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AVENG LIMITED - Declaration announcement in respect of the Aveng follow-on rights offer
2021/05/11 16:47:00Download PDF Stock report
Declaration announcement in respect of the Aveng follow-on rights offer
AVENG LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
('Aveng' or 'the Company')
DECLARATION ANNOUNCEMENT IN RESPECT OF THE AVENG FOLLOW-ON RIGHTS OFFER
Shareholders are referred to the SENS announcement issued by the Company on Tuesday, 23 March 2021 in
terms of which Shareholders were advised that Aveng intends to raise an amount of ZAR100 000 000 by way
of a fully co-underwritten renounceable follow-on rights offer ('Follow-on Rights Offer').
Shareholders are hereby advised that Aveng intends to launch the Follow-on Rights Offer of up to 6 666 666
668 ordinary no par value shares in Aveng ('Aveng Ordinary Shares') and class A shares ('Aveng Class A
Shares'), as contemplated in the Follow-on Rights Offer circular ('Follow-on Rights Offer Shares'). The
Follow-on Rights Offer will be made to qualifying shareholders at a subscription price of 1.5 cents per Follow-
on Rights Offer Share ('Follow-on Rights Offer Price'), in the ratio of 11.47941 Follow-on Rights Offer
Shares for every 100 Aveng Ordinary Shares and/or Aveng Class A Shares held on the Follow-on Rights
Offer record date ('Ratio of Entitlement'), which is anticipated to be on or about Friday, 21 May 2021
('Record Date').
RATIONALE FOR THE RIGHTS OFFER
On Friday, 19 March 2021, Aveng completed an initial ZAR300 million, fully co-underwritten renounceable
rights offer ('Initial Rights Offer') and its debt restructure transaction, as contemplated in the
abovementioned SENS announcement dated Tuesday, 23 March 2021.
Shareholders demonstrated a much higher than anticipated interest in the Initial Rights Offer resulting in the
raising of ZAR392 million of new capital, with shareholders subscribing for ZAR278 million worth of shares
and the underwriters subscribing for their minimum required subscriptions.
Following the greater than anticipated interest in the Initial Rights Offer, certain existing shareholders have
indicated their willingness to provide further capital to support the Company. This additional capital was not
anticipated at the time of the Initial Rights Offer, whereby only limited capital was available, in an uncertain
market, with limited appetite. Accordingly, the Company has elected to launch the Follow-on Rights Offer to
realise the additional capital which the Company's shareholders are willing to provide in order to provide the
Company with the opportunity to further solidify its balance sheet and provide the capital to accelerate its
business plan and explore identified growth opportunities which will provide attractive returns, mainly in the
Moolmans business.
SALIENT TERMS OF THE FOLLOW-ON RIGHTS OFFER
In terms of the Follow-on Rights Offer, the Follow-on Rights Offer Shares will be issued to Aveng
shareholders recorded in Aveng's share register at the close of business on the Record Date, at the Follow-on
Rights Offer Price in the Ratio of Entitlement. Aveng will raise an amount of ZAR100 000 000 in terms of the
Follow-on Rights Offer. It is noted that the Follow-on Rights Offer Price is the same as the price initially
offered to shareholders in terms of the Initial Rights Offer.
The Follow-on Rights Offer Price represents a discount of 55.7% to the 30-day volume weighted average
traded price of Aveng's ordinary shares of 3.17 cents as at 23 March 2021 being the date on which the Rights
Offer was announced.
Excess applications for Follow-on Rights Offer Shares will not be allowed and any Follow-on Rights Offer
Shares that are not accepted, renounced or sold shall revert to the underwriters. The Follow-on Rights Offer is
not conditional on the underwriters receiving a minimum issue to them.
The Follow-on Rights Offer Shares issued will rank pari passu with the existing issued shares of Aveng, save
in respect of the Aveng Class A Shares which will not carry any voting rights save for voting rights on matters
affecting that class of shares.
IRREVOCABLE COMMITMENT AND UNDERWRITING
Highbridge Tactical Credit Master Fund, L.P., Highbridge SCF Special Situations SPV, L.P. (collectively
'Highbridge Funds'), Whitebox Multi Strategy Partners L.P. and Whitebox GT Fund L.P. (collectively,
'Whitebox Funds') and Steyn Capital Management Proprietary Limited (and its affiliated funds) ('Steyn
Capital' and with the Highbridge Funds and the Whitebox Funds, 'the Underwriters') will co-underwrite the
Follow-on Rights Offer. The Highbridge Funds currently hold 20.90%, the Whitebox Funds hold 14.50%, and
Steyn Capital holds 5.25%, of the issued share capital of Aveng.
The Underwriters have provided Aveng with an irrevocable commitment to follow their rights in terms of the
Follow-on Rights Offer and to subscribe for all of the Aveng Ordinary Shares and/or Aveng Class A Shares to
which they are entitled under the Follow-on Rights Offer. The balance of the Rights Offer (representing 59.35%
of the Follow-on Rights Offer Shares) will be underwritten by the Underwriters. The Underwriters will not be
charging a commitment or underwriting fee.
SALIENT DATES AND TIMES
2021
Finalisation announcement released on SENS (before 11:00), on Thursday, 13 May
Circular to be published on Aveng website Monday, 17 May
Last day to trade in shares in order to participate in the Follow-on Tuesday, 18 May
Rights Offer (cum entitlement)
Shares commence trading ex-entitlement at 09:00 on Wednesday, 19 May
Listing of and trading in the letters of allocation under code AEGN and Wednesday, 19 May
ISIN ZAE 000298147 on the JSE commences at 09:00 on
Circular and a form of instruction, where applicable, posted to qualifying
certificated shareholders on Thursday, 20 May
Record Date at 17:00 on Friday, 21 May
Follow-on Rights Offer opens at 09:00 on Monday, 24 May
In respect of qualifying certificated shareholders, letters of allocation
credited to an electronic account held with the transfer secretaries at Monday, 24 May
09:00 on
Circular emailed to qualifying dematerialised shareholders Monday, 24 May
In respect of qualifying dematerialised shareholders, CSDP or broker
accounts credited with letter of allocation at 09:00 on Monday, 24 May
Last day to lodge Form of Instruction with the transfer secretaries in
respect of qualifying certificated shareholders (or their renouncees)
wishing to sell all or some of their letters of allocation by (12:00) on Tuesday, 1 June
Last day to trade letters of allocation on the JSE Tuesday, 1 June
Listing of Follow-on Rights Offer Shares and trading therein on the JSE Wednesday, 2 June
commences at 09:00 on
Follow-on Rights Offer closes at 12:00 on Friday, 4 June
Payment to be made and form of instruction to be lodged with the Friday, 4 June
transfer secretaries by qualifying certificated shareholders wishing to
renounce or subscribe for all or part of their entitlement at 12:00 on
Record date for letters of allocation on Friday, 4 June
Follow-on Rights Offer Shares issued on Monday, 7 June
In respect of qualifying dematerialised shareholders (or their
renouncees), CSDP or broker accounts debited with the aggregate
Follow-on Rights Offer Price and updated with Follow-on Rights Offer
Shares at 09:00 on Monday, 7 June
In respect of qualifying certificated shareholders (or their renouncees),
share certificates in respect of Follow-on Rights Offer Shares posted on Monday, 7 June
or about
Results of the Follow-on Rights Offer announced on SENS on Monday, 7 June
Notes:
1. If you are a qualifying dematerialised shareholder you are required to notify your duly appointed CSDP or broker of your
acceptance of the Follow-on Rights Offer in the manner and time stipulated in the agreement governing the relationship between
yourself and your CSDP or broker.
2. CSDPs effect payment on a delivery versus payment method in respect of qualifying dematerialised shareholders.
3. Shareholders may not dematerialise or rematerialise their Aveng Ordinary Shares between Wednesday, 19 May 2021, and
Friday, 21 May 2021, both dates inclusive.
4. All times are South African times.
5. Share certificates will be posted by registered post at the risk of the qualifying certificated shareholders (or their renouncees).
TAXATION
Shareholders are advised to consult their tax and financial advisors regarding any taxation implications
pertaining to them regarding the acceptance of their rights in terms of the Follow-on Rights Offer.
FRACTIONAL ENTITLEMENT
The number of rights to subscribe for Follow-on Rights Offer Shares to which qualifying shareholders will
become entitled will be determined by the Ratio of Entitlement. Only whole numbers of Follow-on Rights Offer
Shares will be issued and shareholders will be entitled to subscribe for rounded numbers of Follow-on Rights
Offer Shares once the Ratio of Entitlement has been applied. Fractional entitlements of 0.5 or greater will be
rounded up and less than 0.5 will be rounded down.
FOREIGN SHAREHOLDERS
Any shareholder resident outside the common monetary area who receives the Follow-on Rights Offer circular
and form of instruction, should obtain advice as to whether any governmental and/or any other legal consent
is required and/or any other formality must be observed to enable such a subscription to be made in terms of
such form of instruction.
The Follow-on Rights Offer does not constitute an offer in any jurisdiction in which it is illegal to make such an
offer ('Restricted Territories') and the Rights Offer circular and form of instruction should not be forwarded
or transmitted by recipients thereof to any person in any territory other than where it is lawful to make such an
offer.
United States of America
The letters of allocation and the Follow-on Rights Offer Shares have not been and will not be registered under
the Securities Act, 1933 ('US Securities Act') or under securities laws of any Restricted Territory and may
not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly,
within the United States of America, except in respect of Qualified Institutional Buyers as contemplated under
the US Securities Act ('QIB') pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act and in compliance with any applicable securities laws of any state or
other jurisdiction of the United States of America. Investors who are located in the United States of America
will be required to execute and deliver a QIB investor letter ('QIB Letter'), a copy of which is available from
shareholders' CSDPs, prior to taking up or transferring rights in the Follow-on Rights Offer or acquiring Follow-
on Rights Offer Shares in the Follow-on Rights Offer.
Shareholders who are required to submit a QIB Letter must do so by emailing same to
edinah.mandizha@aveng.co.za on or before 12:00 on Friday, 4 June 2021.
Accordingly, the Company is not extending the Follow-on Rights Offer into the United States of America
unless an exemption from the registration of the US Securities Act is available, and subject to certain
exceptions, the Follow-on Rights Offer circular neither constitutes nor will it constitute an offer or invitation to
apply for, or an offer or an invitation to acquire, any letters of allocation or Follow-on Rights Offer Shares in
the United States of America.
Subject to certain exceptions, the Follow-on Rights Offer circular will not be sent to any foreign Aveng
shareholder in, or with a registered address in, the United States of America. Subject to certain exceptions,
any person who acquires letters of allocation or the Follow-on Rights Offer Shares will be deemed to have
declared, warranted and agreed, by accepting delivery of the Follow-on Rights Offer circular, taking up their
rights or accepting delivery of the letters of allocation or the Follow-on Rights Offer Shares, that it is not, and
that at the time of acquiring the letters of allocation or the Follow-on Rights Offer Shares it will not be, in the
United States of America or acting on behalf of, or for the account or benefit of, a person on a non-
discretionary basis in the United States of America or any state of the United States of America.
In addition, until 40 days after the commencement of the Follow-on Rights Offer, an offer, sale or transfer of
the Follow-on Rights Offer Shares or the letters of allocation within the United States of America by a dealer
(whether or not participating in the Follow-on Rights Offer) may violate the registration requirements of the US
Securities Act. Subject to certain exceptions, Aveng shareholders with a registered address in the United
States of America will be treated as non-exercising holders and Aveng expects that the applicable rights will
be sold by the transfer secretaries on behalf of such Aveng shareholders. The cash proceeds therefrom will
be distributed to such Aveng shareholders (net of applicable fees, expenses, taxes and charges), in
proportion to such Aveng shareholder’s right to the Follow-on Rights Offer Shares.
There can be no assurances as to what price such Aveng shareholders will receive for such disposal or the
timing or exchange rate conversion of such receipt, to the extent applicable.
Although letters of allocation may be credited to the CSDP or broker accounts of qualifying dematerialised
Aveng shareholders:
- with a registered address, or resident, in one of the Restricted Territories;
- in the United States of America; or
- with a registered address, or who hold on behalf of persons located in the United States of America,
or who hold on behalf of any person on a non-discretionary basis who is in the United States of
America or any state of the United States of America, such crediting of letters of allocation does not
constitute an offer to restricted Aveng shareholders and such restricted Aveng shareholders will not
be entitled to take up or transfer rights in the Follow-on Rights Offer or acquire Follow-on Rights Offer
Shares in the Follow-on Rights Offer unless such action would not result in the contravention of any
registration or other legal requirement in any jurisdiction.
Restricted Territories
Subject to certain exceptions, the letters of allocation and the Follow-on Rights Offer Shares may not be
transferred or sold to, or renounced or delivered in, the Restricted Territories.
No offer of Follow-on Rights Offer Shares is being made by virtue of the Follow-on Rights Offer circular into
the Restricted Territories.
No person may forward or otherwise transmit the Follow-on Rights Offer circular to any territory other than
where it is lawful to make the Follow-on Rights Offer contemplated in the Follow-on Rights Offer circular.
Although letters of allocation may be credited to the CSDP or broker accounts of qualifying dematerialised
Aveng Shareholders:
- with a registered address, or resident, in one of the Restricted Territories;
- in the United States of America; or
- with a registered address, or who hold on behalf of persons located in the United States of America,
or who hold on behalf of any person on a non-discretionary basis who is in the United States of
America, or any state of the United States of America, such crediting of letters of allocation does not
constitute an offer to restricted Shareholders and restricted Shareholders will not be entitled to take
up or transfer rights in the Follow-on Rights Offer or acquire Follow-on Rights Offer Shares in the
Follow-on Rights Offer unless such action would not result in the contravention of any registration or
other legal requirement in any jurisdiction.
Subject to certain exceptions, Aveng shareholders with a registered address in the Restricted Territories will
be treated as non-exercising holders and Aveng expects that the applicable rights will be sold by the transfer
secretaries on behalf of such Aveng shareholders.
The cash proceeds therefrom will be distributed to such Aveng Shareholders (net of applicable fees,
expenses, taxes and charges) in proportion to such Aveng shareholder’s right to the Follow-on Rights Offer
Shares. There can be no assurances as to what price such Aveng shareholders will receive for such disposal
or the timing or exchange rate conversion of such receipt to the extent applicable.
Johannesburg
11 May 2021
JSE Sponsor: UBS South Africa Proprietary Limited
Transaction advisor: DG Capital Proprietary Limited
Legal advisor: Baker & McKenzie Incorporated
401630253-v3\EMEA_DMS 5
Date: 11-05-2021 04:47:00
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