CIG shareholders are advised that CIG has issued a total of 12 million new CIG shares for cash (cash issue), representing 8.92% of the issued share capital of CIG, in terms of a general authority to issue shares for cash granted at the company’s annual general meeting which was held on 2 April 2014.
Consideration and number of shares issued in terms of the cash issue
In total 12 million shares were issued at a price of R27 per share (a 3.73% discount to the 30 day volume weighted average traded price of the company’s shares prior to 24 June 2014, being the date the issue was agreed between the company and subscribers under the cash issue). A total cash amount of R324 million has been raised in terms of the cash issue and the new CIG shares issued rank pari passu with the existing shares in issue. The new CIG shares were placed with public shareholders, as defined in paragraphs 4.25 and 4.26 of the JSE
Application of proceeds of the cash issue
CIG has, subject to due diligence and other regulatory approvals, signed a binding offer to acquire 100% of the shares in Tension Overhead Electrification (Pty) Ltd trading as Transactionel Enterprise (Transactionel), a company specialising in electrification in the Railways Sector, for a purchase consideration which is expected to be in the range from R111 million to R141 million. Up to R90 million of the proceeds of the cash issue will be utilised to partly settle the purchase consideration of the Transactionel shares to be acquired. The Transactionel acquisition is not categorisable in terms of section 9 of the JSE Listings Requirements and accordingly no further information is required to be disclosed. The balance of the proceeds will be utilised by CIG to fund the growth in projects CIG expects to execute over the foreseeable future.
Financial effects of the cash issue
The table below sets out the unaudited pro forma financial effects of the cash issue based on CIG’s unaudited consolidated statement of comprehensive income for the 6 months ended 28 February 2014 and CIG’s unaudited consolidated statement of financial position as at 28 February 2014. These financial effects are the responsibility of the directors of CIG and they have been prepared for illustrative purposes only, in order to provide information about the financial results and the financial position of CIG assuming that the cash issue had been implemented on 1 September 2013 and 28 February 2014, respectively. Due to their nature the unaudited pro forma financial effects may not give a fair reflection of CIG’s financial position, changes in equity, results of operations and cash flows subsequent to the cash issue. The unaudited pro forma financial effects have not been reviewed or reported on by the independent reporting accountants or external auditors. The unaudited pro forma financial effects have been prepared in accordance with the accounting policies of the CIG group that were used in the preparation of its results for the 6 months ended 28 February 2014.