27 March 2018
On 8 March 2018, Sanlam and Santam Limited announced that final agreements had been concluded to acquire an additional 53.37% shareholding in SAHAM Finances S.A. (“Saham”), increasing their stake, via Sanlam Emerging Markets Ireland Limited (“SEMIL”), to 100% (the “Saham Acquisition”). SEMIL first acquired a 30% stake in Saham in February 2016 and subsequently acquired a further 16.63% stake in May 2017, bringing the total held by SEMIL in Saham prior to the implementation of the Saham Acquisition to 46.63%.
The net proceeds from the placing will be used to part fund the Saham Acquisition. If the placing and the Saham Acquisition had been implemented by 31 December 2017, Sanlam’s group solvency ratio (as measured by the Solvency Assessment and Management regime currently being implemented in South Africa and expected to be effective from 1 July 2018) would have reduced by approximately 0.13 times from the 2.18 times cover ratio as at that date. The placing will allow Sanlam to maintain a conservative level of leverage.
The implementation of the Saham Acquisition remains subject to the fulfilment or waiver, as the case may be, of a number of conditions precedent including, inter alia, the receipt of all necessary regulatory approvals and the implementation by SAHAM S.A. of a corporate restructure in order to divest itself of all its investment holdings, assets and liabilities other than the Saham interest. In the event that the Saham Acquisition does not complete, post the completion of the Placing, the net proceeds will be added to available discretionary capital of the Company.
The Placing is being conducted through an accelerated bookbuild process (the “Bookbuild”), which will be launched immediately following this announcement. J.P. Morgan Securities plc, which conducts its South African investment banking activities as J.P. Morgan ("J.P. Morgan") and Deutsche Bank AG. London Branch (“Deutsche Bank”) are acting as joint global coordinators and joint bookrunners (the "Joint Global Coordinators and Joint Bookrunners") in respect of the Placing. The Bookbuild will open with immediate effect following this announcement.
The Placing will be made outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”) , and inside the US to qualified institutional buyers within the meaning of Rule 144A under the Securities Act, as amended in transactions exempt from the registration requirements of the Securities Act. In South Africa, the Placing will only be made by way of separate private placements to: (i) selected persons falling within one of the specified categories listed in section 96(1)(a) of the South African Companies Act, 71 of 2008, as amended ("South African Companies Act"); and (ii) selected persons, acting as principal, acquiring Placing Shares for a total acquisition cost of R1,000,000 or more, as contemplated in section 96(1)(b) of the South African Companies Act ("South African Qualifying Investors").
The Placing Shares will be issued by the Company under and in accordance with its existing general authority to issue shares for cash, granted by shareholders at the annual general meeting of the Company held on Wednesday, 7 June 2017.
The price per ordinary share at which the Placing Shares will be placed (the "Placing Price") will be decided at the close of the Bookbuild. The timing of the closing of the Bookbuild, the Placing Price and allocations are at the discretion of the Company and the Joint Global Coordinators and Joint Bookrunners. The Placing Price will be announced as soon as practicable on the Stock Exchange News Service of the exchange operated by the JSE Limited ("JSE") after the close of the Bookbuild.
The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares in the share capital of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of issue of the Placing Shares. For the avoidance of doubt, the Placing Shares are being offered cum dividend and investors who will be allocated shares as part of the Placing will be eligible to receive the 2017 dividend to be paid by the Company on Monday, 9 April 2018.
Subject to the approval by the JSE, listing and trading of the Placing Shares on the JSE ("Admission") is expected to commence at 09h00 Tuesday, 3 April 2018 (or such time and/or date as may be agreed between the Company and the Joint Global Coordinators and Joint Bookrunners). Investors will receive Placing Shares listed and trading on the JSE. In addition, subject to approval by Namibian Stock Exchange Limited, the Placing Shares will also be listed on the Namibian Stock Exchange.The Placing is conditional upon, amongst other things, Admission becoming effective and the placing agreement between the Company and the Joint Global Coordinators and Joint Bookrunners not being terminated in accordance with its terms prior to Admission.
Pursuant to the terms of the placing agreement, Sanlam has agreed to customary lock-up arrangements for a period of 120 days from the date of the Placing.