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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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