| Thu 16 Feb 2006, 9:45 | | Sallies - Signature of Underwriting Agreement and |
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SAL
SAL
Sallies - Signature of Underwriting Agreement and salient terms of the proposed
fully underwritten Rights Offer
SALLIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1903/001879/06
JSE Share Code: SAL
ISIN: ZAE000022588
("Sallies")
SIGNATURE OF UNDERWRITING AGREEMENT AND SALIENT TERMS OF THE PROPOSED FULLY
UNDERWRITTEN RIGHTS OFFER
Introduction
Sallies shareholders are referred to the announcement released on SENS on 9
February 2006 in terms of which it was announced that Sallies had entered into
an agreement which, subject to the outcome of a due diligence review currently
being conducted, could lead to the acquisition of 100% of the issued share
capital of Intercoal (Pty) Ltd, and its wholly owned subsidiary, which entities
collectively trade under the name of Buffalo Fluorspar.
Further to the above the board of directors of Sallies has decided to raise a
minimum of R47.288 million by way of a fully underwritten (renounceable) rights
offer ("the rights offer") and on Wednesday, 15 February 2006 Sallies entered
into an underwriting agreement in relation to the rights offer, the salient
terms of which are detailed below.
Terms and conditions of the underwriting agreement
Sallies has concluded an underwriting agreement with Titan Financial Services
(Proprietary) Limited ("Titan") whereby Titan will fully underwrite the
subscription for an additional 102 800 000 ordinary shares of 0.1 cents each in
the capital of Sallies, at the proposed issue price of 46 cents per share.
Furthermore, Titan shall, by not later than 15 March 2006 or such later date as
the parties may agree in writing, deliver to Sallies a written guarantee. In
consideration for Titan carrying out its obligations to underwrite the rights
offer, Sallies has agreed to pay Titan a commission of R1.18 million, being the
equivalent of 2.5% of the aggregate value of the proposed rights offer.
The underwriting agreement is subject to the fulfillment of, inter alia, the
following conditions precedent by no later than 30 June 2006 (or such later date
as the parties may agree in writing):
- Sallies shareholders in general meeting having properly passed the
requisite resolutions, which will enable Sallies to proceed with and
complete the proposed rights offer and related matters;
- Sallies shall have made application to the JSE Limited ("JSE") for the
listing of the letters of allocation and the listing of the rights offer
shares, and the JSE shall have granted such listing/s;
- the letters of allocation and all relevant accompanying documents shall
have been registered by the Registrar in accordance with the provisions of
the Companies Act; and
- to the extent required, all necessary approvals shall have been obtained
from the relevant regulatory authorities including, inter alia, the JSE and
the Securities Regulation Panel.
Both parties shall use their reasonable commercial endeavours to procure the
fulfillment of the above conditions precedent as soon as reasonably practicable.
Terms of the rights offer and application of rights offer proceeds
The proposed rights offer price of 46 cents per offer share is at a discount of
some 9,8% when compared to the price of Sallies shares on the JSE of 51 cents as
at the close of business on Tuesday, 14 February 2006.
Sallies intends using the proceeds of the rights offer to:
- partially finance the proposed acquisition of Buffalo Fluorspar;
- reduce its interest bearing debt; and
- finance the organic expansion of Sallies" existing operations.
Further details of the proposed rights offer, including the salient dates will
be announced through the medium of the daily press as soon as practicably
possible.
Documentation
Sallies shall by not later than 30 April 2006 post to every shareholder
registered as such on the record date, the letters of allocation in respect of
the rights offer, accompanied by a circular ("the circular") and such other
documents as may be required in terms of the Companies Act and the JSE Listings
Requirements. The circular and the letters of allocation shall outline the
detailed terms and conditions applicable to the rights offer in addition to
other relevant information.
16 February 2006
Johannesburg
Corporate Advisor and Transactional Sponsor
Ernst & Young Sponsors (Proprietary) Limited
(Registration number 2000/031843/07)
Legal Advisors to Sallies
Tabacks & Associates
(Registration number 2000/010434/07)
Date: 16/02/2006 09:45:07 AM Produced by the JSE SENS Department
