| Thu 16 Mar 2006, 11:50 | | Sallies Limited - Amendment To The Proposed Terms |
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SAL
SAL
Sallies Limited - Amendment To The Proposed Terms Of The 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")
AMENDMENT TO THE PROPOSED TERMS OF THE FULLY UNDERWRITTEN RIGHTS OFFER
Introduction
Sallies shareholders are referred to the announcement released on SENS on 16
February 2006 wherein it was announced that Sallies had entered into an
underwriting agreement ("underwriting agreement") with Titan Financial Services
(Proprietary) Limited ("Titan") whereby Titan would fully underwrite the
proposed subscription in terms of the proposed rights offer of an additional 102
800 000 ordinary shares of 0.1 cents each in the issued share capital of
Sallies, at the proposed issue price of 46 cents per share, thereby raising a
total of some R47,3 million, less costs for Sallies.
Amendment to the Proposed Terms of the Rights Offer
After having considered the growth opportunities available to Sallies, both
organic as well as external, the board of directors has decided to increase the
amount to be raised by way of the proposed rights offer from R47,3 million to
R65,0 million through the allotment and issue of 141 354 896 ordinary shares of
0.1 cents in the capital of Sallies, in the ratio of 55 new shares for every 100
shares held by shareholders at the record date.
The price at which the rights offer shares will be offered to Sallies
shareholders remains unchanged at 46 cents per share. In consideration for Titan
carrying out its obligations to underwrite the rights offer, Sallies has agreed
to pay Titan a commission of 2,5% of the aggregate amount to be raised, namely
R1,63 million.
FRM Strategies (Proprietary) Limited ("FRM") entered into a Memorandum of
Understanding ("MOU") with, inter alia, Titan, on Wednesday, 15 March 2006, in
terms of which Titan agreed to underwrite the enlarged rights offer on certain
pre-conditions which are as follows:
FRM has options to acquire approximately 39 million new shares in Sallies of
which approximately 22 million options, each relating to one Sallies share,
vested on 14 February 2006, and of which most must be exercised by 13 August
2006. To the extent that Titan do not acquire 141,3 million Sallies shares
pursuant to the rights offer, FRM have agreed to cede to Titan for a period of
48 hours following the close of the rights offer, the difference between the
actual number of shares they acquire pursuant to the underwriting of the rights
offer and the aforementioned 141,3 million Sallies shares, up to a maximum of 22
million Sallies shares - by ceding its own rights to share options. The cession
will take place at a price equal to 46 cents per Sallies share less the strike
price of the relevant options to FRM (which varies between 20 and 22 cents per
share) which amount will be payable in cash by the cessionary who takes up the
offer against delivery of a cession of those rights by FRM; and
rights of pre-emption between the parties to the MOU for a period of 48 hours
should any of the parties to the MOU wish to dispose of any of their shares in
Sallies.
In order to facilitate the implementation of the rights offer on the revised
terms FRM have agreed to enter into the MOU.
The other terms of the proposed rights offer remain unchanged from those
previously announced.
Circular to shareholders
A circular containing full details of the rights offer, which will also include
full details of the BEE transaction as announced on 28 February 2006, will be
posted to Sallies shareholders in due course.
Dealing in Securities
As three of the directors of Sallies (Messrs Flack, Moffat and Robertson ("the
affected directors")) are also shareholders and directors of FRM, the cession of
options, in terms of the MOU, to Titan could be construed as "dealing in the
company"s securities" in terms of the Listings Requirements of the JSE Limited
("JSE"). Since Sallies is currently trading under a cautionary and will probably
continue to do so for an extended period, the directors have sought and have
been granted the relevant dispensation by the JSE, on condition that the
director"s dealings are announced, firstly, when the MOU is signed and,
secondly, when the sale is concluded. The ruling stipulates that the sale of
Sallies shares will only be implemented outside of closed or prohibited periods.
16 March 2006
Johannesburg
Corporate Advisor and Transactional Sponsor Legal Advisors to Sallies
Ernst & Young Sponsors (Proprietary) Limited Tabacks & Associates
(Registration number 2000/031843/07) (Registration number
(2000/010434/07)
Date: 16/03/2006 11:50:13 AM Produced by the JSE SENS Department
