TIDMSAC
RNS Number : 8913N
SacOil Holdings Limited
12 September 2013
SACOIL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE share code: SCL AIM share code: SAC
ISIN: ZAE000127460
("SacOil" or the "Company")
Conversion of the Gairloch debt to equity
Capital raising of up to R570 million by way of a renounceable
rights offer
Further shareholder update and cautionary announcement
1. Introduction
SacOil, the African independent upstream oil and gas company, is
pleased to announce that it has concluded an agreement dated 12
September 2013 (the "Gairloch Agreement") with Gairloch Limited
("Gairloch") for the conversion of circa US$24.1 million (circa
R238.5 million) of debt and accrued interest provided by Gairloch
to equity in SacOilby no later than 31 January 2014 (the "Specific
Issue"). To the extent that the maximum number of shares is issued
in terms of the Specific Issue, SacOil shall be largely debt-free,
thereby reducing financing costs and significantly improving its
balance sheet position.
Furthermore, shareholders are advised that SacOil intends to
raise additional capital of up to R570 million by way of a
renounceable rights offer of 2,111,111,111 SacOil shares (the
"Rights Offer Shares") at an issue price of R0.27 per share (the
"Rights Offer"), which will be supported by one of the Company's
largest shareholders, the Public Investment Corporation (SOC)
Limited (the "PIC") to the extent of circa R329 million.
The Specific Issue and the Rights Offer (the "Transactions")
will result in a recapitalisation of the Company enabling it to
actively pursue and develop its oil and gas prospects. The
Transactions will be inter-conditional.
2. The Specific Issue
SacOil will issue a maximum of 883,449,144 new ordinary shares
of no par value (the "Specific Issue Shares") to Westglamry Limited
and Newdel Holdings Limited, nominees of Gairloch (collectively the
"Nominees"), at a price of R0.27 (circa US$0.0272876) per Share
(the "Specific Issue Price"), raising a maximum of R238.5 million
(circa US$24.1 million) which will be applied to the satisfaction
of SacOil's indebtedness to Gairloch. The Specific Issue Price
represents a discount of approximately 4.6% to the 30-day volume
weighted average traded price of the SacOil shares on the JSE
Limited ("JSE") prior to the suspension of trading of the shares on
the JSE and the AIM market ("AIM") of the London Stock Exchange
("LSE") on 31 May 2013.
To the extent that the maximum number of shares is issued in
terms of the Specific Issue, and assuming the issue of all the
Rights Offer Shares, the Nominees will hold an aggregate 22.38%
interest in SacOil. The Nominees are expected to be long-term
investors in the Company.
The Gairloch Agreement is subject to the fulfilment of the
following conditions precedent by no later than 31 January 2014, or
such later date as SacOil and Gairloch may agree to in writing:
a. the approval of the Specific Issue by SacOil's shareholders;
b. the approval of the issue of the requisite number of Specific
Issue Shares and Rights Offer Shares (collectively, the "Shares"),
to allow for the implementation of the Specific Issue and the
Rights Offer, by SacOil's shareholders;
c. the election by SacOil shareholders to subscribe for the
Company's Rights Offer Shares for an aggregate subscription
consideration of not less than R570 million or the election by the
PIC to subscribe for Rights Offer Shares for an aggregate
subscription consideration of not less than R329 million and the
Company shall have received such subscription consideration;
d. the approval by the JSE and the LSE for the admission of the
Shares to trade on the JSE and AlM, respectively;
e. all other regulatory consents and approvals (including,
without limitation, the approvals of the Financial Surveillance
Department of the South African Reserve Bank) required for the
implementation of the Specific Issue;
f. the Company shall have issued Rights Offer Shares to all
SacOil shareholders that have elected to subscribe for Rights Offer
Shares; and
g. the Company shall have delivered to Gairloch a copy of an
ordinary resolution of SacOil shareholders approving the
appointment of Gairloch's nominated directors.
3. The Rights Offer
The purpose of the Rights Offer is to raise additional capital
in the amount of R570 million to recapitalise the Company, thereby
enabling it to actively pursue and develop its oil and gas
prospects. Pursuant to the Rights Offer, shareholders will be
offered the opportunity to subscribe for Rights Offer Shares pro
rata to their existing holdings at a cash issue price of R0.27 per
share (the "Rights Offer Price"), being a discount of approximately
4.6% to the 30-day volume weighted average traded price of the
SacOil shares on the JSE prior to the suspension of trading of the
shares on the JSE and AIM on 31 May 2013 and equivalent to the
Specific Issue Price. Shareholders will be invited to apply for
excess applications, which excess, to the extent available, will be
allocated to applicants in an equitable manner by the directors of
SacOil in accordance with the provisions of the JSE Listings
Requirements.
SacOil has received an undertaking from the PIC, a 16.64%
Shareholder in SacOil, dated 14 August 2013, in which it has
irrevocably agreed to support the Rights Offer to the extent of
R329,211,713 (the "PIC Undertaking"). In the event that the PIC
achieves a shareholding of 35% or more in SacOil post
implementation of the Transactions, as a result of it fulfilling
its obligations in terms of the PIC Undertaking, a mandatory offer
to all shareholders is required in terms of section 123(3) of the
Companies Act, No. 71 of 2008 (the "Companies Act") (the "Mandatory
Offer"), which is classified as an affected transaction in terms of
section 117 of the Companies Act. The Company intends, in terms of
regulation 86(4) of the Companies Regulations, 2011, to propose to
shareholders a resolution (the "Whitewash Resolution") for the PIC
to be exempt from the obligation to make the Mandatory Offer. The
PIC shall be excluded from voting on the Whitewash Resolution,
which requires the approval of more than 50% of the general voting
rights of all issued securities of the Company.
The implementation of the Rights Offer is subject to the
fulfilment of the following conditions:
a. the approval of the issue of the Specific Issue Shares and
Rights Offer Shares in terms of section 41(3) of the Companies Act,
as the voting rights of the Shares to be issued as a result of the
Transactions will exceed 30% of the voting rights of all the shares
held by SacOil shareholders immediately prior to the implementation
of the Transactions;
b. the approval of the Whitewash Resolution by SacOil's shareholders, other than the PIC;
c. the approval by the JSE and LSE for the admission of the
Shares for trading on the JSE and AIM respectively;
d. all other regulatory consents and approvals (including,
without limitation, the approvals of the Financial Surveillance
Department of the South African Reserve Bank and the Takeover
Regulation Panel) required for the implementation of the Rights
Issue;
e. the approval of the Rights Offer circular by the South African Reserve Bank; and
f. the approval by the JSE of the Rights Offer and all documents ancillary thereto.
4. Documentation and indicative timing
The Specific Issue is classified as a specific issue of shares
for cash in terms of the JSE Listings Requirements and, as such,
requires the approval of SacOil's shareholders (the "Specific Issue
Resolution"). In addition, in terms of section 41(3) of the
Companies Act, as SacOil will be issuing shares with voting power
exceeding 30% of the voting power of all the Company's shares
immediately prior to both the Specific Issue and the Rights Offer,
an approval by way of a special resolution is required from the
SacOil shareholders (the "Companies Act Resolution").
A circular providing the details of the Specific Issue and the
Rights Offer, incorporating a Notice of General Meeting proposing,
inter alia, the Specific Issue Resolution, the Companies Act
Resolution and the Whitewash Resolution (the "General Meeting
Circular") will be issued as soon as practicable, but in any event
no later than 60 days following this announcement.
5. Board Sub-Committees
Shareholders are referred to the announcements published on SENS
on 31 May 2013, 10 June 2013 and 12 July 2013 regarding the
appointment of new non-executive directors to the SacOil board
("Board"). SacOil is pleased to announce the establishment of
various Board sub-committees with effect from 24 July 2014, which
committees are constituted in accordance with the JSE Listings
Requirements, the Companies Act and the King Code of Governance for
South Africa 2009. Shareholders are advised of the nature and
composition of the Boardsub-committees:
Committee Chairman Members
Audit Committee Stephanus Muller Ignatius Sehoole, Mzuvukile
Maqetuka
------------------- -------------------------------
Nominations Committee Tito Mboweni Stephanus Muller, Mzuvukile
Maqetuka, Gontse Moseneke
------------------- -------------------------------
Remuneration Committee Mzuvukile Maqetuka Tito Mboweni, Vusi Pikoli
------------------- -------------------------------
Social Ethics and Vusi Pikoli Gontse Moseneke, Mzuvukile
Risk Committee Maqetuka, Ignatius Sehoole
------------------- -------------------------------
Investment Committee Ignatius Sehoole Gontse Moseneke, Stephanus
Muller
------------------- -------------------------------
Technical Advisory To be appointed Ignatius Sehoole, other member
Committee still to be appointed
------------------- -------------------------------
6. Release of Annual Financial Statements
In terms of paragraph 3.16 of the JSE Listings Requirements, the
Company is required to distribute its annual financial statements
or publish and distribute provisional annual financial statements
within 3 months of its financial year-end.
Due to the Board resignations announced on 31 May 2013, the
Company no longer had a duly constituted audit committee to
consider and recommend for approval, by the Board, the financial
results for the year ended 28 February 2013. In addition, as
announced on 29 May 2013, shareholders were advised as to the
auditorsexpressing material uncertainty regarding SacOil's going
concern due to the inability to settle the Gairloch debt and secure
funding for future development of the Company and its projects.
Given the appointment of five new non-executive directors to the
Board and the appropriate constitution of the audit committee, as
well as the proposed recapitalisation of the Company through the
implementation of the proposed Transactions, the Company is
expected to release the audited financial results for the year
ended 28 February 2013 on SENS on or about Monday, 16 September
2013. These results will also be available on the Company's
website. The Company is expected to publish the financial results
in the press on or about Tuesday, 17 September 2013 and post the
financial statements on or about Monday, 23 September 2013.
7. Update on the Suspension and Cautionary Announcement
Shareholders are referred to the announcement dated 31 May 2013
relating to application for the trading of the Company's shares on
AIM and the JSE to be suspended pending further appointments to the
Board (the "Suspension"). In this regard, as evidenced in this
announcement, the Company has made significant progress to enable
both the JSE and AIM to consider lifting the Suspension, which is
expected to be lifted once the audited financial results for the
year ended 28 February 2013 have been posted to shareholders, on or
around 23 September 2013. Shareholders will be timeously informed
of developments in this regard.
As the pro forma financial effects of the Specific Issue and the
Rights Offer have not been published, and as and when the
Suspension is lifted, shareholders are advised to exercise caution
when dealing in the Company's shares.
12 September 2013
ENDS
Investment Bank, Corporate Advisor and JSE Sponsor
Nedbank Capital, a division of Nedbank Limited
Legal Advisor
Norton Rose Fulbright South Africa
Nominated Adviser and Broker
finnCap Limited
For further information please contact:
SacOil Holdings Limited
Roger Rees/ Tariro Mudzimuirema +27 (0)11 575 7232
Nedbank Capital, a division of Nedbank
Limited (Investment Bank, Corporate Advisor
and Sponsor) +27 (0) 11 294 3524
Michelle Benade
finnCap Limited (Nominated Adviser and
Broker) +44 (0) 20 7220 0500
Matthew Robinson / Christopher Raggett
FirstEnergy Capital (Joint Broker UK)
Majid Shafiq
Travis Inlow +44 (0) 20 7448 0200
GMP Securities Europe LLP (Joint Broker
UK)
Rob Collins
James Pope +44 (0) 20 7647 2800
Pelham Bell Pottinger (UK)
Philip Dennis +44 (0) 20 7861 3919
Nick Lambert +44 (0) 20 7861 3936
Rollo Crichton-Stuart +44 (0) 20 7861 3918
This information is provided by RNS
The company news service from the London Stock Exchange
END
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