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AFRICAN RAINBOW CAPITAL INVESTMENTS LIMITED - Declaration Announcement And Terms Of The Fully Committed And Underwritten Pro Rata Non-Renounceable Rights Offer

Release Date: 15/09/2020 07:31
Code(s): AIL     PDF:  
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Declaration Announcement And Terms Of The Fully Committed And Underwritten Pro Rata Non-Renounceable Rights Offer

African Rainbow Capital Investments Limited
(Incorporated in the Republic of Mauritius)
(Company number: C148430)
JSE and A2X code: AIL ISIN: MU0553S00000
(“ARC Investments” or “the Company”)

DECLARATION ANNOUNCEMENT AND TERMS OF THE FULLY COMMITTED AND
UNDERWRITTEN PRO RATA NON-RENOUNCEABLE RIGHTS OFFER


  NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
  AUSTRALIA, CANADA, HONG KONG, JAPAN AND ANY OTHER TERRITORY WHERE THE EXTENSION OR MAKING OF
  THE RIGHTS OFFER WOULD BE UNLAWFUL OR IN CONTRAVENTION OF CERTAIN LAWS OR REGULATIONS. THIS
  ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE UNITED STATES OR ANY
  OTHER JURISDICATION

1. INTRODUCTION
  ARC Investments is pleased to advise shareholders that the board of directors of ARC Investments
  (“the Board”) has resolved to undertake a fully committed and underwritten pro rata non-renounceable
  rights offer of ZAR750 million (“Rights Offer”). Under the Rights Offer, qualifying shareholders will
  receive 26.09711 rights offer shares for every 100 existing ARC Investments ordinary shares (“Ordinary
  Shares”) held on the record date of the Rights Offer.


2. RATIONALE FOR THE RIGHTS OFFER
  The purpose of the Rights Offer is to raise additional capital for ARC Investments to invest in the ARC
  Fund (the South African partnership in which it is a limited partner), for use in the ARC Fund's existing
  portfolio companies as well as for future acquisition opportunities, and for purposes of settling the
  outstanding fund management fee, details of which will be set out in the circular referred to in paragraph
  8 below.
  The ARC Fund will continue to invest in terms of its investment strategy and mandate, focusing on the
  following:

      .   To assist successful investee companies to leverage their current situation, similar to the
          recent opportunity when additional capital and funding enabled Rain Group Holdings (Pty) Ltd
          to fast-track its development, as well as the various ARCH Emerging Market Funds, in which
          ARC Fund is an investor, that are gaining traction, and if opportune, increase its interest in
          such companies and existing investments;
      .   Continue to fund its proportional (49.9%) share of the funding required by African Rainbow
          Capital Financial Services Holdings (Pty) Ltd to expand its financial services portfolio. The
          most significant investment in the short term will be the 25% acquisition of Sanlam Limited’s
          third-party asset management businesses which has recently been announced; and
      .   Entirely new investment opportunities.

  The additional capital, after expenses of the Rights Offer of approximately ZAR3.5 million, is expected
  to be sufficient to meet the medium-term funding requirements of the ARC Fund, considering that a
  number of the early life cycle companies are maturing and that the combined portfolio is expected to
  become more cash generative during the next twenty-four months. In addition, the ARC Fund as part
  of its investment strategy will take advantage of opportunities to monetise some of its investments
  through partial or total disposal.
3. SALIENT TERMS OF THE RIGHTS OFFER
     3.1.   ARC Investments proposes to raise ZAR750 million through an offer of 272 727 273 Ordinary
            Shares (“Rights Offer Shares”) at a price of ZAR2.75 per Rights Offer Share (“Rights Offer Price”)
            in the ratio of 26.09711 Rights Offer Shares for every 100 existing Ordinary Shares held on the
            record date for the Rights Offer, being Friday, 25 September 2020.
     3.2.   The Rights Offer Price represents a 5.4% discount to the 30 day volume weighted average price
            of the Ordinary Shares as at Thursday, 3 September 2020, being the last practicable date.
     3.3.   Application will be made to the JSE and A2X for the listing on the securities exchanges operated
            by the JSE and A2X of the Rights Offer Shares which will be listed with effect from the
            commencement of business on Monday, 5 October 2020.
     3.4.   The Rights Offer Shares will, upon issue and allotment, rank pari passu with all other Ordinary
            Shares in ARC Investments.
     3.5.   Excess applications will not be allowed.
     3.6.   The Rights Offer is not conditional on any minimum subscription being obtained.
     3.7.   The Rights Offer is non-renounceable and will only be open to Shareholders registered as such
            at the record date. This means that qualifying shareholders will not be able to renounce their
            entitlement to receive Rights Offer Shares in favour of any other person/party, nor dispose of or
            trade in their letters of allocation.


4.   IRREVOCABLE SUBSCRIPTION UNDERTAKINGS AND UNDERWRITING
     4.1.   ARC Investments has obtained an irrevocable subscription commitment from African Rainbow
            Capital (Pty) Ltd (“ARC”) in respect of all of the Ordinary Shares held by it at the last practicable
            date, being 533 846 624 Ordinary Shares, representing c. 51.1%of the issued Ordinary Shares.
            ARC has therefore irrevocably undertaken to follow all of the rights allocated to it in the Rights
            Offer and to subscribe and make payment of the aggregate price for the resultant number of
            Rights Offer Shares issued to it in the Rights Offer.
     4.2.   No commitment fees are payable.
     4.3.   The balance of the Rights Offer is fully underwritten by ARC. The directors have made due and
            careful enquiry to confirm that ARC is able to meet its commitments in terms of the Rights Offer.
     4.4.   No underwriting fees are payable.


5. ENTITLEMENT
     Only whole numbers of Rights Offer Shares will be issued to qualifying shareholders. The allocation of
     Rights Offer Shares will be such that qualifying shareholders will not be allocated a fraction of a Rights
     Offer Share and accordingly entitlements to Rights Offer Shares of 0.5 or greater will be rounded up
     and less than 0.5 will be rounded down to the nearest whole number.


6. FOREIGN SHAREHOLDERS
     Foreign shareholders may be affected by the Rights Offer, having regard to prevailing laws in their
     relevant jurisdictions. Such foreign shareholders should inform themselves with regard to and observe
     any applicable legal requirements of such jurisdiction in relation to all aspects of this announcement
     that may affect them, including the Rights Offer. It is the responsibility of each foreign shareholder to
     satisfy himself/herself as to the full observation of the laws and regulatory requirements of the relevant
     foreign jurisdiction in connection with the Rights Offer, including obtaining any governmental, exchange
     or other consents or the making of any filing which may be required, the compliance with any other
     necessary formalities and the payment of any issue, transfer or other taxes or other requisite payments
     due in such jurisdictions. Further, to the fullest extent permitted by applicable laws, ARC Investments
     disclaims any and all responsibility or liability for the violation of such requirements by any persons in
     any jurisdiction. The Rights Offer is governed by the laws of the Republic of South Africa and is subject
     to applicable laws and regulations, including exchange control regulations. Nothing in this declaration
     announcement or the Rights Offer circular referred to herein constitutes an offer to sell the letters of
     allocation or the Rights Offer Shares to any person in any jurisdiction where it is unlawful to do so, or a
     solicitation of an offer to buy the letters of allocation or the Rights Offer Shares from a person in a
     jurisdiction in which it is unlawful to make such solicitation.


7. SALIENT DATES AND TIMES


                                                                                                         Date
                                                                                                         2020
    Declaration announcement released on the Stock Exchange News                        Tuesday, 15 September
    Service (“SENS”) and the A2X News Service on

    Declaration Rights Offer announcement released on website of ARC                    Tuesday, 15 September
    Investments

    Declaration Rights Offer announcement notified to the Financial Services            Tuesday, 15 September
    Commission of Mauritius (“FSC”)

    Declaration Rights Offer announcement published in the press                     Wednesday, 16 September

    Finalisation announcement released by 11:00 (SAST) on SENS and the                 Thursday, 17 September
    A2X News Service on

    Finalisation Rights Offer announcement released on website of ARC                  Thursday, 17 September
    Investments

    Finalisation Rights Offer announcement notified to the FSC                            Friday, 18 September

    Finalisation Rights Offer announcement published in the press                         Friday, 18 September

    Circular and form of instruction made available on ARC Investments’                 Monday, 21 September
    website

    Last day to trade in Ordinary Shares in order to qualify to participate in          Monday, 21 September
    the Rights Offer (cum rights)

    Shares trade “ex” the Rights Offer                                                  Tuesday, 22 September
    (Nil paid letters of allocation will be listed and suspended from trading
    under the JSE and A2X code: AILN and ISIN: MU0553S00026)

    Circular and form of instruction distributed/posted to qualifying                     Friday, 25 September
    certificated shareholders on (to the extent applicable)

    Record date for the Rights Offer, at the close of business on                         Friday, 25 September

    Rights Offer opens at 09:00 (SAST) on                                               Monday, 28 September

    Circular and form of instruction emailed/posted to qualifying                       Monday, 28 September
    dematerialised shareholders
    CSDP or broker accounts of qualifying dematerialised shareholders                   Monday, 28 September
    credited with letters of allocation at 09:00 (SAST) on

    In respect of qualifying certificated shareholders, letters of allocation           Monday, 28 September
    credited to an electronic account held with the transfer secretaries at
    09:00 (SAST) on

    Earliest date for last day to trade in respect of the take-up (no trading           Tuesday, 29 September
    permitted, for processing purposes only)

    Record date for take-up. Rights Offer closes. Payment to be made by                       Friday, 2 October
    certificated shareholders

    Listing and issue of Rights Offer Shares on the JSE and A2X                             Monday, 5 October
    commences at 09:00 (SAST) on

    Payment to be made by dematerialised shareholders. In respect of
    qualifying dematerialised shareholders who exercise their Rights, CSDP
    or broker accounts debited with the aggregate Rights Offer Price and
    updated with Rights Offer Shares at 09:00 (South African standard time)
    on
   In respect of qualifying certificated shareholders who exercise their
   rights, share certificates posted by registered post on or about

   Results of the Rights Offer announced on SENS and the A2X News
   Service on

   Notification to the FSC of the results of the Rights Offer                                               Tuesday, 6 October

  Notes:
  (1) CSDPs effect payment on a delivery versus payment basis in respect of the Rights Offer Shares.
  (2) All of the above salient dates and times have been determined based on certain assumptions in relation to the
  Rights Offer and are subject to change. Shareholders will be notified of any amendments to these salient dates and
  times on SENS and the A2X News Service.
  (3) ARC Investments shall inform the FSC of the results of the Rights Offer by no later than Tuesday, 6 October 2020,
  in accordance with applicable Mauritian law.
  (4) Share certificates may not be dematerialised or rematerialised between Tuesday, 22 September 2020 and
  Friday, 25 September 2020, both days inclusive.



8. RIGHTS OFFER CIRCULAR
  Further details of the Rights Offer will be disclosed in the Rights Offer circular, which will be available
  on the Company’s website, (http://www.arci.mu), from Monday, 21 September 2020, and will be
  distributed to qualifying certificated shareholders on Friday, 25 September 2020 and to qualifying
  dematerialised shareholders on Monday, 28 September 2020.


  Ebène, Mauritius (with simultaneous circulation in Johannesburg)


  15 September 2020


  Transaction Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited
  Corporate Advisor: Deloitte Capital Proprietary Limited
  Legal Adviser as to South African law: Webber Wentzel
  Legal Adviser as to Mauritian law: BLC Robert & Associates


  Important Notice
  The information contained herein is not for release, publication or distribution, directly or indirectly, in or
  into the United States, its territories or possessions, Canada, Australia, Japan, Hong Kong or any other
  jurisdiction in which the distribution or release would be unlawful. These materials are not and do not
  contain an offer of securities for sale or a solicitation of an offer to purchase or subscribe for securities
  in any jurisdiction, including the United States, Australia, Canada, Japan, Hong Kong or any other state
  or jurisdiction in which such release, publication or distribution would be unlawful. The securities to
  which these materials relate (the “Securities”) have not been, and will not be, registered under the U.S.
  Securities Act of 1933 (the “Securities Act”), and may not be offered, sold, taken up, exercised, resold,
  renounced, transferred or delivered, directly or indirectly, within the United States unless registered
  under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration
  under the Securities Act. There will be no public offer of the Securities in the United States. Subject to
  certain exceptions, the Securities may not be offered or sold in Australia, Canada, Japan, Hong Kong
  or any other jurisdiction in which it would be unlawful to do so or to, or for the account or benefit of, any
  national, resident or citizen of such countries.
  This announcement is only being distributed to and is only directed at: (i) persons who are outside the
  United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and
  Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); or (iii) high net worth
  entities falling within Article 49(2)(a) to (d) of the Order; or (iv) persons to whom it may otherwise lawfully
  be communicated (all such persons together being referred to as “Relevant Persons”). The Rights Offer
  shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise
  acquire such Rights Offer shares will be engaged in only with, Relevant Persons. Any person who is
  not a Relevant Person should not act or rely on this announcement or any of its contents.
  In any member state of the European Economic Area (other than the United Kingdom) that has
  implemented Regulation (EU) 2017/1129 (the “Prospectus Regulation”), this announcement is only
  addressed to and is only directed at qualified investors in that member state within the meaning of the
  Prospectus Regulation.

Date: 15-09-2020 07:31:00
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