| Mon 31 Oct 2005, 8:58 | | Beige - Terms Of The Partially Underwritten Rights |
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Beige - Terms Of The Partially Underwritten Rights Offer To Beige Shareholders
Beige Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/006871/06)
("Beige" or "the company")
ISIN Code: ZAE000034161 Share code: BEG
TERMS OF THE PARTIALLY UNDERWRITTEN RIGHTS OFFER TO BEIGE SHAREHOLDERS
1. Introduction
It was announced on Tuesday, 19 July 2005 that Beige, in partnership with
Thebe Healthcare (Pty) Ltd and Mothebe Investments (Pty) Ltd, will acquire
the shares in and the divisional business and assets of Quality Products
(Pty) Ltd from Unilever South Africa Home and Personal Care (Pty) Ltd
("USAHPC") for an acquisition consideration of R26 500 000 ("the Quality
Products acquisition") and that Beige will raise its share of the funding
for the acquisition through a partially underwritten rights offer ("the
rights offer").
On Wednesday, 31 August 2005, the directors of Beige announced the signing
of an agreement providing for the acquisition by Beige of the shares in
Arcfin Trading 46 (Proprietary) Limited ("Arcfin") which acquired the
divisional business and assets of Value Chemicals CC relating to the
manufacture of Eco-Soft laundry soap powder ("Value Chemicals acquisition")
for an acquisition consideration of R2 000 000 to be settled in cash of
R1 000 000 on or before 30 November 2005 and through the issue of
13 333 333 new shares in Beige at 7.5 cents per share.
Beige is now proceeding with the rights offer in order to raise
approximately R11 415 291.65 by offering for subscription 228 305 833 Beige
shares ("rights offer shares") to Beige shareholders or their renounces at
five cents per rights offer share ("the rights offer price") in the ratio
of two rights offer shares for every three Beige shares held on the record
date for the rights offer being Friday, 18 November 2005.
2. Purpose of the Rights Offer
The purpose of the rights offer is to enlarge the company"s capital base in
order to repay indebtedness incurred in respect of acquisitions and to
provide additional working capital for the company. On completion of the
rights offer, Beige will have sufficient resources to pay the initial
portion of the purchase price of R8.5 million to USAHPC in respect of the
Quality Products acquisition and to settle the R1 000 000 cash portion of
the purchase consideration in respect of the Value Chemicals acquisition.
3. Terms of the rights offer
Beige is offering for subscription by way of a renounceable rights offer to
Beige shareholders and/or persons in whose favour they renounce their
rights, a total of 228 305 833 rights offer shares at a rights offer price
of five cents per rights offer share in the ratio of two rights offer
shares for every three Beige shares held on the record date of the rights
offer, being Friday, 18 November 2005. The amount is payable in full on
acceptance by certificated shareholders, or on a delivery versus payment
basis by the CSDP or broker of dematerialised shareholders, as the case may
be. The terms and conditions of the rights offer will be set out in full
in a circular to be posted to shareholders on or about Monday, 21 November
2005 ("the circular").
Beige shareholders will be entitled to apply for a greater number of rights
offer shares than those offered to them in terms of the rights offer and,
in the event that there are excess rights offer shares available for
subscription, such excess rights offer shares will be allocated equitably
to shareholders applying for same, taking into account the number of shares
held by such shareholder just prior to the allocation of excess shares,
including those taken up as a result of the rights offer and the number of
excess rights offer shares applied for by the shareholder.
Letters of allocation in respect of the rights offer will be issued in
dematerialised form and an electronic record for certificated shareholders
will be maintained by Ultra Registrars (Pty) Ltd. This will enable both
dematerialised and certificated shareholders to sell or renounce some or
all of their rights offer shares in accordance with the procedures set out
in the circular.
4. Underwriting
A consortium of underwriters, being Watermark Securities (Pty) Ltd,
Micronized Holdings (Pty) Ltd and Arcay Merchant (Pty) Ltd, have agreed to
underwrite the rights offer to the value of R7 000 000. Rights offer
shares not subscribed for in terms of the rights offer and the provisions
for excess applications will be subscribed for by the underwriters at the
rights offer price.
5. Pro forma financial effects of the rights offer on Beige
The pro forma financial effects of the rights offer and the
acquisition of Quality Products on the published audited results of
Beige for the year ended 28 February 2005 is set out below. The pro
forma information is the responsibility of the directors and has been
prepared for illustrative purposes only. The pro forma information
assumes the rights offer and Quality Products acquisition was
effective for income statement purposes on 1 March 2004 and for
balance sheet purposes on 28 February 2005.
After the After the
acquisition acquisition
of Quality and the
Before Products Change rights Change
(cents) (cents) (%) offer (%)
(cents)
Loss per share (1.95) (1.09) 44.3% (0.64) 66.9%
Headline loss
per share (1.09) (0.23) 79.0% (0.16) 85.0%
Net asset
value per
share 6.73 6.73 -- 5.97 (11.2%)
Net tangible
asset value
per share 6.73 3.76 4.30 (36.1%)
Weighted
average number
of shares in
issue 291 279 390 291 279 390 -- 519 584 833 78.4%
Fully diluted
weighted
average shares
in issue 317 279 390 317 279 000 -- 545 584 833 71.9%
Number of
shares in
issue 295 145 416 295 145 416 -- 523 450 833 77.4%
Fully diluted
shares in
issue 321 145 416 321 145 000 -- 549 450 833 71.1%
Notes
The adjustments have been made based on the audited balance sheet as at 28
February 2005 as though the rights offer occurred on that date and on the
audited income statement of Beige for the year ended 28 February 2005 as though
the rights offer occurred with effect from 01 March 2004. Adjustments made are
based on the following assumptions:
1. The information used to calculate the effects of the Quality Products
acquisition (Column "A") has been extracted from the financial results of
Quality Products for the year ended 31 December 2004, details of which are more
fully set out in the circular.
2. Beige is responsible for the management of the Quality Products business
and factory and accordingly, Quality Products has been treated as a subsidiary
and minority interests have been accounted for.
3. The rights offer (Column "B") assumes 228 305 833 new shares at 5 cents per
share is fully subscribed as at 28 February 2005.
4. The proceeds from the rights offer are assumed to be applied against the
purchase consideration due in relation to the Quality Products acquisition, then
bank overdraft facilities and, thereafter, the balance to be placed on call
account.
5. The share information has not been adjusted for issue of shares for cash,
for the shares issued in relation to the acquisition of Value Chemicals and for
options exercised by directors as these issues occurred after the year end.
6. Further details of these share issues are included in the statement of
revised listings particulars incorporated in the circular. The fully diluted
information effectively takes into account the dilution in relation to the
exercise of the options by directors.
7. Operating expenses have been increased by the estimated costs associated
with the acquisition of Quality Products and the rights offer, including the
underwriting commission.
8. Income from investments has increased on the assumption that the balance of
the proceeds is invested in a call account bearing interest at 7%.
8. Finance charges have been reduced on the assumption that the proceeds of
the rights offer will firstly be applied to reduce the bank overdraft and
finance for the acquisition of Quality Products, which will result in a
reduction in interest paid assumed at the prime rate, being the current rate
charged by the company"s bankers.
The taxation effect has been assumed at 30% of the net adjustment, being the
corporate rate of taxation for the year ended 28 February 2005.
6. Conditions precedent
There are no outstanding conditions precedent to the rights offer, but the
rights offer circular is subject to the approval of the JSE Limited and the
registration of the documentation by The Companies and Intellectual
Property Registration Office, which registration is expected to be approved
on 03 November 2005. The Quality Products acquisition remains subject to
the approval of Beige shareholders in a general meeting convened for the
purpose, but the directors are pleased to advise that they have received
irrevocable undertakings from approximately 60% of Beige shareholders to
vote in favour of the acquisition.
7. Salient dates and times in respect of the rights offer and the Quality
Products acquisition
Last day to trade in Beige shares in Friday, 11 November
order to settle trades by the record
date for the rights offer and to
qualify to participate in the rights
offer (cum entitlement) on
Beige shares commence trading ex- Monday, 14 November
rights on the JSE at 09:00
Listing of and trading in the letters Monday, 14 November
of allocation commences at 09:00
Record date for purposes of Friday, 18 November
determining the Beige shareholders
entitled to participate in the rights
offer at the close of business on
Circular and, where applicable, form Monday, 21 November
of instruction posted to shareholders
on
Rights offer opens at 09:00 on Monday, 21 November
Holders of dematerialised Beige shares Monday, 21 November
will have their custody accounts at
their CSDP or broker automatically
credited with their letters of
allocation on
Holders of certificated Beige shares Monday, 21 November
will have their letters of allocation
credited to an electronic register at
the transfer secretaries on
Last day for form of instruction to be Friday, 02 December
lodged with the transfer secretaries
by holders of certificated Beige
shares wishing to sell all or part of
their entitlement by 12:00 on
Last day to trade (LDT) in letters of Friday, 02 December
allocation in order to settle trades
by the record date for the rights
offer and participate in the rights
offer at the close of business on
Last day to lodge forms of proxy for Friday, 02 December
the general meeting to be held to
approve the Quality Products
acquisition by 10:00 on
Listing and trading of rights offer Monday, 05 December
shares commences on the JSE at 09:00
General meeting of Beige shareholders Tuesday, 06 December
at 10:00 on
Results of general meeting announced Tuesday, 06 December
on SENS on
Record date for letters of allocation Friday, 09 December
on
Rights offer closes at 12:00 and Friday, 09 December
payment to be made and form of
instruction lodged by holders of
certificated Beige shares with the
transfer secretaries by that time on
(See note 2)
CSDP/broker accounts credited with Monday, 12 December
rights offer shares and debited with
any payments due in respect of holders
of dematerialised rights offer shares
on
Rights offer shares certificates in Monday, 12 December
terms of the rights offer posted to
holders of certificated rights offer
shares on or about
Results of rights offer announced on Monday, 12 December
SENS on
Notes:
1. Dates and times are subject to change. Any such change will be announced
on SENS. All times referred to in the announcement are local times in
South Africa.
2. Holders of dematerialised Beige shares are required to notify their CSDP or
broker of the action they wish to take in respect of the rights offer in
the manner and by the time stipulated in the agreement governing the
relationship between the Beige shareholder and his CSDP or broker.
3. Beige share certificates may not be dematerialised or rematerialised
between Monday 14 November 2005 and Friday, 18 November 2005, both days
inclusive.
4. CSDPs effect payment in respect of holders of dematerialised rights offer
shares on a delivery versus payment basis.
7. Circular to shareholders
A circular providing full details of the Quality Products acquisition and
the rights offer and incorporating the letter of allocation in respect of
certificated shareholders will be posted to shareholders on or about 21
November 2005.
In accordance with AltX Listings Requirements, shareholders are advised of the
risks of investing in a company listed on AltX and are advised that the JSE does
not guarantee the viability or the success of a company listed on AltX. In
terms of JSE Listings Requirements a Designated Adviser has to be retained by
the company. The Designated Adviser is required to, inter alia, attend all
board meetings held by the company to ensure that all JSE Listings Requirements
and applicable regulations are complied with, approve the financial director of
the company and guide the company in a competent, professional and impartial
manner. If the company fails to retain a Designated Adviser it must make
arrangements to appoint a new Designated Adviser within 10 business days,
failing which the company faces suspension of trading of its securities. If a
Designated Adviser is not appointed within 30 days of its suspension the company
faces the termination of its listing without an offer to minorities.
Johannesburg
28 October 2005
Designated Advisor Corporate Advisor
Arcay Corporate Services Arcay Merchant
Date: 31/10/2005 08:59:26 AM Produced by the JSE SENS Department
