AVENG LIMITED - Rights offer declaration announcem5 Jun 2018
AEG AEGCB 201806050056A
Rights offer declaration announcement

AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
Share code: AEG
Share ISIN: ZAE000111829
JSE 2019 Convertible Bond Code: AEGCB
JSE 2019 Convertible Bond ISIN: ZAE000194940
("Aveng", "the Company" or “the Group”)

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES, AUSTRALIA, CANADA OR JAPAN. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN
OFFER OF SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION.

RIGHTS OFFER DECLARATION ANNOUNCEMENT

1    Introduction

Shareholders are referred to the announcements released by Aveng on the Stock Exchange News Service (“SENS”) on
Thursday, 26 April 2018 (“Capital Markets Transaction Announcement”) and on Friday, 18 May 2018 (“M&R Transaction
Announcement”) respectively, in which Aveng announced (i) its intention to early redeem the R2 billion, 7.25% senior
unsecured convertible registered bonds due 24 July 2019 (“Existing Convertible Bonds”) still in issue (“Early Bond
Redemption”), (ii) its intention to launch a renounceable rights offer of up to R500 million to qualifying Aveng shareholders
to raise cash to fund internal liquidity requirements (“Rights Offer”), and (iii) that the boards of directors of Aveng (“Aveng
Board”) and Murray & Roberts Limited (“Murray & Roberts”) have reached in principle agreement regarding the proposed
terms of a potential combination of Aveng and Murray & Roberts (“M&R Transaction”). Shareholders are further referred
to the announcement released by Aveng on SENS on Tuesday, 29 May 2018 (“Update Announcement”), in which Aveng
restated its commitment to launching the Rights Offer and that the Aveng Board remains of the opinion that there is merit
in the potential combination of Aveng and Murray & Roberts and is continuing to progress the M&R Transaction.

Shareholders are also referred to the results of the general meeting announcement released by Aveng on 29 May 2018
wherein shareholders were advised that the necessary resolutions to implement the Rights Offer had been passed. Such
resolutions included:

    -     authorisation to convert par value shares to no par value shares and the amendment of the MOI to take account
          of the conversion;
    -     authorisation to increase authorised share capital from 882 034 263 shares to 180 882 034 263 shares; and
    -     the granting of authority to the Directors to issue such number of new Aveng ordinary shares as may be
          required for the purposes of implementing the Capital Markets Transaction, including authorisation to issue
          new Aveng ordinary shares for that purpose with voting power that may, upon issue, exceed 30% of the existing
          voting power of the Aveng ordinary shares currently in issue.

Aveng hereby declares its intention to undertake the Rights Offer in the form of a renounceable rights offer to all qualifying
Aveng shareholders, in order to raise up to an aggregate amount of R500 million.

2    Salient terms of the Rights Offer

The Rights Offer will comprise an offer of approximately 5 billion new ordinary shares (“Rights Offer Shares”), issued in
the ratio of 1 199.98772 Rights Offer Shares for every 100 ordinary Aveng shares held on the record date for the Rights
Offer, at a subscription price of R0.10 per Rights Offer Share (“Rights Offer Price”), in order to raise up to R500 million.
The Rights Offer Price represents a 82% discount to the closing Aveng share price and a 87% discount to the 30 day
volume weighted average price on Monday, 4 June 2018.

3    Rationale for the Rights Offer

As communicated in the Capital Markets Transaction Announcement, the rationale for the Rights Offer and the Early
Bond Redemption is to delever the Aveng balance sheet to a sustainable level; to derisk the business through the
removal of the refinance overhang related to the Existing Convertible Bond; and to raise interim liquidity for the Company
to fund operations.

In addition to the proceeds to be raised from the Rights Offer, the Company is finalising the terms of a new R200 million
super senior debt facility (“New SSF Debt”) from its bank funders to further improve its interim liquidity position. As
indicated in the Capital Markets Transaction Announcement, the New SSF Debt will increase Aveng total bank debt to
R1.8 billion.

To the extent that the M&R Transaction is not successful, Aveng remains committed to early redeem the outstanding
Existing Convertible Bonds as soon as practically possible. The amended terms and conditions of the Existing
Convertible Bonds will allow for the early redemption of the outstanding Existing Convertible Bonds, which redemption
is to be settled in cash or by the issue of new Aveng shares or both. In the event that the M&R Transaction is not
successful, Aveng will consider the viability of raising new cash from either the issue of new equity or a new debt
instrument to settle all or a portion of the outstanding Existing Convertible Bonds. To the extent this is not viable, the
outstanding Existing Convertible Bonds will be settled by the issue of new Aveng shares. In this event, Aveng will allot
and issue such Aveng shares to the Existing Convertible Bondholders as a specific issue of shares for cash in
accordance with the applicable requirements of the Listings Requirements of the JSE and the provisions of the
Companies Act, 2008 (“Specific Issue”). To the extent required, the Specific Issue will be priced at the same price as the
Rights Offer and will be conditional on approval from independent shareholders.

Aveng will announce the terms of the Early Bond Redemption as soon as practically possible, if the M&R Transaction is
not successful.

4     Shareholder undertakings and indication of support

4.1      Shareholder undertakings

The Company has received undertakings to follow or support rights, as applicable, for approximately R245 million
(“Shareholder Undertakings”), subject to the restrictions listed below.

Details of the Shareholder Undertakings are set out below:

                                                                                  Number of Rights
                                                             Number of            Offer Shares in
                                                             Aveng shares         the ratio of
                                   Number of                 subject to the       1199.98772 for
                                   Aveng                     Shareholder          every 100 Aveng
Shareholder                        shares held               Undertaking          ordinary shares      Value (Rand million)      % of Rights Offer

Allan Gray1,2                      100 511 612                 83 334 187           1 000 000 011                     100.0                   20.0
Coronation3,4                       85 889 168                 83 334 187           1 000 000 011                     100.0                   20.0
Institutional Shareholder5          50 000 442                 37 500 000             449 995 395                      45.0                    9.0
                                                                                                                      245.0                   49.0

Notes:

     1.   Allan Gray Proprietary Limited (“Allan Gray”) is the appointed discretionary investment manager of clients who are beneficial and/or
          registered holders of Aveng ordinary shares. Allan Gray is not the beneficial owner of the shares and has irrevocably undertaken
          to recommend to its clients to follow their rights. This commitment is subject to the continuing mandates of its clients in their current
          form and in the absence of any instructions from its clients to the contrary. Allan Gray has limited its commitment such that its
          clients’ rights need not be followed by the clients to the extent that the exercise thereof would result in Allan Gray clients’ aggregate
          holding of the issued shares in the capital of Aveng exceeding 34.9%.
     2.   Allan Gray has limited its clients’ commitment to 83 334 187 shares, representing R100 million, subject to the restrictions outlined
          in (1).
     3.   Coronation Asset Management Proprietary Limited (“Coronation”) holds the shares on behalf of its clients that are the beneficial
          owners of the shares in terms of a revocable investment mandate. Coronation has limited its commitment such that its clients’
          rights need not be followed by the clients to the extent that the exercise thereof would result in Coronation aggregate holding of
          the issued shares in the capital of Aveng exceeding 30%.
     4.   Coronation has limited its commitment to R100 million, representing 83 334 187 shares, subject to the restrictions outlined in (3).
     5.   An institutional asset manager (“Institutional Shareholder”) acts as investment manager and agent for and on behalf of various
          clients, entitling them to deal with the shares in terms of the mandates entered into between themselves and their clients. The
          Institutional Shareholder has limited its commitment to 75% of the shares currently held by its clients. This commitment is subject
          to the continuing mandates of its clients in their current form and an absence of any instructions from its clients to the contrary.

4.2     Impact of restrictions on Shareholder Undertakings

The impact of the restrictions on the Shareholder Undertakings in Notes (1) and (3) above is that the effective committed
amount - if no other shareholders follow their rights in terms of the Rights Offer and no excess applications are made, is
approximately R154 million.

5     Fractional entitlements

Rights Offer Shares representing fractional entitlements will not be issued. Where necessary, entitlements to Rights
Offer Shares of 0.5 or greater will be rounded up and less than 0.5 will be rounded down to the nearest whole number.

6     Excess applications

Shareholders will be permitted to apply for additional Rights Offer Shares over and above their entitlement. Should there
be excess Rights Offer Shares available for allocation, such excess Rights Offer Shares will be allocated equitably, as
contemplated in paragraph 5.33 of the Listings Requirements of the JSE.

7       Salient dates and times of the Rights Offer

The proposed salient dates and times for the Rights Offer are set out below:

                                                                                                      2018




Finalisation date                                                                         Thursday, 7 June
Last day to trade in shares in order to participate in the Rights Offer (cum
entitlement)                                                                              Tuesday, 12 June
Shares commence trading ex-entitlement at 09:00 on                                      Wednesday, 13 June
Listing of and trading in the Letters of Allocation under code AEGN and ISIN
ZAE000257937 on the JSE commences at 09:00 on                                           Wednesday, 13 June
Circular and a Form of Instruction, where applicable, posted to Qualifying
Certificated Shareholders on                                                             Thursday, 14 June
Record Date at 17:00 on                                                                    Friday, 15 June
Rights Offer opens at 09:00 on                                                             Monday, 18 June
In respect of Qualifying Certificated Shareholders, Letters of Allocation credited to
an electronic account held with the Transfer Secretaries at 09:00 on                       Monday, 18 June
In respect of Qualifying Dematerialised Shareholders, CSDP or Broker accounts
credited with Letter of Allocation at 09:00 on                                             Monday, 18 June
Circular, where applicable, posted to Qualifying Dematerialised Shareholders on           Tuesday, 19 June
Last day to trade Letters of Allocation on the JSE                                        Tuesday, 26 June
In respect of Qualifying Certificated Shareholders wishing to sell all or some of
their Letters of Allocation, Forms of Instruction to be lodged with the Transfer          Tuesday, 26 June
Secretaries by 12:00 on
Listing of Rights Offer Shares and trading therein on the JSE commences at 09:00
on                                                                                      Wednesday, 27 June
In respect of Qualifying Certificated Shareholders (or their renouncees) wishing to
exercise all or some of their rights, payment to be made and Forms of Instruction          Friday, 29 June
to be lodged with the Transfer Secretaries by 12:00 on
Rights Offer closes at 12:00 on                                                            Friday, 29 June
Record date for Letters of Allocation on                                                   Friday, 29 June
Rights Offer Shares issued on                                                               Monday, 2 July
In respect of Qualifying Dematerialised Shareholders (or their renouncees), CSDP
or Broker accounts debited with the aggregate Rights Offer Price and updated with           Monday, 2 July
Rights Offer Shares at 09:00 on
In respect of Qualifying Certificated Shareholders (or their renouncees), share
certificates in respect of Rights Offer Shares posted on or about                           Monday, 2 July
Results of the Rights Offer announced on SENS on                                            Monday, 2 July
Results of the Rights Offer published in the press on                                      Tuesday, 3 July
In respect of successful excess applications (if applicable), Rights Offer Shares
issued to Qualifying Dematerialsed Shareholders and/or share certificates posted         Wednesday, 3 July
by registered post to Qualifying Certificated Shareholders on or about
In respect of unsuccessful excess applications (if applicable), refund payments
made to Certificated Shareholders on or about                                            Wednesday, 3 July

Notes:

 1.    Share certificates may not be dematerialised or rematerialised between Wednesday, 13 June 2018 and Friday, 15 June 2018,
       both days inclusive.
 2.    If you are a Qualifying Dematerialised Shareholder you are required to notify your duly appointed CSDP or Broker of your
       acceptance of the Rights Offer in the manner and time stipulated in the agreement governing the relationship between yourself
       and your CSDP or Broker.
 3.    CSDPs effect payment on a delivery versus payment method in respect of Qualifying Dematerialised Shareholders.
 4.    All times are South African times.
 5.    Share certificates will be posted by registered post at the risk of the Qualifying Certificated Shareholders (or their renouncees)

8       Conditions precedent

The implementation of the Rights Offer is subject to the fulfilment of the following conditions precedent which are
expected to be fulfilled on Thursday, 7 June 2018:
    -        approval being obtained from the JSE Limited (“JSE”) for the Rights Offer circular; and
    -        approval being obtained from the JSE for the listing of the Letters of Allocation and the listing of the Rights
             Offer Shares.

9       Further announcement and documentation

It is anticipated that the finalisation announcement for the Rights Offer will be released on SENS on or about Thursday,
7 June 2018 and in the South African press on or about Friday, 8 June 2018.

The Rights Offer circular will be made electronically available on Aveng’s website (www.aveng.co.za) from Wednesday,
13 June 2018.

5 June 2018
Jet Park, Johannesburg

Financial advisor and transaction sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)

Legal advisors
Baker McKenzie

Michael Canterbury
Group Executive: Strategy & Investor Relations
Tel: 011 779 2979
Email: michael.canterbury@avenggroup.com

This announcement is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly,
in or into the United States, Australia, Canada, Japan or any other jurisdiction in which such release, publication or
distribution would be unlawful. This announcement is for information purposes only, does not purport to be full or
complete, is subject to change and shall not constitute or form part of an offer or solicitation of an offer to purchase or
subscribe for securities in the United States or any other jurisdiction. No reliance may be placed for any purpose on the
information contained in this announcement or its accuracy or completeness.

The Rights Offer shares have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold, directly or indirectly, in the United States, absent
registration or an exemption from, or transaction not subject to, the registration requirements of the Securities Act. There
will be no public offer of the Rights Offer shares in the United States.

Neither this announcement nor the Rights Offer constitutes or is intended to constitute an offer to the public in South
Africa in terms of the South African Companies Act 71 of 2008 (as amended).

In member states of the European Economic Area (“EEA”) which have implemented the Prospectus Directive (each, a
“Relevant Member State”), this announcement and any offer if made subsequently is directed exclusively at persons who
are “qualified investors” within the meaning of the Prospectus Directive (“Qualified Investors”). For these purposes, the
expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including Directive
2010/73/EU, to the extent implemented in a Relevant Member State), and includes any relevant implementing measure
in the Relevant Member State.

In the United Kingdom this announcement is only being distributed to, and is only directed at, and any investment or
investment activity to which this announcement relates is available only to, and will be engaged in only with, Qualified
Investors who are (i) investment professionals falling with Article 19(5) of the UK Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of
the Order, or (iii) other persons to whom it may otherwise be lawfully communicated (all such persons together being
referred to as “relevant persons”). Persons who are not relevant persons should not take any action on the basis of this
announcement and should not act or rely on it.

This announcement has been issued by and is the sole responsibility of Aveng. No representation or warranty, express
or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the advisers
or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement
or any other written or oral information made available to or publicly available to any interested party or its advisers, and
any liability therefore is expressly disclaimed.

This announcement does not purport to identify or suggest the risks (direct or indirect) which may be associated with an
investment in the securities. Any investment decision to buy securities in the Rights Offer must be made solely on the
basis of publicly available information which has not been independently verified by Rand Merchant Bank (A division of
FirstRand Bank Limited).

Rand Merchant Bank (A division of FirstRand Bank Limited) is acting for Aveng and no one else, in connection with the
Rights Offer and will not be responsible to anyone other than Aveng for providing the protections offered to clients of the
advisers, nor for providing advice in relation to the Rights Offer.

Date: 05/06/2018 05:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.