL rights offer and the
underwriting by JCI of a portion of the WAL rights offer up to a maximum of R250
million;
have been categorised as category 1 transactions. JCI has obtained irrevocable
undertakings from shareholders holding at least 50.1% of the JCI shares in issue
to vote in favour of each of the transactions in paragraphs 8.1 and 8.2 above.
In terms of a ruling by the JSE such transactions will be ratified at the
forthcoming annual general meeting of JCI shareholders.
9. Additional announcements, cautionary announcements and withdrawal of
cautionary announcement
Shareholders and debenture holders are referred to:
- the cautionary announcement published on 10 June 2005 and are advised that the
negotiations referred to in such announcement are still in progress and
shareholders and debenture holders are accordingly advised to continue to
exercise caution in dealing OTC (Over The Counter) in their shares and
debentures until a further announcement is made in this regard;
- the cautionary announcement published on 19 August 2005 and are advised that
such cautionary announcement is now withdrawn; and
- the joint announcement by WAL and JCI published on SENS today.
Johannesburg
30 August 2005
Debt arranger
Investec Bank Limited
(Registration number 1969/004763/06)
Legal advisor to JCI
Tabacks
Sponsor to JCI
Sasfin corporate finance
A Division of Sasfin Bank Limited
Legal advisor to Investec Bank Limited
Werksmans Incorporated
(Reg. No. 1990/007215/21)
Advisor to Investec Bank Limited
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/00463/06)
Date: 30/08/2005 05:53:45 PM
Produced by the JSE SENS Department
