FOR IMMEDIATE RELEASE
21 November 2023
AFRICAN RAINBOW CAPITAL ZAR750 MILLION FULLY COMMITTED AND UNDERWRITTEN PRO-RATA NON-RENOUNCEABLE RIGHTS OFFER
The ZAR750 Million Rights Offer is to boost ARC Investments growth plans and bolster the ARC Fund.
Johannesburg, 21 November 2023: Leading empowerment investment holding company African Rainbow Capital Investments (ARC Investments) today announced plans to raise ZAR750 million through a fully committed and underwritten pro-rata non-renounceable rights offer. Under the Rights Offer, qualifying shareholders will receive 11.06579 rights offer shares for every 100 existing ARC Investments ordinary shares (“Ordinary Shares”) held on the record date of the Rights Offer.
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 for the use in its existing portfolio companies, as well as for future acquisition opportunities in line with the ARC Fund growth strategies and investment mandate. The ARC Fund will continue to invest in terms of its investment strategy and mandate, focusing on the following:
- New market expansions for Rain Group Holdings (Pty) Ltd as well as continued development of its existing product offering such as rainone.
- Continued expansion opportunities at Tyme, most notably through Tyme Global which continues to see success in the Philippines with GOtyme, which has attracted 1 million customers with high customer activity rates.
- Supporting the investment strategies of various fast growing ARC Fund investee companies such as Autoboys, Linebooker and Apollo.
- Fulfilling general liquidity requirements of the ARC Fund.
The additional capital (after expenses of the Rights Offer and ARC Investments’ liquidity requirements) of approximately ZAR742.35 million, is expected to be sufficient to meet the medium-term funding requirements of the ARC Fund, considering that a number of companies in the portfolio are maturing and that the combined portfolio is expected to become more cash generative during the next twelve 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.
SALIENT TERMS OF THE RIGHTS OFFER
- ARC Investments proposes to raise ZAR750 million through an offer of 150 000 000 Ordinary Shares (“Rights Offer Shares”) at a price of ZAR5.00 per Rights Offer Share (“Rights Offer Price”) in the ratio of 11.06579 Rights Offer Shares for every 100 existing Ordinary Shares held on the record date for the Rights Offer, being Friday, 1 December 2023.
- The Rights Offer Price represents a 7.32022% discount to the 30 day volume weighted average price of the Ordinary Shares as at 10 November 2023, being the last practicable date.
- 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, 11 December 2023.
- The Rights Offer Shares will, upon issue and allotment, rank pari passu with all other Ordinary Shares in ARC Investments.
- Excess applications will not be allowed.
- The Rights Offer is not conditional on any minimum subscription being obtained.
- 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.
- No commitment fees are payable.
IRREVOCABLE SUBSCRIPTION UNDERTAKINGS AND UNDERWRITING
ARC Investments has obtained the following irrevocable subscription undertakings from ARC Investments shareholders, representing 60.5% of the issued Ordinary Shares as at the last practicable date, being Friday, 10 November 2023:
|Number of Ordinary Shares
|Percentage of Ordinary Shares held (%)
|African Rainbow Capital
|584 530 305
|UBI General Partner (Pty) Ltd (On behalf of ARC Fund)
|78 823 621
|K2017386337 (Pty) Ltd
|74 174 770
|Ubuntu-Botho Investments (Pty) Ltd
|53 613 957
|ARC Financial Services Investments (Pty) Ltd
|29 488 116
|820 630 769
- The balance of the Rights Offer is fully underwritten by African Rainbow Capital (Pty) Ltd.
- The directors have made due and careful enquiry to confirm that ARC is able to meet its commitments in terms of the Rights Offer.
- No underwriting fees are payable.
Rights Offer Shares trading is set to begin on Monday, 4 December 2023.
For media enquiries, please contact:
Garry Ramaru on 0664774112 email@example.com
NOTES TO THE EDITORS
African Rainbow Capital (ARC)
- ARC is a leading empowerment investment holding company and is 100% owned by Ubuntu-Botho Investments, which has shareholding in Sanlam, the diversified financial services company.
- ARC Financial Services Investments (ARCFSI) is the vehicle used to conduct most of ARC’s financial services investments.
- ARC has a significant interest in ARCFSI through it’s 50.1% direct stake in African Rainbow Capital Financial Services Holdings (ARCFSH) and the ARC Fund, which owns 49.9% of ARC Financial Services Holdings.
- ARCFSH owns 75% of ARCFSI , Sanlam Life Insurance Limited owns the remaining 25%.
- ARC Investments (ARCI) has as its main asset the ARC Fund that carries the portfolio of investments.
- ARCI is incorporated in terms of Mauritian company law and has been listed on the Johannesburg Stock Exchange in South Africa since 7 September 2017.