BDM
BDM - Buildmax - Update On The Partial Offer, Rights Offer And
Withdrawal Of Cautionary
BUILDMAX LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1995/012209/06)
Share code: BDM & ISIN: ZAE000011250
("Buildmax" or the "company" or the "group")
UPDATE ON THE PARTIAL OFFER, RIGHTS OFFER AND WITHDRAWAL OF
CAUTIONARY
INTRODUCTION
Shareholders are referred to announcements released on the
Securities Exchange News Service ("SENS") in relation inter alia to
the offer by Brait IV Investment, L.P. and Brait IV SA Partnership
(together "Brait") and Coronation Asset Management (Proprietary)
Limited ("Coronation") to acquire 53.5% (fifty three point five per
cent) of the shares held by each of the Buildmax shareholders
excluding shares held by (i) Brait; (ii) Coronation; (iii)
Westbrooke Capital Partners (Proprietary) Limited, Westbrooke
Investments (Proprietary) Limited and Westbrooke Special
Opportunities (Proprietary) Limited (together "Westbrooke"); and
(iv) Interactive Capital (Proprietary) Limited, Interactive Capital
Management (Proprietary) Limited and Cream Magenta 36 (Proprietary)
Limited (together "Interactive"), at R0.25 (twenty five cents) per
share ("the partial offer")and the renounceable rights offer to be
undertaken by Buildmax in order to raise R300 502 033 (the "rights
offer"), the last of which was dated 20 August 2010.
Shareholders are advised that a majority of independent Buildmax
shareholders in general meeting approved a waiver of a mandatory
offer under rule 8 of the Securities Regulation Code and Rules of
the Securities Regulation Panel that would otherwise be required to
be made by Brait and Coronation to minority Buildmax shareholders
(the "waiver"). A special resolution increasing the authorised share
capital of the company as well as ancillary resolutions were in
addition passed by the requisite majority of shareholders.
UPDATE ON THE PARTIAL OFFER
The partial offer remains subject to the Securities Regulation Panel
confirming that, in light of shareholders approving the waiver, they
have granted a dispensation to Brait and Coronation from the
obligation to make a mandatory offer.
The partial offer circular is still in the process of being
finalised and the salient dates and times relating to the partial
offer are as set out in the announcement released on SENS on 20
August 2010, but are subject to change. Any changes will be released
on SENS and published in the press.
THE RIGHTS OFFER
In terms of the rights offer Buildmax shareholders will be offered a
total of 2 404 016 261 new Buildmax shares at an issue price of 12.5
cents each in the ratio of 2.31 new Buildmax shares for every
ordinary share held by them on the record date for participation in
the rights offer.
FINANCIAL EFFECTS OF THE RIGHTS OFFER
The financial effects of the rights offer are set out below.
The table below sets out the pro forma financial effects of the
rights offer based on Buildmax's audited results for the year ended
28 February 2010. These pro forma financial effects are the
responsibility of the directors of Buildmax and they have been
prepared for illustrative purposes only, in order to provide
information about the financial position and results of Buildmax
assuming that the rights offer had been implemented on 28 February
2010 for purposes of the statement of financial position and 1 March
2009 for purposes of the statement of comprehensive income.
The pro forma consolidated statement of comprehensive income figures
illustrate the possible financial effects if the rights offer had
taken place on 1 March 2009, whilst the pro forma consolidated
statement of financial position figures have been based on the
assumption that the rights offer had taken place on 28 February
2010.
Due to its nature, the pro forma financial information
(collectively, the pro forma financial effects, pro forma
consolidated statement of comprehensive income and pro forma
consolidated statement of financial position) may not give a fair
reflection of Buildmax's financial position, changes in equity,
results of operations and cash flows subsequent to the rights offer.
The pro forma financial information has been prepared in accordance
with the accounting policies of the Buildmax group that were used in
the preparation of the audited consolidated financial results for
the year ended 28 February 2010.
The table below reflects the pro forma financial effects of the
rights offer on a Buildmax shareholder:
Before the After the Percentage
rights rights change (%)
offer offer
Headline loss per share (cents) (5.9) (1.4) 76.3
Core headline loss per share (4.4) (1.0) 77.3
(cents)
Basic loss per share (cents) (96.8) (28.9) 70.1
Net asset value per share (cents) 60.5 26.9 (55.5)
Net tangible asset value per 30.0 17.7 (41.0)
share (cents)
Weighted average number of shares 1 040 700 3 444 716 231.0
in issue (`000)
Total number of shares in issue 1 040 700 3 444 716 231.0
(`000)
Notes and assumptions:
The figures set out in the "Before the rights offer" column above
have been extracted, without adjustment, from the published audited
consolidated financial results of Buildmax for the year ended 28
February 2010.
The rights offer is assumed to have been implemented on 1 March 2009
for headline loss, core headline loss and basic loss per share
purposes and on 28 February 2010 for net asset value and tangible
net asset value per share purposes.
2 404 016 261 rights offer shares are assumed to be issued pursuant
to the rights offer, thereby raising capital of R300.5 million.
The net proceeds of the rights offer (after deduction of estimated
costs of R7.0 million) have been assumed to be used to repay bank
overdrafts of R31.7 million, R50 million of interest-bearing
liabilities, a vendor loan of R(43.5) million (R 47 million less a
discount of R3.5 million) and to provide working capital to the
group.
Interest paid has been reduced as a result of the repayment of bank
overdrafts of R31.7 million, R47 million of the vendor loan and R50
million of interest-bearing liabilities. In calculating the interest
saving Buildmax has assumed an average cost of debt, of 11.21%, in
respect of the bank overdrafts, and 9.5% in respect of interest
bearing debt, applied throughout the year. It has been assumed that
no interest is earned on the balance of the proceeds applied to
working capital.
An additional taxation expense results from the saving in interest
paid on the bank overdrafts, the vendor loan and interest-bearing
liabilities, detailed in assumption 5 above and the receipt of the
discount in respect of the vendor loan payable, detailed in
assumption 4 above.
All adjustments have a continuing effect.
An announcement detailing the salient dates of the rights offer will
be released on SENS and published in the press in due course.
WITHDRAWAL OF CAUTIONARY
Shareholders are advised that caution is no longer required to be
exercised when dealing in their Buildmax shares.
30 August 2010
Corporate advisor, legal advisor and sponsor to Buildmax
Java Capital
Financial advisor to Buildmax
Macquarie First South Advisers (Proprietary) Limited
Independent advisor to Buildmax
PKF Corporate Finance (Proprietary) Limited
Corporate advisor to Brait
QuestCo (Proprietary) Limited
Legal advisor to Brait
Read Hope Phillips Attorneys
Independent Technical and Economic Advisor
Venmyn Rand (Proprietary) Limited
Date: 30/08/2010 17:46:01 Produced by the JSE SENS Department.
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