| Fri 15 Dec 2006, 7:58 | | CPI- Capitec - Issue of ordinary shares and withdr |
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CPI
CPI
CPI- Capitec - Issue of ordinary shares and withdrawal of cautionary
CAPITEC BANK HOLDINGS LIMITED
Registration number: 1999/025903/06
Share Code: CPI
ISIN Number: ZAE000035861
("Capitec")
ISSUE OF ORDINARY SHARES TO BEE CONSORTIUM AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary notice published on SENS on Friday, 8 December
2006 and in the press on Monday, 11 December 2006, shareholders are advised
that the board of Capitec has agreed, subject to shareholder approval, to
issue 10 000 000 shares in the ordinary share capital of Capitec ("shares")
at 3 000 cents per share to a consortium of black companies, trusts and
black individuals ("the specific issue").
The Capitec group subscribes to the Financial Sector Charter and The Codes
of Good Practice, a draft of which has been published by the Department of
Trade and Industry ("the Codes") as the focus of both documents is to
facilitate broad based black participation in the South African economy.
In terms of the Financial Sector Charter, Capitec is required to have black
shareholding of at least 25% by 2010. To this end, Capitec issued 1 445
582 shares to Arch Equity Limited ("Arch Equity") in 2004, its BEE partner
at the time, increasing Arch Equity`s interest to 15.48%. In addition, 100
000 shares each were issued to two black directors of Capitec taking black
shareholding in Capitec to 15.77%. Subsequent to the issue, however, the
Codes which define a black company differently from the Financial Sector
Charter, were published, bringing about a restructure of Arch Equity. The
result thereof was the creation of Arch Equity Investment Holdings Limited
("Arch Equity BEE"), a black company as defined in the Codes and complying
with the definition of a black company in terms of the Financial Sector
Charter. As a result of the restructure, however, BEE shareholding in
Capitec was reduced to 4.35% consisting of Arch Equity BEE at 4.02%, black
directors at 0.29% and black employees participating in the Capitec Bank
Empowerment Share Purchase Scheme at 0.04%.
In pursuit of fulfilling the requirement to have black shareholding of 25%
by 2010, the board recommends the BEE consortium, as more fully disclosed
under paragraph 3 below, as a suitable BEE shareholder.
2. THE PROPOSED STRUCTURE
The shareholding structure as envisaged will be published in the press
announcement of 18 December 2006.
The BEE Consortium, consisting of the parties listed below, are the
exclusive shareholders of Ash Brook. Ash Brook will hold 100% interest in
Coral.
In terms of the subscription agreement between Capitec, Coral and Ash
Brook, Coral will subscribe for 10 000 000 ordinary shares thereby
obtaining an interest of 12.21% in Capitec. The Industrial Development
Corporation of South Africa Limited (registration number 1940/014201/06)
("IDC") has agreed to finance R285 million of the subscription price of the
specific issue through subscription for preference shares ("the IDC
preference share subscription agreement") to be issued by Coral.
Capitec Bank will subscribe for preference shares to the value of R15
million to be issued by Ash Brook ("the Ash Brook preference shares") in
return for a 5% stake in Ash Brook being issued to the Capitec Bank Share
Empowerment Trust. The Ash Brook preference shares will rank before any
other preference shares which may be issued by Ash Brook. The Ash Brook
preference shares will, however, not be redeemed prior to the IDC
preference shares issued by Coral.
Should any or all of the preference shares issued by Coral to the IDC in
terms of the IDC preference share subscription agreement be cancelled or
redeemed then the Ash Brook preference shares will be redeemed in the same
proportion.
Capitec does not provide security for redemption of any preference shares.
3. THE BEE CONSORTIUM
The BEE consortium consists of the following parties :
BEE Consortium shareholders Constituent Holding in
shareholder BEE
Consortium
Regiments Capital (Pty) Limited L Nyhonyha 15.00%
An authorized financial services provider N Pillay
of pension fund benefits, securities and E Wood
instruments (shares, money market
instruments, debentures and securitized
debt, warrants, certificates and other
instruments, bonds, and derivative
instruments) and deposits defined in the
Banks Act, exceeding 12 Months as well as
less than 12 months
Kaebetso Holdings (Pty) Limited T Mahoele 31.85%
A newly formed investment company Z. Z Nzama
representing black professionals led by
Tsepho Mahoele, Chief Executive Officer
of the Pan African Infrastructure
Development Fund
Lemoshanang Trust 5.00%
Trustees: Mr BL Moropa, Mrs ES Moropa, Ms
MD Mokone and Mr JM Kekana
Mdumo Trust 5.00%
Trustees: Abdool Rawoof Ahmed and Feroza
Mootla
Batho-Batho Trust 20.00%
Trustees: Reverend Tsele (Chairperson),
Vallie Moosa (Former Minister of
Environmental Affairs and Tourism), Kenny
Fihla (Previous CEO of Business Against
Crime) and Sbongiseni Dhlomo
Koma Trust 5.00%
Trustees: Tlhalefang Sekano (founder of
Union Alliance Holdings) and Ramateu
Monyokolo (current CEO of Koma Management
Services and has recently been appointed
by the Minister of Public Enterprises to
serve as a Trustee of Diabo Share Trust
which has been set up to administer
Telkom employees` shares in Telkom)
Nozala Investment (Pty) Limited Nozala 6.15%
The board consists of Dr Makaziwe Mandela Holdings
(chairman), Salukazi Dakile-Hlongwane, (Pty) Limited
Dawn Mokhobo, Lorato Phalatse, Thandi Nozala Trust
January-McLean, Joan Joffe, Dr Busisiwe
Nyembezi, Adele Pretorius and David
Geeringh
Rorisang Basadi Investment Holdings 3.00%
The board consists of Jackie Huntley,
Puli Moloto-Stofile, Modie Mabalayo and
Nombini Mehlomakulu
Capitec Bank Share Empowerment Trust 5.00%
Individuals
Pilisiwe Nomsa Tau 1.00%
Prudence Mtshali 1.00%
Pilisiwe Nomsa Tdikeledi Muriel Majola 1.00%
Bongani Khumalo 1.00%
Total 100.00%
4. DETAILS OF THE SPECIFIC ISSUE
4.1 Rationale and terms
4.1.1 Rationale
The directors propose the specific issue to Coral to increase the
direct interest of black people in Capitec to 16.04% so as to
achieve the ultimate objective of 25% interest in the company by
BEE parties by 2010. This will strengthen the black economic
empowerment credentials of the group and increase compliance with
the Financial Sector Charter and the Codes.
4.1.2 Salient terms
Coral subscribes for 10 000 000 shares in Capitec against
payment of 3000 cents per share;
The BEE Consortium may nominate a non-executive director to
the board of Capitec, subject to approval of the said board
and the Registrar of Banks;
Capitec Bank undertakes to utilise the proceeds of the
specific issue for infrastructure expansion and/or loan
products with pricing limited to the pricing prescribed by
the National Credit Act that is to come into effect on 1
June 2007; and
The participants in the BEE Consortium will remain black,
i.e. they must continue to comply with the Codes from time
to time and are accordingly restricted in dealing with the
shares.
4.2 Effects of the specific issue
The unaudited pro forma financial effects set out below have been
prepared for illustrative purposes only and because of their nature
may not give a fair reflection of the financial position of the
Capitec group nor the effect on future earnings after the specific
issue. The preparation of the financial effects is the responsibility
of the directors of Capitec.
The table below sets out the unaudited pro forma financial effects of
the specific issue on the Capitec group:
Before(1 After(2)(3) Change
) (7)
(cents) (cents) %
Net asset value per share 824 1 089 32%
Net tangible asset value per 768 1 040 35%
share(4)
Earnings per share
- Basic attributable 102.3 98.7 (4%)
- Basic headline 103.6 99.9 (4%)
- Diluted attributable 96.9 94.2 (3%)
- Diluted headline 98.2 95.3 (3%)
Number of shares (`000)
- In issue 71 928 81 928
- Weighted average 71 928 81 928(5)
- Diluted weighted average(6) 75 897 85 897(5)
Notes :
1 Extracted from the published unaudited consolidated interim
results of Capitec for the six months ended 31 August 2006;
2. Basic attributable earnings per share, basic headline earnings
per share, diluted attributed earnings per share and diluted
headline earnings per share are based on the following
assumptions:
- the issue to the BEE consortium and the investment in the
Ash Brook preference shares was effected on 1 March 2006;
- a dividend of 45 cents per share was paid on the 10 000 000
shares issued;
- STC at a rate of 12,5% was taken into account on the
dividends paid and the dividend received on the Ash Brook
preference shares;
- the dividend received on the Ash Brook preference shares was
based on the actual prime rate for the six months to 31
August 2006;
- interest was earned on the net cash at the group`s marginal
return on excess funding (7.03%); and
- a tax rate of 29% was applied;
3. Net asset value per share and the net tangible asset value per
share are based on the following assumptions:
- the issue to the BEE Consortium and the investment in the
Ash Brook preference shares was effected on 31 August 2006;
and
- proceeds of R300 million was received and R15 million was
invested in the Ash Brook preference shares on the same
date;
4. For purposes of calculating the net tangible asset value per
share, computer software was excluded;
5. Weighted average number of shares were computed as if the issue
was effected on 1 March 2006;
6. The diluted number of shares are calculated as if all 6 320 148
outstanding share options as at 31 August 2006 were exercised at
the average market price of R30.26 for the six months then ended;
7. No transaction costs have been taken into account in the
calculation of the financial effects as it will not have a
material impact.
4.3 Conditions precedent
The implementation of the specific issue is subject to the following
remaining conditions precedent by not later than 31 March 2007:
Satisfactory conclusion by Capitec of a due diligence investigation
into the BEE status of Coral and Ash Brook and the delivery by Capitec
to Coral and Ash Brook of a written notice confirming that Capitec is
satisfied, in its sole and absolute discretion, with such status;
Satisfactory conclusion by Capitec of a due diligence investigation
into the solvency of Coral and Ash Brook according to Generally
Accepted Accounting Principles (GAAP) and the delivery by Capitec to
Coral and Ash Brook of a written notice confirming that Capitec is
satisfied, in its sole and absolute discretion, with the outcome of
the investigation; and
Approval by at least 75% of shareholders present in person or by proxy
at the meeting to be convened on 15 February 2007 (excluding persons
participating in the specific issue and their associates).
5. SHARE CAPITAL
5.1 Authorised and issued share capital of Capitec
The authorised and issued share capital of the Capitec group before
and after the specific issue is:
R`000
Before the specific issue
Authorised share capital
100 000 000 ordinary shares of R0,01 each 1 000
100 000 000 non-cumulative, non- 1 000
redeemable, non-participating preference
shares of R0,01 each
Total authorised share capital 2 000
Issued share capital
71 928 412 ordinary shares of R0,01 each 719
1 684 211 non-cumulative, non-redeemable, 17
non-participating preference shares of
R0,01 each
Total issued share capital 736
Share premium
On 71 928 412 ordinary shares of R0,01 347 146
each
On 1 684 211 non-cumulative, non- 154 589
redeemable, non-participating preference
shares of R0,01 each
Total share premium 501 735
R`000
After the specific issue
Authorised share capital
100 000 000 ordinary shares of R,01 each 1 000
100 000 000 non-cumulative, non- 1 000
redeemable, non-participating preference
shares of R0,01 each
Total authorised share capital 2 000
Issued share capital
81 928 412 ordinary shares of R0,01 each 819
1 684 211 non-cumulative, non-redeemable, 17
non-participating preference shares of
R0,01 each
Total issued share capital 836
Share premium
On 81 928 412 ordinary shares of R0,01 647 046
each
On 1 684 211 non-cumulative, non- 154 589
redeemable, non-participating preference
shares of R0,01 each
Total share premium 801 635
6. GENERAL MEETING OF SHAREHOLDERS
A general meeting of shareholders of Capitec will be held in the Innovation
Boardroom of Capitec Bank, 14 Quantum Road, Technopark, Stellenbosch at
10:00 on Thursday, 15 February 2007, to consider the ordinary resolutions
required to give effect to the specific issue proposed.
7. IMPORTANT DATES AND TIMES
2007
Last day for receipt of forms of proxy for
the general meeting by the transfer Tuesday, 13 February
secretaries, by 10:00 on
General meeting to be held in the
Innovation Boardroom of Capitec Bank at 14 Thursday, 15 February
Quantum Road, Technopark, Stellenbosch at
10:00 on
Results of the general meeting and listing
of shares to be issued, announced on SENS Thursday, 15 February
Results of the general meeting and listing
of shares to be announced in the financial Friday, 16 February
press
Anticipated listing of shares on or about Monday, 19 February
Note :
1. The above dates and South African times are subject to change. Any
changes save for the listing date will be announced on SENS and
published in the South African press;
2. The listing date will, however, depend on fulfilment of the conditions
precedent.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement referred to in 1 above is accordingly withdrawn
and shareholders are advised that they no longer need to exercise caution
in dealing in the company`s securities.
Stellenbosch
15 December 2006
PSG Capital Limited - Corporate adviser and sponsor
PricewaterhouseCoopers Inc. - Reporting accountants and auditors
Date: 15/12/2006 07:58:02 Produced by the JSE SENS Department.
