| Fri 16 Mar 2007, 17:07 | | AFB - Alexander Forbes Limited - Key features of t |
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AFB
AFB
AFB - Alexander Forbes Limited - Key features of the re-investment election
and withdrawal of cautionary announcement
Alexander Forbes Limited
Registration number: 1958/001974/06
JSE share code: AFB
NSX share code: AFS
BSE share code: FORBES
ISIN: ZAE000018230
("Alexander Forbes")
KEY FEATURES OF THE RE-INVESTMENT ELECTION AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Alexander Forbes shareholders ("shareholders") are referred to the
announcement dated 28 February 2007 and to the circular issued on 5
February 2007 embodying a scheme of arrangement dated 2 February 2007, as
amended on 22 February 2007 (the "Scheme"), in terms of which a consortium
of private equity investors led by Actis Africa Fund 2 LP("the Actis
Consortium"), acting through Cleansheet Investments (Proprietary) Limited
("Cleansheet Investments"), proposed the acquisition of the share capital
of Alexander Forbes by way of a scheme of arrangement in terms of section
311 of the Companies Act, No. 61 of 1973, as amended. The ultimate holding
company of Cleansheet Investments is Richtrau No. 131 (Proprietary) Limited
("EquityCo").
2. Adjournment of scheme Meeting
In the announcement dated 28 February 2007 shareholders were advised that
the scheme meeting of shareholders held on Wednesday, 28 February 2007
("the scheme meeting") had been adjourned to a date to be advised, but to
be announced on SENS by no later than 30 April 2007 and thereafter in the
South African press. The adjournment of the scheme meeting was to allow
discussion regarding possible amendments to the terms of the scheme,
principally being the introduction of a re-investment election ("the re-
investment election") for existing shareholders.
As a result of the above, the scheme meeting to consider the scheme of
arrangement proposed by Cleansheet Investments between Alexander Forbes and
holders of options over Alexander Forbes shares (the "option scheme
meeting") was also adjourned.
3. Key features of the re-investment election
The terms of the Scheme will be amended, insofar as necessary, to reflect
the following principle features pertaining to the re-investment election:
Shareholders will be offered economic participation in up to 26.5% of the
equity in EquityCo, pro rata to their shareholdings in Alexander Forbes on
the re-investment record date referred to below. Approximately R991 million
of the total cash consideration payable in terms of the Scheme may, in
aggregate, be applied by shareholders for the purpose of subscribing for
the equity portion of the re-investment right
This equity portion will be held indirectly through a wholly owned
subsidiary ("SubCo") of an existing listed entity. SubCo will issue
preference shares to re-investing shareholders to reflect this equity
interest in EquityCo
The effect of the preference shares will be to give the holder thereof a
see-through economic and voting interest in the equity of EquityCo
In addition, and linked to the right to subscribe for preference shares in
SubCo, 100% of the payment in kind ("PIK") debt requirement for the funding
of the Scheme by EquityCo, totalling R750 million, will also be made
available to reinvesting shareholders, pro rata to their shareholding in
Alexander Forbes on the re-investment record date referred to below
This PIK debt participation will be indirect and will be offered through
debentures issued by SubCo. R750 million of the total cash consideration
payable in terms of the Scheme may, in aggregate, be applied by
shareholders for the purpose of subscribing for these SubCo debentures
Each preference share issued by SubCo will be linked to a specified
proportion of debentures issued by SubCo and these preference shares and
debentures will therefore only be capable of being acquired and traded as
linked units
Application will be made to the JSE Limited ("JSE") to list the linked
units in the specialised securities sector of the JSE
The re-investment election will only be implemented if the JSE grants a
listing of the linked units and if sufficient SubCo linked units are
subscribed for by shareholders, thereby enabling SubCo to acquire at least
10% of the equity of EquityCo. Shareholders will be entitled to apply for
more than their pro rata allocation of SubCo linked units and excess
allocations will be awarded on a pro rata basis (based on each
shareholder`s excess allocations applied for, as a percentage of the total
excess allocations applied for by all shareholders). However, each
qualifying Alexander Forbes shareholder may only receive a maximum
percentage interest in SubCo linked units which equates to an effective
interest in EquityCo of 70% of the shareholding of that shareholder in
Alexander Forbes on the re-investment record date referred to below.
The Actis Consortium`s advisors are currently in discussions with the JSE
regarding the listing of the linked units. Approval for the listing of the
linked units of SubCo in the specialised securities sector of the JSE lists
will only be granted upon the formal listing application by SubCo being
successful and the approval by the JSE of the pre-listing statement to be
issued by SubCo concerning the SubCo linked units.
Tuesday, 27 March 2007, at 17h00, is the record date for participation in
the re-investment election ("the re-investment record date"), by which date
persons who wish to qualify for and be eligible to participate in the re-
investment election must be reflected in the register of shareholders of
Alexander Forbes. As settlement usually takes place 5 trading days after a
transaction, the last day to trade, in order to be reflected in Alexander
Forbes` share register on Tuesday, 27 March 2007, will be Monday, 19 March
2007 in most cases. Shareholders are also advised that the re-investment
election is not transferable and may only be exercised by the shareholders
reflected in the register on the re-investment record date. Subco will not
register a linked unit in the name of any party not registered as a
shareholder on the re-investment record date. The position indicated above
is further subject to the following:
- Shareholders holding the same number of Alexander Forbes shares
("shares"), or more shares, on the record date for the Scheme (i.e.
the date defined in the circular to shareholders dated 5 February 2007
as the "record date for the Scheme", which date will be updated in the
document containing the revised terms of the Scheme) than they own on
the re-investment record date, may only take up the re-investment
election relative to the number of shares held on the re-investment
record date, as reflected in the Alexander Forbes share register;
- Shareholders holding a lower number of shares on the record date for
the Scheme than they hold on the re-investment record date may only
take up the re-investment election relative to the number of shares
held on the record date for the Scheme, as reflected in the Alexander
Forbes share register;
- The number of shares held on any date other than the re-investment
record date and the record date for the Scheme will be disregarded for
the purposes of determining participation in the re-investment
election.
- In order to participate in the re-investment election, it is necessary
to hold shares on both the re-investment record date and on the record
date for the Scheme, as reflected in the Alexander Forbes share
register.
This announcement deals only with certain key features and principles of
the re-investment election. Full details of the terms and conditions of the
re-investment election will be made available in the pre-listing statement
to be issued by SubCo and the documents containing the revised terms of the
Scheme.
The re-investment election will not be extended to holders of options over
Alexander Forbes shares.
4. Undertakings
Shareholders are advised that VenFin Risk Services Investments
(Proprietary) Limited, which owns approximately 115,9 million Alexander
Forbes shares, has undertaken to the Actis Consortium to vote in favour of
the Scheme at the scheme meeting. Irrevocable undertakings to vote in
favour of and/or to recommend to their clients that their clients vote in
favour of the Scheme at the scheme meeting and accept the re-investment
election, have also been received from the following asset managers:
- Allan Gray, holding approximately 90,2 million Alexander Forbes shares
on behalf of its clients. This undertaking is subject to certain
terms and conditions, including that the detailed terms and conditions
of the re-investment election, after publication, are satisfactory to
Allan Gray; and
- Stanlib Asset Management, holding approximately 33,5 million Alexander
Forbes shares on behalf of its clients.
As at the date of this announcement, this brings the number of shares in
respect of which irrevocable commitments have been obtained to vote (or to
recommend voting)in favour of the Scheme at the scheme meeting, to more
than 50% of the number of Alexander Forbes in issue.
5. Further announcements
Notices convening the adjourned scheme meeting and the option holder scheme
meeting and indicative salient dates and times of these scheme meetings
will be published in due course.
6. Withdrawal of cautionary announcement
Alexander Forbes shareholders are advised that the cautionary announcement
dated 28 February 2007 concerning the proposed re-investment election is
hereby withdrawn.
Sandton
16 March 2007
Financial adviser and
sponsor to Alexander Forbes
JPMorgan
Financial adviser to the
Actis Consortium
Rand Merchant Bank
Legal adviser to Alexander
Forbes
Edward Nathan Sonnenbergs
Legal advisers to the Actis
Consortium
Deneys Reitz
Independent adviser to the
Alexander Forbes Board
KPMG
Date: 16/03/2007 17:07:54 Produced by the JSE SENS Department.
