Rights Offer Finalisation Announcement
1 INTRODUCTION
Shareholders are referred to the rights offer declaration
announcement released on SENS on Wednesday, 26 May 2010 wherein the board of directors of RACEC (”the board”) announced that RACEC intends to proceed with a fully underwritten renounceable rights offer whereby the company will issue 25000 007 new RACEC shares at an issue price of 40 cents per share in order to raise R10 million (”the rights offer”). RACEC and Solethu Civils (Proprietary) Limited (”Solethu Civils” or “the underwriter”) have entered into a loan and underwriting agreement whereby Solethu Civils have agreed to loan the amount of R10 million to RACEC prior to the finalisation of the rights offer. The loan bears interest at the prime interest rate plus two percent, which amount will be payable on finalisation of the rights offer. In terms of the loan and underwriting agreement, the underwriter has
irrevocably undertaken to underwrite the rights offer at an issue price of 40 cents per share, on the basis that any rights offer shares not subscribed for by RACEC shareholders shall be allocated to the underwriter.
Shareholders are hereby advised that the relevant rights offer documentation has been approved by JSE Limited on 24 May 2010 and registered with and approved by the Companies and Intellectual Property Office on 1 June 2010. Accordingly, RACEC will proceed with the rights offer, whereby RACEC shareholders will be given the opportunity to subscribe for 25 000 007 shares in the ratio of seventeen rights offer
shares for every 100 shares held at the close of business on the record date of the rights offer, Friday, 18 June 2010 at 40 cents per share. The rights offer price represents a 9% premium to the 30 day volume weighted average price and a 21% premium to the closing price on 14 May 2010.
The JSE has granted listings for the letters of allocation and rights offer shares as follows:
25 000 007 letters of allocation:
Commencement of listing: Friday, 11 June 2010
Last day to trade: Friday, 2 July 2010
JSE code: RACN
ISIN: ZAE000146197
25 000 007 rights offer shares:
Commencement of listing: Monday, 5 July 2010
2 SUSPENSIVE CONDITONS TO THE RIGHTS OFFER
All suspensive conditions pertaining to the rights offer were met on or before 22 April 2010.
3 SALIENT DATES AND TIMES
The salient dates and times of the rights offer are set out below: 2010
Last day to trade in RACEC shares in order to settle trades by the record date for the
rights offer and to qualify to participate in the rights offer (cum entitlements) Thursday 10 June
Listing and trading of letters of allocation on Friday, 11 June
JSE while shares trade ex rights commences at 09:00 Record date for the rights
offer at the close of business on Friday 18 June
Rights offer opens at 09:00 on Monday, 21 June
Rights offer circular and form of instruction (where Monday, 21 June applicable)
posted to shareholders
Dematerialised shareholders will have their accounts with their CSDP or broker
automatically credited with their entitlements, Monday, 21 June
Certificated shareholders will have their letters of allocation credited to an
electronic register at the transfer secretaries Monday 21 June
Last day to trade in letters of allocation in order to settle trades by the close
of the rights offer and participate in the rights offer at the close of business, Friday, 2 July
Last day for forms of instruction of certificated shareholders wishing to sell all or
part of their entitlement to be lodged with the transfer secretaries by 12:00 Friday,2 June
Listing and trading of rights offer shares on the JSE commences at 09:00 Monday 5 July
Record date for letters of allocation for purposes of determining the holders of letters of allocation that are entitled to subscribe for the rights offer shares Friday, 9 July
Rights offer closes at 12:00 Payment to be made and forms of instruction to be
lodged by certificated shareholders with the transfer secretaries by 12:00 on
(see note 2 below) Friday,9 July
Expected date from which CSDP/broker accounts are credited with rights offer shares
and debited with any payments due in respect of dematerialised rights offer shares, Monday, 12 July
Rights offer share certificates posted to certificated shareholders on or about Monday, 12 July
Results of rights offer released on SENS Monday, 12 July
Notes:
1 All times referred to in the rights offer circular are local times in South Africa.
2 Dematerialised shareholders are required to inform their CSDP or broker of their instructions in terms of
the rights offer in the manner and time stipulated in the custody agreement.
3 Share certificates may not be dematerialised or dematerialised between Friday, 11 June and Friday, 18
June 2010, both days inclusive.
4 Dematerialised shareholders will have their accounts at their CSDP automatically credited with their rights
and certificated shareholders will have their rights credited to an account at Computershare Investor
Services (Proprietary) Limited.
5 CSDPs effect payment in respect of dematerialised shareholders on a delivery versus payment method.
4 PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma income statement and balance sheet of RACEC, showing the effects of the rights offer, are included in Annexure 2 of the circular to be distributed to shareholders on or about 21 June 2010.
An independent reporting accountants` report on the unaudited pro forma income statement and balance sheet is included in Annexure 3 of the circular to be distributed to shareholders on or about 21 June 2010.
The table below sets out the unaudited pro forma financial effects of the rights offer. The unaudited pro forma effects, which are the responsibility
of the directors of RACEC, have been prepared for illustrative purposes only and, because of their pro forma nature, may not give a true reflection of RACEC`s financial position, changes in equity and results of operations
or cash flows.
The unaudited pro forma financial effects are intended to provide information on how the rights offer may have affected RACEC`s Earnings Per Share (”EPS”), Headline Earnings Per Share (”HEPS”) and Net Asset Value(”NAV”) and Tangible Net Asset Value (”TNAV”) per share, measured for the 12 month audited period ended 30 September 2009, had they occurred on 1 October 2008 for income statement purposes and 30 September 2009 for balance sheet purposes.
The unaudited pro forma financial effects have been prepared using accounting policies that comply with International Financial Reporting Standards (”IFRS”) and that are consistent with those applied in the audited results of RACEC for the 12 months ended 30 September 2009.
Unaudited pro forma effects Before the Pro forma Change
rights offer after the rights Offer
(cents) (cents) (%)
Basic EPS (12.6) (10.2) 19.0
Diluted EPS (12.6) (10.2) 19.0
Headline EPS (12.3) (9.9) 19.5
Diluted headline EPS (12.3) (9.9) 19.5
NAV per share 45.8 44.4 (3.1)
TNAV per share 35.9 36.4 1.4
Number of shares in issue, 105 362 643 130 362 650 23.7
net of treasury shares
Weighted average number of 129 128 606 24.0
shares in issue 104 128 599
Diluted weighted average 129 128 606 24.0
number of shares in issue 104 128 599
Notes:
1 The above EPS and NAV per share measures in the “Before
the rights offer” column have been extracted without
adjustment from the income statement and balance sheet
included in the published audited results for the 12
months ended 30 September 2009.
2 The financial effects are calculated on the assumptions
that:
- R10 000 003 is raised in terms of the rights offer;
- Solethu Civils is not taking up any of the rights offers
shares.
Even though Solethu Civils is not a subsidiary of RACEC and RACEC does not have any control over Solethu Civils, Solethu Civils is consolidated into the group in terms of SIC 12 Consolidation - Special Purpose Entities and therefore, any shares taken up by Solethu Civils in terms of the rights offer or as underwriter of the rights offer will be disclosed as treasury shares and any financing required by Solethu Civils to take up the rights offer shares or the underwritten shares will be disclosed as liabilities of the group; and
- the rights offer shares were issued on 1 October 2008
for income statement purposes and on 30 September 2009
for balance sheet purposes.
3 IFRS 2, Share-based payment, is assumed to have no
impact as the closing price of the shares as at the last
practicable date is lower than the issue price.
4 It is assumed that the proceeds from the rights offer
will be used to timeously settle RACEC`s debt bligations
and to fund working capital.
5 Tax has been calculated based on the normal tax rate of
28% for the period.
6 The directly attributable transactions costs of R453 560
are capitalised against the share premium account.
Transaction costs relate to the fees paid to professional, financial and legal advisers and compliance fees and are not expected to have a continuing effect on RACEC.
5 EXCESS APPLICATIONS
No applications for rights offer shares in addition to those allocated to you in terms of the rights offer will be accepted.
6 RESTRICTIONS ON THE RIGHTS OFFER
The rights offer shares will not be freely transferable from South Africa and will have to be dealt with in terms of the Exchange Control Regulations. Shareholders who are resident outside the common monetary area should obtain advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to follow their rights in terms of the rights offer.
7 POSTING OF RIGHTS OFFER CIRCULAR
RACEC intends to post a circular, containing full details of the rights offer, on or about Monday, 21 June 2010.
Cape Town 3 June 2010
Designated Adviser
Merchantec Capital
Date: 03/06/2010 15:24:01 Produced by the JSE SENS department.The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
