Sipef - Capital increase in cash with statutory preferential right for a maximum of EUR 88.9 million
SIPEF is a Belgian agro-industrial company listed on Euronext Brussels. The company mainly holds majority stakes in tropical businesses, which it manages and operates. SIPEF is active in the production of palm oil, rubber and tea (in Indonesia and Papua New Guinea) and bananas (in the Ivory Coast). The group sells its own products throughout the world.
SIPEF intends to use the net proceeds of the offering to reimburse part of the bridge loan facility entered into by the company to finance the acquisition of an additional interest of 47.71% in PT Agro Muko (March 2017) and, as the case may be, to pay part of the purchase price for the envisaged acquisition of PT Dendy Marker. The acquisition of an additional interest of 47.71% in PT Agro Muko will not increase the Group’s total palm oil area in Indonesia, but will increase the Group share with some 8.870 ha (19.570 ha x 47.71% x 95%). The acquisition of PT Dendy Marker, if it occurs, would increase the total palm oil area in Indonesia with some 6.562 hectares and group share with 6.234 ha (6.562 hectares x 95%).
The capital increase with statutory preferential right offers shareholders an opportunity to extend their investment in SIPEF, proportionate with their statutory preferential rights. The issue price is EUR 54.65 per new share, which is below the closing price of EUR 63.95 on Euronext Brussels on May 3, 2017.
The issue price is 12.84% below the closing price on Euronext Brussels on May 3, 2017, corrected for the detachment of coupon no. 10 from the underlying share. Coupon no. 10 represents the right to a dividend for the financial year 2016.
Based on the closing price, the theoretical ex-right price (TERP) is EUR 61.46, the theoretical value of one preferential subscription Right is EUR 1.24, and the discount of the issue price to TERP is 11.08%, taking into account the detachment of coupon no. 10, i.e., the coupon representing the right to a dividend for the financial year 2016. The holders of preferential subscription rights are entitled to subscribe to the new shares in the ratio of 2 new shares for 11 preferential subscription rights.
The new shares shall be of the same class and shall have the same rights as the existing shares. New shares will be issued with coupon n° 11 and following attached and will be entitled to dividend distributions as from the financial year 2017. The dividend for the financial year 2017 is subject to approval by the ordinary General Shareholders’ Meeting to be held on 13 June 2018.
The main terms and conditions of the capital increase are:
|Statutory preferential right||Represented by coupon no. 9|
|Subscription ratio||11 statutory preferential rights for 2 new shares|
|Issue price||EUR 54.65 per new share|
|Dividend right||All new shares will be issued with coupon no. 11 and following attached and will be entitled to dividend distributions as from the financial year 2017. The dividend for the financial year 2017 is subject to approval by the ordinary General Shareholders’ Meeting to be held on 13 June 2018.|
|Ex-coupon date||4 May 2017 (after closing of Euronext Brussels)|
|Payment date||24 May 2017|
|Subscription period||From 5 May 2017 to 19 May, during which the statutory preferential right (coupon no. 9) will be listed on Euronext Brussels|
If you don’t have at least 11 no. 9 coupons or a multiple thereof, you can buy additional statutory preferential rights on Euronext Brussels during the subscription period. If you prefer not to participate in the capital increase, you can offer your statutory preferential rights for sale on that exchange. To carry out these transactions, you need to submit a buy or sell order to your bank before 4 p.m. on 19 May 2017. In each case, all statutory preferential rights that have not been exercised will be offered for sale as scrips through a private placement on 22 May 2017. The net proceeds of the sale of these scrips will be credited to your account as from 29 May 2017, as long as they come to at least EUR 0.01 per coupon no. 9.
Investing in the new shares, the preferential subscription rights and the scrips involves a high degree of risk. An investor is exposed to the risk of losing all or part of its investment. Before any investment in the new shares, the preferential subscription rights or the scrips, investors must read section D of the summary, starting on page 17, and section 3 (risk factors), starting on page 28, and more specifically, section 3.1 (risk factors relating to the group and its activities), starting on page 28, and Section 3.2 (risks relating to the offering), starting on page 39. Each of these risk factors must be carefully studied and assessed before investing in the new shares, the preferential subscription rights or the scrips. The group’s results have in the past and may be in the future substantially affected by the market price fluctuation of its products, in particular palm oil, which generates the majority of the group’s revenue and profit.
Shareholders who fail to exercise their preferential subscription rights will be diluted. In the context of the offering, Ackermans & van Haaren NV may increase its shareholding above 30% without triggering the obligation to launch a mandatory public takeover bid.