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Alviva - specific repurchase of treasury shares
Alviva shareholders, (“shareholders”), are referred to the SENS announcement dated 30 September 2016 where they were advised that the Board of Directors of the company resolved, subject to Shareholder approval being obtained, to repurchase ordinary shares held by Alviva Treasury Services as treasury shares (“the Specific Repurchase Shares”) in two separate divisible tranches, with:
- the Specific Repurchase Tranche 1, which was implemented pursuant to the 2016 Annual General Meeting; and
- the balance of the Specific Repurchase Shares, being the Tranche 2 Shares, being implemented pursuant to the 2018 Annual General Meeting.
Shareholders are hereby advised that Alviva concluded a share repurchase agreement on 28 August 2018 (“Tranche 2 Agreement”) with Alviva Treasury Services, a subsidiary of Alviva, for the repurchase of Tranche 2 Shares. The Board of Directors of the company resolved, subject to Shareholder approval being obtained at the 2018 Annual General Meeting, to repurchase the balance of the Specific Repurchase Shares.
As at Tuesday, 28 August 2018, Alviva Treasury Services held a total of 6 500 000 Alviva ordinary shares as treasury shares, constituting 4,13% of the company’s issued share capital, being the Tranche 2 Shares. The number of treasury shares repurchased in 2016 in terms of Specific Repurchase Tranche 1 was 5 569 974 shares, (“Tranche 1 Shares”). The Tranche 1 Shares and Tranche 2 Shares, collectively, amount to 12 069 974 Alviva ordinary shares held as treasury shares, constituting 6,58% of the company’s issued share capital, being the Specific Repurchase Shares.
As this is more than 5% of the company’s issued share capital, the Specific Repurchase Tranche 2 is subject to the requirements of sections 48(8)(b), 114 and 115 of the Companies Act and paragraph 5.69 of the JSE Listings Requirements. In accordance with sections 114(e), the Specific Repurchase Tranche 2 will be implemented by way of a scheme of arrangement. In terms of section 115(2)(a) of the Companies Act, Specific Repurchase Tranche 2 requires the prior approval of Shareholders in general meeting by means of a special resolution.
The notice of Annual General Meeting, to form part of the 2018 Integrated Annual Report, will include a special resolution relating to the Specific Repurchase Tranche 2 and will be posted to shareholders as per paragraph below.
Salient dates of the Specific Repurchase Tranche 2
The Specific Repurchase Tranche 2 will be implemented at a VWAP of Alviva ordinary shares traded on the JSE over the 30 (thirty) trading days immediately prior to the date of conclusion of the Tranche 2 Agreement, being the Specific Repurchase Tranche 2 Repurchase Price. As at 28 August 2018, being the date on which the Tranche 2 Agreement was signed by Alviva and Alviva Treasury Services, the Specific Repurchase Tranche 2 Repurchase Price is R18,36 per ordinary share. Accordingly, the total consideration payable by Alviva to Alviva Treasury Services in respect of the Specific Repurchase Tranche 2 amounts to R119 340 000.
As the Specific Repurchase Tranche 2 is intra-Group, no change in the Group’s financial cash resources will transpire as a result of the implementation of same and the financial effects of the Specific Repurchase Tranche 2 are minimal. Distributable reserves will be used to settle the Specific Repurchase Tranche 2 Consideration.
Following the Specific Repurchase Tranche 2 being implemented, the Tranche 2 Shares so repurchased will be delisted from the JSE by the company and then cancelled.
Financial impact of the Specific Repurchase Tranche 2
- The impact of the Specific Repurchase Tranche 2 on the Issued Share Capital of the company is that the ordinary shares in issue will be reduced by 6 500 000 to 150 717 917.
- The company’s Share capital account will be reduced by R65 000,00 (being the 6 500 000 Ordinary Shares with a par value of 1 (one) cent per ordinary share).
- The company’s reserves will be reduced by the difference between the purchase price and the par value of the Ordinary Shares, being 1 (one) cent per Ordinary Share as the company will elect to make payment of the Specific Repurchase Tranche 2 Consideration out of distributable reserves 1 which will constitute a “dividend” as per the Income Tax Act No. 58 of 1962.
The Specific Repurchase Tranche 2 Consideration will be paid, in full, in accordance with the terms of the Specific Repurchase Tranche 2 without regard to any lien, right of set- off, counterclaim or other analogous right to which Alviva may otherwise be, or claim to be, entitled against any Alviva Treasury Services.
Conditions precedent
Implementation of the Specific Repurchase Tranche 2 is subject to the fulfilment of the following conditions precedent:
- the approval by Shareholders at the Annual General Meeting by way of the special resolution, as required by paragraph 5.69(b) of the JSE Listings Requirements and section 48(8)(b) of the Companies Act, adopted in accordance with the requirements of sections 114 and 115 of the Companies Act.
- to the extent and if required, the approval of the implementation of the special resolution by the Court in terms of section 115 of the Companies Act;
- if applicable, Alviva not treating the special resolution as a nullity, as contemplated in terms of section 115(5)(b) of the Companies Act; and
- the receipt of unconditional approvals, consents or waivers from all regulatory bodies, including the JSE.
Should all of the conditions precedent referred to above not have been fulfilled or waived (if possible), as the case may be, following the conclusion of the Annual General Meeting to be held on or about 21 November 2018, or any adjournment thereof, or by such other later date as may be determined by Alviva and subject to the approval of the Takeover Regulation Panel (“TRP”) and JSE (if necessary), the Specific Repurchase Tranche 2 will not become operative and shall be of no force or effect. An announcement will be published on SENS and in the South African press as soon as practicably possible advising on the fulfilment or otherwise of the above conditions precedent and the ramifications and effects thereof.
The salient dates and times for the proposed Specific Repurchase Tranche 2
The circular, containing full details of the Specific Repurchase Tranche 2, as well as the salient dates and times for the Annual General Meeting, will be incorporated in the 2018 Integrated Annual Report. The salient dates and times will also be published at time of posting of the circular and 2018 Integrated Annual Report to Shareholders. The 2018 Integrated Annual Report is expected to be posted on or about Friday, 28 September 2018.
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