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THE FOSCHINI GROUP LIMITED - Rights Offer Declaration Announcement

Release Date: 14/07/2020 14:30
Code(s): TFG     PDF:  
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Rights Offer Declaration Announcement

THE FOSCHINI GROUP LIMITED
Reg. No.: 1937/009504/06
Code: TFG
ISIN: ZAE000148466
(“TFG” and “Group”)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN. THIS ANNOUNCEMENT DOES NOT
CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN OR ANY OTHER JURISDICTION.

Rights Offer Declaration Announcement

1. Introduction

TFG shareholders are referred to the announcement released on the Stock
Exchange News Service (“SENS”) of the JSE Limited (“JSE”) on Thursday, 18 June
2020, wherein TFG announced its condensed consolidated financial results for
the year ended 31 March 2020 and notice of extraordinary general meeting
(“EGM”), with the intention to seek shareholder approval to implement a fully
underwritten, renounceable rights offer (“Rights Offer”).

2. Rationale

As announced on Thursday, 18 June 2020, TFG faces significant uncertainty and
risk in the economic, operating and trading environments of its core markets.
The board of directors and management of TFG believe it is prudent and
necessary to reduce TFG's financial indebtedness now by way of the Rights
Offer. This will allow TFG to strengthen its relative position and insulate the
balance sheet against potential future shocks while at the same time
positioning TFG for future growth and opportunities.

The proposed size of the Rights Offer has been informed by an extensive
scenario planning exercise and the intention is to use the net proceeds of the
Rights Offer to:
   -  reduce debt and insulate the balance sheet, ahead of what is expected to
      be a sustained period of economic uncertainty;
   -  pursue TFG’s organic growth strategy and further leverage TFG’s existing
      brands to gain market share;
   -  continue to invest in the retail platform and TFG’s digital
      transformation journey, particularly in the Group’s e-commerce offering;
      and
   -  ensure the Group has the ability to take advantage of market
      opportunities in line with its current strategy and which meet its
      investment criteria.

3. Terms of the Rights Offer

TFG is targeting gross proceeds of up to R3.95 billion through an offer of
renounceable rights to subscribe for new TFG ordinary shares (“Rights Offer
Shares”) to TFG shareholders (excluding TFG shareholders resident or located in
certain restricted jurisdictions to be set out in the Rights Offer Circular (as
defined below) recorded in the register on the record date for the Rights Offer
(“Qualifying Shareholders”), being Friday, 24 July 2020. The final terms of the
Rights Offer, including the Rights Offer price and ratio of entitlement, will
be announced on SENS by TFG on the finalisation date, expected to be on or
about Thursday, 16 July 2020.

Application will be made to the JSE for the listing on the securities exchange
of the JSE of:
   -  the letters of allocation in respect of the Rights Offer which will be
      listed from the commencement of business on Wednesday, 22 July 2020
      until the close of business on Tuesday, 4 August 2020, both days
      inclusive, under the JSE code TFGN and ISIN ZAE000288353; and
   -   the Rights Offer Shares which will be listed with effect from the
       commencement of business on Wednesday, 5 August 2020.

The Rights Offer Shares will, upon issue, rank pari passu with all other shares
of the same class.

4. Excess applications

Qualifying Shareholders will be permitted to apply for Rights Offer Shares not
taken up in excess of their pro rata entitlement in terms of the Rights Offer
(“Excess Shares”), should there be Excess Shares available for allocation.
Such Excess Shares will be allocated equitably, taking into consideration the
number of TFG ordinary shares held by the Qualifying Shareholder that applies
for Excess Shares prior to such allocation, including Rights Offer Shares taken
up as a result of the Rights Offer, and the number of Excess Shares applied for
by such Qualifying Shareholder.

5. Entitlement

The allocation of Rights Offer Shares will be such that Qualifying Shareholders
will not be allocated a fraction of a Rights Offer Share and only whole numbers
of Rights Offer Shares will be issued. Any entitlement to receive a fraction of
a Rights Offer Share will be:
   -  rounded down to the nearest whole number if less than half a Rights
      Offer Share; and
   -  rounded up to the nearest whole number if more than or equal to half of
      a Rights Offer Share.

6. Underwriting

It is intended that the Rights Offer Shares will be underwritten by Rand
Merchant Bank, a division of FirstRand Bank Limited, The Standard Bank of South
Africa Limited and Absa Bank Limited, subject to customary terms and
conditions.

7. Conditions precedent

The implementation of the Rights Offer is subject to the fulfilment of the
following conditions:
   -  the successful passing of the requisite Rights Offer resolutions at the
      EGM; and
   -  the JSE granting a listing of the letters of allocation and the Rights
      Offer Shares on the securities exchange of the JSE in respect of the
      Rights Offer.

8. 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 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. The Rights Offer is governed by the laws 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 of securities for sale in any
jurisdiction where it is unlawful to do so.
9. Salient dates and times

                                                                           2020
Declaration announcement released on SENS on                   Tuesday, 14 July
Finalisation announcement released by 11:00 (SAST) on         Thursday, 16 July
SENS on or about
Rights Offer Circular (as defined below) made available         Monday, 20 July
on TFG’s website, tfglimited.co.za, on
Rights Offer Circular and form of instruction                   Monday, 20 July
emailed/posted to qualifying certificated shareholders on
Last day to trade in TFG ordinary shares in order to           Tuesday, 21 July
qualify to participate in the Rights Offer (cum rights)
TFG ordinary shares commence trading ex-rights on the        Wednesday, 22 July
securities exchange of the JSE at 09:00 (SAST) on
Listing of and trading in the letters of allocation          Wednesday, 22 July
commences under JSE code TFGN and ISIN ZAE000288353 at
09:00 (SAST) on
Record date for the Rights Offer, at the close of               Friday, 24 July
business on
Rights Offer opens at 09:00 (SAST) on                           Monday, 27 July
In respect of qualifying certificated shareholders,             Monday, 27 July
letters of allocation credited to an electronic account
held with the transfer secretaries at 09:00 (SAST) on
Rights Offer Circular and form of instruction                   Monday, 27 July
emailed/posted to qualifying dematerialised shareholders
on
In respect of qualifying dematerialised shareholders,           Monday, 27 July
CSDP (as defined below) or broker accounts credited with
letters of allocation at 09:00 (SAST) on
Last day to trade in letters of allocation in order to        Tuesday, 4 August
participate in the Rights Offer on
In respect of qualifying certificated shareholders (or        Tuesday, 4 August
their renouncees) wanting to sell all or some of their
letters of allocation, form of instruction to be lodged
with the transfer secretaries by 12:00 (SAST) on
Listing of Rights Offer Shares on the securities exchange   Wednesday, 5 August
of the JSE commences at 09:00 (SAST) on
In respect of qualifying certificated shareholders (or         Friday, 7 August
their renouncees) wishing to exercise all or some of
their rights, payment to be made and form of instruction
to be lodged with the transfer secretaries by 12:00
(SAST) on
Rights Offer closes at 12:00 (SAST) on                         Friday, 7   August
Record date for letters of allocation on                       Friday, 7   August
Rights Offer Shares issued on                                Tuesday, 11   August
In respect of qualifying dematerialised shareholders (or     Tuesday, 11   August
their renouncees or purchasers of their letters of
allocation), CSDP or broker accounts debited with the
aggregate Rights Offer Price and updated with Rights
Offer Shares at 09:00 (SAST) on
In respect of qualifying certificated shareholders (or       Tuesday, 11 August
their renouncees or purchasers of their letters of
allocation), share certificates posted by registered post
on or about
Results of the Rights Offer announced on SENS on             Tuesday, 11 August
In respect of successful excess applications (if            Thursday, 13 August
applicable), Rights Offer Shares issued to qualifying
dematerialised shareholders and/or share certificates
posted to qualifying certificated shareholders on or
about
In respect of unsuccessful excess applications (if          Thursday, 13 August
applicable), refunds made to qualifying certificated
shareholders on or about
Notes:
1. Share certificates in respect of TFG ordinary shares may not be
   dematerialised or rematerialised between Wednesday, 22 July 2020 and Friday,
   24 July 2020, both days inclusive.
2. Central Securities Depositary Participants (“CSDPs”) effect payment on a
   delivery versus payment basis in respect of dematerialised shares.
3. Qualifying dematerialised shareholders are required to inform their CSDP or
   broker of their instructions in terms of the Rights Offer in the manner and
   time stipulated in the custody agreement governing the relationship between
   the qualifying dematerialised shareholder and their CSDP or broker.
   Qualifying dematerialised shareholders are advised to contact their CSDP or
   broker as early as possible to establish what the cut-off dates and times
   are for acceptance of the Rights Offer, as set out in the custody agreement,
   as this may be earlier than the proposed closing time of the Rights Offer.

Shareholders are advised that the dates and times in respect of the Rights
Offer may change. Any changes to the dates and times will be announced on SENS.

10. Rights offer circular

Further details of the Rights Offer will be disclosed in the rights offer
circular (“Rights Offer Circular”), which Rights Offer Circular is anticipated
to be made available on TFG’s website, tfglimited.co.za, on Monday, 20 July
2020, and will be posted, together with a form of instruction in respect of the
letters of allocation, to certificated shareholders on Monday, 20 July 2020 and
to dematerialised shareholders on Monday, 27 July 2020.

Joint Global Coordinator and Underwriter
Absa Bank Limited
(acting through its Corporate and Investment Banking Division)


Joint Global Coordinator and Underwriter
Rand Merchant Bank
(a division of FirstRand Bank Limited)


Joint Global Coordinator and Underwriter
The Standard Bank of South Africa Limited
(acting through its Corporate and Investment Banking division)


Transaction Sponsor
Rand Merchant Bank
(a division of FirstRand Bank Limited)
(Registration Number 1929/001225/06)

Legal advisers to TFG as to South African law
Edward Nathan Sonnenbergs Incorporated


Legal advisers to TFG as to US law
Shearman & Sterling (London) LLP


Legal advisers to the Joint Global Coordinators and Underwriters as to South
African law
Webber Wentzel


Legal advisers to the Joint Global Coordinators and Underwriters as to US law
Linklaters LLP
Forward-Looking Statements

This announcement includes certain forward-looking statements, beliefs or
opinions, including statements with respect to TFG’s business, financial
condition, results of operations and prospects. Forward-looking statements are
typically identified by the use of forward looking terminology such as
“believes”, “expects”, “may”, “will”, “could”, “should”, “intends”,
“estimates”, “plans”, “assumes”, “anticipates”, “annualized”, “goal”, “target”
or “aim” or the negative thereof or other variations thereof or comparable
terminology, or by discussions of strategy that involve risk and uncertainties.
These statements reflect the directors' beliefs and expectations and involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. No representation is made that any of these
statements or forecasts will come to pass or that any forecast results will be
achieved. There are a number of risks, uncertainties and factors that could
cause actual results and developments to differ materially from those expressed
or implied by these statements and forecasts. Past performance cannot be relied
on as a guide to future performance. Forward-looking statements speak only as
at the date of this announcement, and TFG expressly disclaims any obligations
or undertaking to release any update of, or revisions to, any forward-looking
statements in this announcement. No statement in this announcement is intended
to be a profit forecast. As a result, you are cautioned not to place any undue
reliance on such forward-looking statements.

Important Notice

This announcement does not constitute or form a part of any offer or
solicitation or advertisement to purchase and/or subscribe for Securities in
South Africa, including an offer to the public for the sale of, or subscription
for, or the solicitation or advertisement of an offer to buy and/or subscribe
for, shares as defined in the South African Companies Act, No. 71 of 2008 (as
amended) or otherwise (the “Companies Act”) and will not be distributed to any
person in South Africa in any manner that could be construed as an offer to the
public in terms of the Companies Act. As a result, this announcement does not
comply with the substance and form requirements for a prospectus set out in
Companies Act and the South African Companies Regulations of 2011, and has not
been approved by, and/or registered with, the with the South African Companies
and Intellectual Property Commission or any other South African authority..
Nothing in this announcement should be viewed, or construed, as “advice”, as
that term is used in the South African Financial Markets Act, No. 19 of 2012,
as amended, and/or Financial Advisory and Intermediary Services Act, No. 37 of
2002, as amended (the “FAIS Act”).

The announcement constitutes factual, objective information about TFG and
nothing contained herein should be construed as constituting any form of
investments advice or recommendation, guidance or proposal of a financial
nature as contemplated in the FAIS Act in respect of TFG or any transaction in
relation thereto. TFG and/or its representatives and advisors are not (and are
not required to be) Financial Services Providers as contemplated in the FAIS
Act in South Africa and the contents of this announcement must not be construed
as constituting the canvassing for, or marketing or advertising of, financial
services by TFG and/or its representatives and advisors in South Africa. To the
extent that any of TFG’s representatives and/or advisors, including Rand
Merchant Bank (a division of FirstRand Bank Limited), The Standard Bank of
South Africa Limited and Absa Bank Limited (the “Joint Global Coordinators and
Underwriters”), are registered Financial Services Providers, none of them
purport to provide, market or advertise financial services to any person in
respect of TFG and this announcement does not constitute financial advice, or
financial services, provided by the aforesaid to any person who is in
possession of this announcement.

This announcement is not an offer of securities for sale in the United States
or in any jurisdiction in which such offer of securities for sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. Securities may not be offered, sold, resold, delivered
or distributed, directly or indirectly, in or into the United States unless
they are registered or are exempt from registration under the U.S. Securities
Act of 1933, as amended. TFG does not intend to register any offering in the
United States or to conduct a public offering in the United States. Copies of
this announcement are not being, and should not be, distributed in or sent,
directly or indirectly, into the United States or in or into any other
jurisdiction which would constitute a violation of the relevant laws of, or
require registration thereof in, such jurisdiction.

This announcement is for distribution only to persons who (a) have professional
experience in matters relating to investments falling within Article 19(5) of
the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
(as amended, the “Order”); (b) are persons falling within Article 49(2)(a) to
(d) (“high net worth companies, unincorporated associations, etc.”) of the
Order; (c) are outside the United Kingdom; or (d) are persons to whom an
invitation or inducement to engage in investment activity (within the meaning
of section 21 of the Financial Services and Markets Act 2000) in connection
with the issue or sale of any securities may otherwise lawfully be communicated
or caused to be communicated (all such persons together being referred to as
“relevant persons”). This announcement is directed only at relevant persons and
must not be acted on or relied on by persons who are not relevant persons. Any
investment or investment activity to which this announcement relates is
available only to relevant persons and will be engaged in only with relevant
persons.

This announcement is only addressed to and directed at persons in Member States
of the European Economic Area (“EEA”) and in the United Kingdom who are
“Qualified Investors” within the meaning of Article 2(e) of the Prospectus
Regulation. The securities referred to herein are only available to, and any
invitation, offer or agreement to subscribe, purchase or otherwise acquire such
securities will be engaged in only with Qualified Investors. This announcement
must not be acted on or relied on in any Member State of the EEA or in the
United Kingdom by persons who are not Qualified Investors. For the purposes of
this paragraph the expression “Prospectus Regulation” means Regulation (EU)
2017/1129 (as amended or superseded).
It may be unlawful to distribute this announcement in certain other
jurisdictions. This announcement is not for distribution in Canada, Japan or
Australia. The information in this announcement does not constitute an offer of
securities for sale in Canada, Japan or Australia.

Further, the content of this announcement should not be construed as business,
legal or tax advice. It is not intended to provide the basis of any credit or
other evaluation and should not be considered as a recommendation by TFG or any
of the Joint Global Coordinators and Underwriters that any recipient of this
announcement should acquire any of TFG’s securities. Neither TFG nor any of the
Joint Global Coordinators and Underwriters is making any representation to any
prospective investor regarding the legality of an investment in TFG by such
prospective investor under the laws and regulations applicable to such
prospective investor. Prospective investors should consult their own
professional adviser before making any investment decision with regard to TFG
and in making an investment decision, prospective investors must rely on their
own analysis, enquiry and examination of TFG, including the merits and risks
therein. All investment is subject to risk. The value of the securities offered
may go down as well as up. Past performance is no guarantee of future returns.

The contents of this announcement have not been verified by the Joint Global
Coordinators and Underwriters in connection with the Rights Offer or any of
their respective affiliates. Each Joint Global Coordinator and Underwriter is
acting on behalf of the TFG and no one else in connection with the Rights
Offer. They will not regard any other person as their client in relation to the
Rights Offer and will not be responsible to anyone other than TFG for providing
the protections afforded to their respective clients nor for providing advice
in relation to the Rights Offer, the contents of this announcement or any
transaction, arrangement or other matter referred to herein. Neither the Joint
Global Coordinators and Underwriters, nor any of their respective directors,
officers, employees, advisers, agents, alliance partners or any other entity or
person accepts any responsibility or liability whatsoever for, or makes any
representation, warranty or undertaking, express or implied, as to the truth,
accuracy, completeness or fairness of the information or opinion in this
announcement (or whether any information has been omitted from this
announcement) or any other information relating to TFG, its subsidiaries or
associated companies, whether written, oral or in a visual or electronic form,
and howsoever transmitted or made available or for any loss howsoever arising
from any use of this announcement or its contents or otherwise arising in
connection therewith. Accordingly, the Joint Global Coordinators and
Underwriters disclaim, to the fullest extent permitted by applicable law, all
and any liability, whether arising in tort, delict or contract or that they
might otherwise be found to have in respect of this announcement and/or any
such statement.

Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the “MiFID II Product Governance Requirements”) and disclaiming all
and any liability, whether arising in tort, contract or otherwise, which any
“manufacturer” (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the securities have been
subject to a product approval process, which has determined that such
securities are: (i) compatible with an end target market of retail investors
and investors who meet the criteria of professional clients and eligible
counterparties only, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the “Target Market Assessment”). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the securities may decline and
investors could lose all or part of their investment; the securities offer no
guaranteed income and no capital protection; and an investment in the
securities is compatible only with investors who do not need a guaranteed
income or capital protection, who (either alone or in conjunction with an
appropriate financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market Assessment is
without prejudice to the requirements of any contractual, legal or regulatory
selling restrictions in relation to the securities. Furthermore, it is noted
that, notwithstanding the Target Market Assessment, the Joint Global
Coordinators and Underwriters will only procure investors who meet the criteria
of professional clients and eligible counterparties. For the avoidance of
doubt, the Target Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; or (b) a
recommendation to any investor or group of investors to invest in, or purchase,
or take any other action whatsoever with respect to the securities. Each
distributor is responsible for undertaking its own target market assessment in
respect of the securities and determining appropriate distribution channels. No
key information document required by Regulation (EU) No. 1286/2014, as amended
(the “PRIIPs Regulation”) for offering or selling the securities or otherwise
making them available to retail investors in the EEA or in the United Kingdom
has been prepared or will be prepared and therefore offering or selling the
securities or otherwise making them available to any retail investor in the EEA
or in the United Kingdom may be unlawful under the PRIIPs Regulation.


Cape Town
14 July 2020

Sponsor:
UBS South Africa Proprietary Limited

Date: 14-07-2020 02:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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