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GIJ
GIJ
GijimaAst - Implementation of long-term debtors securitisation funding programme
GIJIMA AST GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/021790/06)
Share code: GIJ
ISIN: ZAE000064606
("GijimaAst" or "the Company")
IMPLEMENTATION OF LONG-TERM DEBTORS SECURITISATION FUNDING PROGRAMME
1. Introduction
1.1 The Company"s sponsor, The Standard Bank of South Africa Limited
("Standard Bank"), is authorised to announce that GijimaAst and its
subsidiaries (collectively "GijimaAst Group") has entered into a long-term
debtors securitisation funding programme ("the Programme"). In terms of the
Programme, GijimaAst Group has raised R256 million from various investors
in the Capital Markets at fixed rates for a period of five years.
2. The programme in summary
As part of implementing the Programme, GijimaAst has sold the trade debtors
of certain of its subsidiary entities to an independently owned special
purpose entity, GijimaAst Finance (Pty) Ltd ("GijimaAst Finance").
GijimaAst Finance has funded the purchase price paid to GijimaAst Group by
issuing 256 of Class A, 60 month secured, non-amortising rated debentures
of R1 million each, and 64 of Class B, subordinated unsecured 61 month non-
amortising unrated debentures of R1 million each. The Class A debentures
have been awarded a zaAA credit rating by CA Ratings, and have been issued
to investors in the Capital Markets. The Class B debentures have been
subscribed for by a subsidiary entity of GijimaAst.
The Class A debentures bear interest at a fixed rate of 10.171 % nacq, and
the funding raised thereon has replaced the GijimaAst Group"s short term
banking and working capital facilities, which bore interest at the prime
overdraft rate. The Class B debentures bear interest at variable rates.
The cession of GijimaAst Group"s book debts in favour of Standard Bank in
respect of banking facilities of approximately R85 million granted to the
GijimaAst Group has been released in full, as has the reversionary cession
of these book debts granted in favour of Kumba Resources Limited (Standard
Bank and Kumba Resources Limited are hereafter referred to as "the
Lenders"). All related cross-suretyships provided to the Lenders by other
GijimaAst Group companies have also been cancelled. The cession and pledge
jointly held by the Lenders in respect of GijimaAst Holdings (Pty) Ltd"s
entire shareholding in AST Distributed Technology Services (Pty) Ltd has
similarly been cancelled.
The Programme constitutes a single indivisible transaction, and the
effective date of the programme is 31 July 2006.
3. Rationale
The Board of the Company has taken a strategic decision to replace short
term debt facilities with longer term secured finance in order to meet its
projected funding requirements for growth over the next few years. By
issuing zaAA rated debentures to investors in the Capital Markets, the
GijimaAst Group has been able to secure its anticipated funding
requirements for future years at competitive rates on the strength of its
debtors book. The Programme has also enabled the GijimaAst Group to secure
the release of numerous restrictive covenants and suretyships which have
inhibited the GijimaAst Group"s ability to apply its balance sheet in an
efficient manner.
In addition to retiring its short-term facilities, the GijimaAst Group has
applied the funds raised in terms of the Programme to settle various
liabilities, including liabilities to the South African Revenue Service and
to Kumba Resources Limited. The GijimaAst Group now has funds available to
consolidate its shareholding in other interests, and to fund its
anticipated net working capital and expansion requirements.
Johannesburg
3 August 2006
Sponsor
Standard Bank
Date: 03/08/2006 02:53:05 PM Produced by the JSE SENS Department
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