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ELB GROUP LIMITED - Proposed specific repurchase, distribution of circular to shareholders and notice of general meeting

Release Date: 20/10/2017 15:09
Code(s): ELR     PDF:  
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Proposed specific repurchase, distribution of circular to shareholders and notice of general meeting

ELB GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number: 1930/002553/06
ISIN: ZAE000035101
JSE Code: ELR
(“ELB” or “the Company” or “the Group”)

PROPOSED SPECIFIC REPURCHASE OF ELB ORDINARY SHARES, DISTRIBUTION OF A CIRCULAR TO
SHAREHOLDERS AND NOTICE OF GENERAL MEETING

1.    PROPOSED SPECIFIC REPURCHASE OF ELB ORDINARY SHARES

1.1   Introduction, background and rationale
      Shareholders are advised that the Company intends proposing a:
      -    specific repurchase of 852 900 ordinary shares by the ELB Share Incentive Trust (“the
           Trust”) from Specific Participants of the ELB Share Incentive Schemes (“the Trust Specific
           Repurchase”); and
      -    specific repurchase by the Company from the Trust of any excess shares held by the Trust
           subsequent to the Trust Specific Repurchase (“the Company Specific Repurchase”),
           (collectively “the Specific Repurchase”).

      In terms of the rules of the ELB Group Limited Share Incentive Schemes (“the Schemes”):
      -     share options are awarded to certain qualifying directors and executive management of
            ELB (“the Participants”), which upon exercise, require the Participants to purchase a
            specific number of shares in the Company (“Scheme Shares”);
      -     Participants may finance the purchase of these Scheme Shares by means of a loan
            (“Loan Obligation”) from the Trust; and
      -     Participants have up to 10 years from the anniversary of the award of share options to
            pay for their Scheme Shares.

      Participants holding 852 900 Scheme Shares (“Specific Participants”) will be required to settle
      their Loan Obligations by 20 March 2018. The rationale for the Trust Specific Repurchase is to
      allow these Specific Participants to sell and the Trust to buy their Scheme Shares in order for
      the Specific Participants to settle their Loan Obligations.

1.2   Terms of the Specific Repurchase
      The Trust Specific Repurchase will:
      -     be effected through the repurchase of 852 900 Scheme Shares by the Trust from the
            Specific Participants at a price based on the 30-day volume weighted average price
            (“VWAP”) of the Company’s shares on the JSE at 20 March 2018 (“Repurchase Price”);
      -     represent 2.62% of the ELB ordinary shares currently in issue;
      -     have no impact on the current number of ELB treasury shares;
      -     not require a fairness opinion in terms of the JSE Limited Listings Requirements as,
            notwithstanding that the Trust Specific Repurchase is from related parties, the purchase
            price is not at a premium to the Repurchase Price;
      -     require approval by shareholders by way of a special resolution at a general meeting.

      The Company Specific Repurchase:
      Shareholders will be requested, by way of a special resolution, to authorise the Trust to sell
      and the Company to purchase, at a price equal to the 30-day VWAP on 20 March 2018, any
      excess Scheme Shares that the Trust may hold following the Trust Specific Repurchase
      (“Excess Shares”).

      If any Excess Shares are purchased by the Company they will be cancelled and restored to the
      status of authorised but unissued ordinary shares and accordingly, an application will be made
      to the JSE for the delisting of those Excess Shares once the Specific Repurchase has been
      effected.

1.3   Financial information
      The difference between the Specific Participants’ Loan Obligation and the Repurchase Price
      may, depending on the VWAP at 20 March 2018, represent a net cash outflow to the Group.
      Assuming a purchase price of 1 950 cents per Scheme Share (being the VWAP of an ELB share
      as at 5 October 2017 (which was the last practicable date prior to the finalisation of the
      circular detailed below), the net expected cash outflow to the Group will amount to R2.2
      million and will represent a distribution to Scheme Participants.

      There will be no impact on the total issued share capital or on the number of treasury shares
      in the event that there are sufficient unexercised share options to allocate against the
      repurchased Scheme Shares.

      There will be no impact on the weighted average number of shares in issue for financial
      reporting purposes, as Scheme Shares are treated as treasury shares in the determination of
      the weighted average number of shares in issue.

2.    CIRCULAR TO SHAREHOLDERS
      A circular containing full details of the proposed Specific Repurchase and incorporating a
      notice of a general meeting, as detailed below, will be despatched today to shareholders
      registered as such on Friday, 13 October 2017.
      The Circular will also be available on the Company’s website: www.elb.co.za.

3.    NOTICE OF GENERAL MEETING
      Notice is hereby given that a general meeting of the Company’s shareholders will be held in
      the Boardroom of ELB Engineering Services Proprietary Limited, 345 Rivonia Road, Rivonia,
      Johannesburg at 12:15 or directly after the ELB annual general meeting on Thursday,
      23 November 2017 (“General Meeting”), to consider the relevant resolutions to approve the
      Specific Repurchase.

      The salient dates and times relating to the General Meeting are set out below:

                                                                                                   2017
       Last day to trade in order to be eligible to vote at the General Meeting    Tuesday, 14 November
       Record date in order to vote at the General Meeting                          Friday, 17 November
       General Meeting to be held in the boardroom of ELB Engineering             Thursday, 23 November
       Services Proprietary Limited, 345 Rivonia Road, Rivonia, Johannesburg
       at 12:15 or directly after the annual general meeting

      The above dates and times are subject to change. Any such change will be released on SENS.

Boksburg
20 October 2017

Sponsor
Questco Corporate Advisory Proprietary Limited

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