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Terms of the Comair renounceable rights offer

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08-Apr-2010 Comair Limited

(Registration number 1967/006783/06

Incorporated in the Republic of South Africa

Share Code: COM

ISIN Code: ZAE000029823

("Comair" or "the Company")

TERMS OF THE COMAIR RENOUNCEABLE RIGHTS OFFER

1. INTRODUCTION

Shareholders are referred to an announcement published on SENS on Wednesday, 10 March 2010 where Comair announced its intention to raise R124,517,647 by way of a fully underwritten renounceable rights offer of 69,176,471 new Comair ordinary shares of 1 cent each ("Rights Offer Shares") to qualifying Comair ordinary shareholders and Comair `A` ordinary shareholders, that are eligible to participate (collectively "Shareholders") ("Rights Offer"). The Rights Offer Shares will be issued at a share price of 180 cents per Rights Offer Share ("Rights Offer Price") in the ratio of 14 rights for every 100 Comair ordinary shares or Comair `A` ordinary shares (collectively "Shares") held on the record date for the Rights Offer, being Friday, 30 April 2010 ("Record Date").

2. RATIONALE FOR THE RIGHTS OFFER

In its release of interim results for the six months ended 31 December 2009, Comair announced its intention to upgrade a portion of its aircraft fleet to the next generation Boeing 737-800 aircraft. The planned upgrade of the Comair fleet will contribute to operational efficiency and environmental sustainability. Comair has been able to secure favourable pricing from Boeing for the acquisition of these aircraft, with intended delivery dates from 2011 to 2015.

The capital raised through the Rights Offer will be utilised as the initial down payment to Boeing for the acquisition of the new fleet of aircraft. The balance of the funding for the new fleet will be raised from existing debt markets and existing cash resources.

3. TERMS OF THE RIGHTS OFFER

In terms of the Rights Offer, 69,176,471 Rights Offer Shares will be offered for subscription to Shareholders on the basis of 14 new Rights Offer Shares for every 100 Shares held, for subscription at 180 cents per Rights Offer Share. The Rights Offer will give all Shareholders recorded in the register of shareholders on the Record Date for the Rights Offer an equal opportunity to participate in the Rights Offer.

The Rights Offer Price represents a discount of 35.4% to the 30 day volume-weighted average price of Shares on the JSE as at 26 March 2010.

Shareholders are invited to apply for additional Rights Offer Shares over and above their entitlement.

Should there be excess Rights Offer Shares available for allocation after all Rights Offer Shares have been taken up in terms of the Rights Offer, these will be allocated equitably by the directors of Comair, who will allocate any or all excess applications in an equitable manner taking into consideration the number of Shares held by the Shareholder prior to the allocation, Rights Offer Shares subscribed for in terms of the Rights

Offer and excess Rights Offer Shares applied for.

Allocations in terms of the excess applications for additional Rights Offer Shares for each Shareholder shall not exceed an amount equal to the number of Rights Offer Shares to which a Shareholder is entitled to as at the Record Date.

The Rights Offer Shares issued will rank pari passu with the existing issued Shares.

4. UNDERWRITING

BB Investment Company (Proprietary) Limited ("BB Investment"), a wholly owned subsidiary of The Bidvest Group Limited, has agreed to fully underwrite the Rights Offer for an underwriting fee of 4% of the amount underwritten. The underwriting agreement is subject to certain conditions, which is normal for a transaction of this nature. Further details of the underwriting agreement are set out in the circular to Shareholders to be posted to Shareholders on Monday, 3 May 2010 ("Circular").

5. CONDITIONS PRECEDENT

The Rights Offer is subject to registration by the Companies and Intellectual Property Registration Office of all documents required to be registered in terms of the South African Companies Act (Act 61 of 1973), as amended, for the implementation of the Rights Offer.

The underwriting agreement is subject to, inter alia the finalisation date of the Rights Offer occurring on or before 23 April 2010.

6. FINANCIAL EFFECTS OF THE RIGHTS OFFER

The unaudited pro forma financial effects of Comair after the Rights Offer are set out below. It has been assumed for purposes of the unaudited pro-forma financial effects that the Rights Offer took place with effect from 1 July 2009.

Pro forma financial effects for the six months ended 31 December 2009

information / information / Unaudited financial Change / Unaudited Pro forma financial / Percentage

EPS / (cents) / 8.1 / 7.7 / (6.0%)

Diluted EPS / (cents) / 8.1 / 7.6 / (6.6%)

HEPS / (cents) / 8.1 / 7.7 / (6.0%)

Diluted HEPS / (cents) / 8.1 / 7.6 / (6.6%)

NAV per share / (cents) / 134 / 139 / 3.7%

TNAV per share / (cents) / 134 / 139 / 3.7%

Ordinary shares in issue / (`000) (net of treasury shares)/ 400,814 / 469,990 / 16.5%

Weighted average number of ordinary shares in issue /(`000) / 400,814 / 469,990 / 17.3%

Diluted weighted average number of ordinary shares in issue / (`000) / 404,510 / 473,686 / 17.1%

Notes and assumptions:

1. The unaudited financial information has been extracted from the unaudited interim results of Comair for the six months ended 31 December 2009.

2. The pro forma adjustments to the income statement have been calculated on the assumption that the proceeds from the Rights Offer were received on 1 July 2009.

3. The pro forma adjustments to the balance sheet have been calculated on the assumption that the proceeds were received on 31 December 2009.

4. The Rights Offer Share Price of 180 cents per share has been used for the pro forma adjustments with 69,176,471 Ordinary Shares being issued for a total quantum of R124,517,647.

5. It is assumed that the proceeds (R115,980,471) after netting off the underwriting fee and transaction costs from the Rights Offer will be held at a bank for the 6 month period and will earn interest income at an interest rate of 8% per annum.

6. A tax rate of 28% has been used on the interest impact.

7. The underwriting fee of R4,980,705 and estimated directly attributable transaction costs of R3,556,471, relating to the Rights Offer, are capitalized against the share premium account. Transaction costs relate to the fees paid to professional financial advisers, attorneys, and compliance fees and are not expected to have a continuing effect on Comair.

7. SALIENT DATES AND TIMES

Thursday, 22 April 2010

Last day to trade in Shares in order to participate in the Rights Offer (cum entitlement)

Friday, 23 April 2010

Shares commence trading ex-entitlement at 09:00 on

Friday, 23 April 2010

Listing of and trading in the letters of allocation on the JSE commences at 09:00 on

Friday, 30 April 2010

Record Date for the Rights Offer

Monday, 3 May 2010

Rights Offer Circular and form of instruction, where applicable, mailed to Shareholders

Monday, 3 May 2010

Rights Offer opens at 09:00 on

Monday, 3 May 2010

Letters of allocation credited to an electronic account held at the transfer secretaries in respect of holders of certificated shares

Monday, 3 May 2010

CSDP or broker accounts credited with entitlements in respect of holders of dematerialised Shares

Friday, 14 May 2010

Underwriting agreement becomes irrevocable at 16:30 (see note 6)

Friday, 14 May 2010

Last day for trading letters of allocation on the JSE

Monday, 17 May 2010

Listing of Rights Offer Shares and trading therein on the JSE commences at 09:00 on

Friday, 21 May 2010

Rights Offer closes at 12:00 (note 2) on

Friday, 21 May 2010

Payment to be made and form of instruction to be lodged with the transfer secretaries by holders of certificated Shares by 12:00 on

Friday, 21 May 2010

Record Date for the letters of allocation

Monday, 24 May 2010

Excess applications allocated

Monday, 24 May 2010

Rights Offer Shares issued on or about

Monday, 24 May 2010

CSDP or broker accounts in respect of holders of dematerialised Shares debited and updated with Rights Offer Shares and share certificates mailed to certificated shareholders by registered mail on or about

Monday, 24 May 2010

Results of the Rights Offer announced on SENS

Tuesday, 25 May 2010

Results of the Rights Offer published in the press

Wednesday, 26 May 2010

CSDP or broker accounts in respect of dematerialised Shares debited and updated with excess Rights Offer Shares, where applicable, and share certificates mailed to certificated

Wednesday, 26 May 2010

Shareholders who have been allocated excess shares, by registered mail on or about Refund cheques, if applicable, mailed to certificated Shareholders in respect of excess applications, on or about

Notes:

1. All times referred to in this announcement are local times in South Africa.

2. 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.

3. Share certificates may not be dematerialised or rematerialised between Friday, 23 April 2010 and Friday, 30 April 2010, both days inclusive.

4. To the extent that the Rights are accepted, dematerialised Shareholders will have their accounts at their CSDP automatically credited with their rights and certificated Shareholders will have their rights credited to an account at Computershare Investor Services.

5. CSDPs effect payment in respect of dematerialised Shareholders on a delivery versus payment method.

6. In the unlikely event that the underwriting agreement is terminated, Shareholders who have taken up their rights will be allowed to withdraw such acceptances. Details of the acceptance and withdrawal terms will be fully set out in the Circular.

8. POSTING OF RIGHTS OFFER CIRCULAR

Shareholders are advised that a Circular containing full details of the terms of the Rights Offer and a form of instruction in respect of a letter of allocation will be mailed to all Shareholders recorded in the register on the Record Date on or about Monday, 3 May 2010.

9. Finalisation announcement

It is anticipated that the finalisation announcement for the Rights Offer will be released on SENS on Thursday, 15 April 2010 and published in the South African press on Friday, 16 April 2010.

Johannesburg

8 April 2010

Investment bank and transaction sponsor

Investec Bank Limited

Attorneys

Edward Nathan Sonnenbergs

Sponsor

Rand Merchant Bank

Date: 08/04/2010 12:11:03 Supplied by www.sharenet.co.za

Produced by the JSE SENS Department .

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