Cash Converters International Limited Entitlement Offer Booklet 1 for 4 pro rata non-renounceable entitlement offer of Cash Converters ordinary shares at $0.32 per New Share
Entitlement Offer closes: 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018
If you are an Eligible Shareholder, this is an important document that requires your immediate attention. It should be read in its entirety. This document is not a prospectus under the Corporations Act and has not been lodged with the Australian Securities and Investments Commission. You should consult your stockbroker, accountant, financial adviser, solicitor or other professional adviser if you have any questions.
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
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IMPORTANT NOTICES that a product disclosure statement under New Zealand law is required to This Entitlement Offer Booklet is dated 30 May 2018 and relates to the contain. Entitlement Offer by Cash Converters to raise approximately $39.5 million. United States disclaimer Capitalised terms in this section have the meaning given to them in this None of the information in this Entitlement Offer Booklet or the accompanying Entitlement Offer Booklet. Entitlement and Acceptance Form constitutes an offer to sell, or the solicitation This Entitlement Offer Booklet has been issued by Cash Converters of an offer to buy, any securities in the United States. Neither this Entitlement International Limited (ACN 069 141 546) (Cash Converters). Offer Booklet (or any part of it), the accompanying ASX Announcements nor the accompanying Entitlement and Acceptance Form may be released or The Entitlement Offer is made pursuant to section 708AA of the Corporations distributed, directly or indirectly, in the United States. Act 2001 (Cth) (Corporations Act) (as notionally modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84). This The Entitlements and the New Shares have not been, and will not be, Entitlement Offer Booklet is not a prospectus or a product disclosure statement registered under the U.S. Securities Act of 1933, as amended (U.S. Securities under the Corporations Act and has not been lodged with ASIC. This Act) or the securities laws of any state or other jurisdiction of the United Entitlement Offer Booklet does not contain all of the information which would States. The Entitlements may not be taken up or exercised by persons in the be required to be disclosed in a prospectus or product disclosure statement. United States, and the New Shares may not be offered or sold, directly or As a result, it is important for you to read and understand the publicly available indirectly, to persons in the United States, except in transactions exempt from, information on Cash Converters and the Entitlement Offer (for example, the or not subject to, the registration requirements of the U.S. Securities Act and information available on Cash Converters’ website at applicable securities laws of any state or other jurisdiction of the United States. http://www.cashconverters.com.au/ or on the ASX’s website at www.asx.com) Definitions, time and currency prior to deciding whether to accept your Entitlement and apply for New Shares. Defined terms used in this Entitlement Offer Booklet are contained in The information in this Entitlement Offer Booklet does not constitute financial Section 6. All references to time are to Perth time, unless otherwise indicated. product advice and does not take into account your investment objectives, financial situation or particular needs. All references to ‘$’ are AUD unless otherwise noted. Please contact your professional advisor or the Cash Converters Offer Taxation Information Line on 1300 653 310 (within Australia) or +61 3 9415 4000 There will be tax implications associated with participating in the Entitlement (outside Australia) between 6.30am and 3:00pm (Perth time) / 8:30am and Offer and receiving New Shares. Section 5 provides for a general guide to the 5:00pm (AEST) on Monday to Friday before the Entitlement Offer closes Australian income tax, goods and services tax and stamp duty implications of at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018 if you have any the Entitlement Offer for Eligible Shareholders. The guide does not take questions. account of the individual circumstances of particular Eligible Shareholders and This Entitlement Offer Booklet should be read in its entirety (including the does not constitute tax advice. Cash Converters recommends that you consult accompanying Entitlement and Acceptance Form) before you decide to your professional tax adviser in connection with the Entitlement Offer. participate in the Entitlement Offer. In particular, the Investor Presentation in Privacy Section 3 of this Entitlement Offer Booklet details important factors and risks Cash Converters collects information about each Applicant provided on an that could affect the financial and operating performance of Cash Converters. Entitlement and Acceptance Form for the purposes of processing the Please refer to the ’Key risks’ sections of the Investor Presentation for details. Application and, if the Application is successful, to administer the Applicant's When making an investment decision in connection with the Entitlement Offer, shareholding in Cash Converters. it is essential that you consider these risk factors carefully in light of your individual personal circumstances, including financial and taxation issues By submitting an Entitlement and Acceptance Form, you will be providing (some of which have been outlined in Section 5 of this Entitlement Offer personal information to Cash Converters (directly or through the Share Booklet). Registry). Cash Converters collects, holds and will use that information to assess your Application. Cash Converters collects your personal information to In addition to reading this Entitlement Offer Booklet in conjunction with Cash process and administer your shareholding in Cash Converters and to provide Converters’ other periodic and continuous disclosure announcements including related services to you. Cash Converters may disclose your personal the Investor Presentation and Cash Converters’ announcements to the ASX information for purposes related to your shareholding in Cash Converters, and on its website, you should conduct your own independent review, including to the Share Registry, Cash Converters’ related bodies corporate, investigations and analysis of Cash Converters and the New Shares and obtain any professional advice you require to evaluate the merits and risks of agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX and regulatory bodies. You can obtain an investment in Cash Converters before making any investment decision. access to personal information that Cash Converters holds about you. To By returning an Entitlement and Acceptance Form or otherwise paying for your make a request for access to your personal information held by (or on behalf New Shares through BPAY® in accordance with the instructions on the of) Cash Converters, please contact Cash Converters through the Share Entitlement and Acceptance Form, you acknowledge that you have read this Registry. Entitlement Offer Booklet and you have acted in accordance with and agree to Governing law the terms of the Entitlement Offer detailed in this Entitlement Offer Booklet. This Entitlement Offer Booklet, the Entitlement Offer and the contracts formed No overseas offering on acceptance of the Applications are governed by the law of Western This Entitlement Offer Booklet and the accompanying Entitlement and Australia, Australia. Each Applicant submits to the exclusive jurisdiction of the Acceptance Form do not constitute an offer or invitation in any place in which, courts of Western Australia, Australia. or to any person to whom, it would not be lawful to make such an offer or No representations invitation. In particular, this Entitlement Offer Booklet does not constitute an offer to Ineligible Shareholders. No person is authorised to give any information or to make any representation in connection with the Entitlement Offer which is not contained in this This Entitlement Offer Booklet is not to be distributed in, and no offer of New Entitlement Offer Booklet. Any information or representation in connection with Shares is to be made, in countries other than Australia and New Zealand. the Entitlement Offer not contained in the Entitlement Offer Booklet may not be No action has been taken to register or qualify the Entitlement Offer, the relied upon as having been authorised by Cash Converters or any of its Entitlements or the New Shares, or otherwise permit the public offering of the officers. New Shares, in any jurisdiction other than Australia and New Zealand. Past performance The distribution of this Entitlement Offer Booklet (including an electronic copy) Investors should note that Cash Converters’ past performance, including past outside Australia and New Zealand, is restricted by law. If you come into share price performance, cannot be relied upon as an indicator of (and possession of the information in this Entitlement Offer Booklet, you should provides no guarantee or guidance as to) Cash Converters’ future observe such restrictions and should seek your own advice on such performance including Cash Converters’ future financial position or share price restrictions. Any non-compliance with these restrictions may contravene performance. applicable securities laws. Future performance Foreign exchange control restrictions or restrictions on remitting funds from This Entitlement Offer Booklet contains certain forward looking statements with your country to Australia may apply. Your Application for New Shares is respect to the financial condition, results of operations, projects and business subject to all requisite authorities and clearances being obtained for Cash of Cash Converters and certain plans and objectives of the management of Converters to lawfully receive your Application Monies. Cash Converters. Forward looking statements include those containing words New Zealand such as: "anticipate", "believe", "expect", "estimate", "should", “will", "plan", The New Shares are not being offered to the public within New Zealand other "could", "may" "intends", "guidance", "project", "forecast", "target", "likely" and than to existing shareholders of Cash Converters with registered addresses in other similar expressions, and include, but are not limited to, statements New Zealand to whom the offer of these securities is being made in reliance regarding outcome and effects of the Entitlement Offer. Any forward looking on the Financial Markets Conduct Act 2013 and the Financial Markets Conduct statements, opinions and estimates provided in this Entitlement Offer Booklet (Incidental Offers) Exemption Notice 2016. are based on assumptions and contingencies which are subject to change without notice and involve known and unknown risks and uncertainties and This document has been prepared in compliance with Australian law and has other factors which are beyond the control of Cash Converters’ and the Lead not been registered, filed with or approved by any New Zealand regulatory Manager Parties (defined below). This includes any statements about market authority. This document is not a product disclosure statement under New and industry trends, which are based on interpretations of current market Zealand law and is not required to, and may not, contain all the information conditions. Forward looking statements may include projections, guidance on future revenues, earnings, dividends and estimates. 2
These forward-looking statements contained in this Entitlement Offer Booklet believe will be issued to them before they receive their holding statements, involve known and unknown risks, uncertainties and other factors which are whether on the basis of confirmation of the allocation provided by Cash subject to change without notice, and may involve significant elements of Converters or the Share Registry or otherwise, or who otherwise trade or subjective judgement and assumptions as to future events which may or may purport to trade New Shares in error or which they do not hold or are not not be correct. entitled to. Forward-looking statements are provided as a general guide only and there No Entitlements trading can be no assurance that actual outcomes will not differ materially from these Entitlements are non-renounceable and cannot be traded on ASX or any other statements. Neither Cash Converters, nor any other person, gives any exchange, nor can they be privately transferred. representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually Disclaimer of representations occur. In particular, such forward-looking statements are subject to significant No person is authorised to give any information, or to make any uncertainties and contingencies, many of which are outside the control of Cash representation, in connection with the Entitlement Offer that is not contained in Converters. A number of important factors could cause actual results or this Entitlement Offer Booklet. performance to differ materially from the forward looking statements. Investors Any information or representation that is not in this Entitlement Offer Booklet should consider the forward looking statements contained in this Entitlement may not be relied on as having been authorised by Cash Converters, or its Offer Booklet in light of those disclosures. related bodies corporate in connection with the Entitlement Offer. The forward looking statements are based on information available to Cash Converters as at the date of this Entitlement Offer Booklet. Except as required by law or regulation (including the Listing Rules), Cash Converters is under no If you are in any doubt as to these matters, you should first consult with your obligation to provide any additional or updated information whether as a result stockbroker, accountant, financial adviser, solicitor or other professional of new information, future events or results or otherwise. adviser. None of the Lead Manager Parties have authorised, approved or verified any forward-looking statements. Lead Manager Hartleys Limited ACN 104 195 057 (Lead Manager) has acted as lead manager to the Entitlement Offer and will underwrite the Entitlement Offer (other than in respect of the EZCORP Commitment). Neither the Lead Manager, nor any of their affiliates, related bodies corporate (as that term is defined in the Corporations Act), nor their respective directors, employees, officers, representatives, agents, partners, consultants and advisers (together the Lead Manager Parties), nor the advisers to Cash Converters or any other person including clients named in this document, have authorised, permitted or caused the issue or lodgement, submission, dispatch or provision of this Entitlement Offer Booklet (or any other materials released by Cash Converters) and none of them makes or purports to make any statement in this Entitlement Offer Booklet and there is no statement in this Entitlement Offer Booklet which is based on any statement by any of them. The Lead Manager Parties may, from time to time, hold interests in the securities of, or earn brokerage, fees or other benefits from Cash Converters. Disclaimer Determination of eligibility of investors for the purposes of the Entitlement Offer is determined by reference to a number of matters, including legal and regulatory requirements, logistical and registry constraints and the discretion of Cash Converters and the Lead Manager. To the maximum extent permitted by law, each of Cash Converters and the Lead Manager and each of their respective affiliates disclaim any duty or liability (including for negligence) in respect of that determination and the exercise or otherwise of that discretion. To the maximum extent permitted by law, the Lead Manager Parties disclaim all liability for any expenses, losses, damages or costs incurred by you as a result of your participation in the Entitlement Offer and the information in this Entitlement Offer Booklet being inaccurate or due to information being omitted from this Entitlement Offer Booklet, whether by way of negligence or otherwise, and make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this Entitlement Offer Booklet. The Lead Manager Parties take no responsibility for any part of this Entitlement Offer Booklet or liability (including, without limitation, any liability arising from fault or negligence on the part of any person) for any direct, indirect, consequential or contingent loss or damage whatsoever arising from the use of any part of this Entitlement Offer Booklet or otherwise arising in connection with either of them. The Lead Manager Parties make no recommendation as to whether you or your related parties should participate in the Entitlement Offer nor do they make any representations or warranties, express or implied, to you concerning the Entitlement Offer or any such information, and by returning an Entitlement and Acceptance Form or otherwise paying for your New Shares through BPAY® in accordance with the instructions on the Entitlement and Acceptance Form, you represent, warrant and agree that you have not relied on any statements made by the Lead Manager Parties in relation to the New Shares or the Entitlement Offer generally. Risks Refer to the ’Key risks’ section of the Investor Presentation included in Section 3 of this Entitlement Offer Booklet for a summary of general and specific risk factors that may affect Cash Converters. You should consider these risks carefully in light of your personal circumstances, including financial and taxation issues, before making an investment decision in connection with the Entitlement Offer. No cooling off Cooling off rights do not apply to an investment in New Shares. You cannot withdraw an Application once it has been accepted. Trading New Shares Cash Converters will have no responsibility and disclaims all liability (to the maximum extent permitted by law) to persons who trade New Shares they 3
Chairman’s letter Dear Shareholder As a valued Shareholder of Cash Converters International Limited (Cash Converters), I am pleased to invite you to participate in the recently announced 1 for 4 non-renounceable pro-rata entitlement offer for new Cash Converters ordinary shares (New Shares) at an issue price of $0.32 per New Share to raise approximately $39.5 million (Entitlement Offer). Purpose of the Entitlement Offer The net proceeds of the Entitlement Offer, together with existing cash and cash equivalents, will be used to repay the FIIG bond and for working capital to fund future growth opportunities. More detail is provided in Cash Converters’ Investor Presentation announced to the Australian Securities Exchange (ASX) today (and included in Section 3 of this Entitlement Offer Booklet). Entitlement Offer Under the Entitlement Offer, Eligible Shareholders have the opportunity to subscribe for 1 New Share for every 4 ordinary shares in Cash Converters held at 5.00pm (Perth time) / 7:00pm (AEST) on 4 June 2018 (Entitlement) at the price of $0.32 per New Share. The issue price of $0.32 per New Share represents an approximately 10.1% discount to the theoretical ex-rights price1 of $0.356 on 28 May 2018. Under the Entitlement Offer, Eligible Shareholders that take up their full Entitlement may also apply for additional New Shares in excess of their Entitlement up to a maximum of 50% of their Entitlement (Cap) at the Offer Price (Oversubscription Facility). Additional New Shares will only be available under the Oversubscription Facility to the extent that there are Entitlements under the Entitlement Offer that are not taken up by Eligible Shareholders. Cash Converters retains the flexibility to scale back applications for additional New Shares at its discretion (refer to Section 2.5 of this Entitlement Offer Booklet for further information). Cash Converters’ major shareholder, EZCORP has committed to take up its full Entitlement (of approximately $12.5 million worth of New Shares) and to apply for up to a further approximately $6 million worth of New Shares either under the Oversubscription Facility (described below) or through an application for shortfall (or a combination of both) (EZCORP Commitment). Any New Shares issued to EZCORP in excess of both its Entitlement and its application under the Oversubscription Facility will be allocated to EZCORP in priority to the Lead Manager and any sub-underwriters appointed by it. The EZCORP Commitment is conditional on the underwriting agreement between the Lead Manager and Cash Converters not being terminated. The Entitlement Offer is arranged and underwritten (other than in respect of the EZCORP Commitment) by Hartleys Limited (Lead Manager). The Lead Manager has agreed to underwrite $21 million worth of New Shares under the Entitlement Offer. This underwriting is incremental to the EZCORP Commitment of $18.5 million of New Shares. The Entitlement Offer is non-renounceable and the Entitlements will not be tradeable on the ASX or otherwise transferable. Shareholders who do not take up their Entitlement in full will not receive any value in respect of those Entitlements they do not take up. I encourage you to consider this offer carefully. Other Information This Entitlement Offer Booklet contains important information, including: • the Investor Presentation referred to above, which was released to the ASX on 30 May 2018, and provides information on Cash Converters, the Entitlement Offer and key risks for you to consider; • instructions on how to apply, detailing how to participate in the Entitlement Offer if you choose to do so; and
1 The theoretical ex-rights price (TERP) is the theoretical price at which Cash Converters shares should trade at immediately after the ex-date for the Entitlement Offer. The TERP is a theoretical calculation only and the actual price at which Cash Converters shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not equal TERP. TERP is calculated by reference to Cash Converters’ closing price of $0.365 on 28 May 2018.
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• key dates for the Entitlement Offer. A personalised Entitlement and Acceptance Form which details your Entitlement, to be completed in accordance with the instructions contained therein, accompanies this Entitlement Offer Booklet. The Entitlement Offer closes at 5.00pm (Perth time) / 7:00pm (AEST) on 18 June 2018. Please read in full the details on how to submit your Application, which are set out in this Entitlement Offer Booklet in Section 2. If you require further assistance, please do not hesitate to contact the Cash Converters Offer Information Line on 1300 653 310 (within Australia) or +61 3 9415 4000 (outside Australia) between 6:30am and 3:00pm (Perth time) / 8:30am and 5:00pm (AEST) Monday to Friday, before the Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST). If you are uncertain about taking up your Entitlement, you should also consult your stockbroker, accountant, financial adviser, solicitor or other professional adviser to evaluate whether or not to participate in the Entitlement Offer. On behalf of the board of Cash Converters, I encourage you to consider this investment opportunity and thank you for your ongoing support of Cash Converters. Yours sincerely
Stuart Grimshaw Non-Executive Chairman
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Summary of the Entitlement Offer Entitlement Offer Ratio 1 New Share for every 4 Existing Shares Offer Price $0.32 per New Share Size Approximately 123.3 million New Shares Gross proceeds Approximately $39.5 million
Key dates
Activity Date Announcement of the Entitlement Offer 30 May 2018 Record Date for Entitlement Offer (5:00pm Perth time / 7:00pm 4 June 2018 AEST) Entitlement Offer opens 5 June 2018 Entitlement Offer Booklet and Entitlement and Acceptance 5 June 2018 Form despatched Entitlement Offer closes (5:00pm Perth time / 7:00pm 18 June 2018 (AEST)) Commencement of trading of New Shares on a deferred 19 June 2018 settlement basis Allotment of New Shares under the Entitlement Offer 26 June 2018 New Shares commence trading on a normal settlement basis 27 June 2018
Despatch of holding statements for New Shares issued under the Entitlement Offer
This Timetable above is indicative only and may change. Cash Converters reserves the right to amend any or all of these dates and times subject to the Corporations Act, the Listing Rules and other applicable laws. In particular, Cash Converters reserves the right to extend the closing date for the Entitlement Offer, to accept late Applications under the Entitlement Offer (either generally or in particular cases) and to withdraw the Entitlement Offer without prior notice. Any extension of the closing date will have a consequential effect on the allotment date of New Shares. Cash Converters also reserves the right not to proceed with the Entitlement Offer in whole or in part at any time prior to allotment and issue of the New Shares. In that event, the relevant Application Monies (without interest) will be returned in full to Applicants.
Enquiries
Cash Converters Offer Information Line: 1300 653 310 (within Australia) or +61 3 9415 4000 (outside Australia) between 6:30am and 3:00pm (Perth time) / 8:30am and 5:00pm (AEST) on Monday to Friday, before the Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018.
Alternatively, contact your stockbroker, accountant, financial adviser, solicitor or other professional adviser.
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Table of contents
Chairman’s letter ------4
Summary of the Entitlement Offer ------6
Key dates ------6
Enquiries------6
1 Summary of options available to you ------9
2 How to apply ------10 2.1 Overview 10 2.2 Entitlement Offer 10 2.3 Your Entitlement 11 2.4 Options available to you 11 2.5 Taking up all of your Entitlement or taking up all of your Entitlement and participating the Oversubscription Facility 11 2.6 Taking up part of your Entitlement and allowing the balance to lapse 12 2.7 Allowing your Entitlement to lapse 12 2.8 Consequences of not taking up all or part of your Entitlement 12 2.9 Payment 12
2.10 Payment by BPAY® 13 2.11 Payment by cheque, bank draft or money order 13 2.12 Entitlement and Acceptance Form is binding 14 2.13 Brokerage and stamp duty 16 2.14 Notice to nominees and custodians 16 2.15 Withdrawal of the Entitlement Offer 16 2.16 Enquiries 16
3 ASX Announcements and Investor Presentation------17
4 Additional information ------18 4.1 Eligibility of Shareholders 18 4.2 Ranking of New Shares 18 4.3 Allotment 18 4.4 Reconciliation 18 4.5 Underwriting arrangements 19 4.6 Lead Manager 20
5 Australian taxation consequences ------22 5.1 General 22 5.2 Issue of Entitlement 23 5.3 Exercise of Entitlement and applying for additional New Shares 23 5.4 Lapse of Entitlement 23
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5.5 Taxation in respect of dividends on New Shares 23 5.6 Disposal of New Shares 23 5.7 Non-resident CGT withholding 24 5.8 Provision of Tax File Number (TFN) or Australian Business Number (ABN) 24 5.9 GST 24 5.10 Stamp duty 24
6 Definitions ------25
7 Corporate information ------28
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1 Summary of options available to you
If you are an Eligible Shareholder2, you may take one of the following actions: • take up all of your Entitlement, and if you do so, also apply for additional New Shares under the Oversubscription Facility; • take up part of your Entitlement and allow the balance to lapse; or • do nothing, in which case your Entitlement will lapse and you will receive no value for those lapsed Entitlements.
The Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018.
If you are a Shareholder that is not an Eligible Shareholder, you are an “Ineligible Shareholder”. Ineligible Shareholders are not entitled to participate in the Entitlement Offer. See Section 4.1 for further details.
Options available to you Key considerations 1. Take up all of your Entitlement • You may elect to purchase New Shares at the Offer Price (see Section 2 “How to Apply” for instructions on how to take up your Entitlement). • The New Shares will rank equally in all respects with Existing Shares. • If you take up all of your Entitlement, you may also apply for additional New Shares under the Oversubscription Facility up to the Cap (see Section 2.5 for instructions on how to apply for additional New Shares). There is no guarantee that you will be allocated any additional New Shares under the Oversubscription Facility. 2. Take up part of your Entitlement • If you do not take up your Entitlement in full, those Entitlements not taken up will lapse and you will not receive any payment or value for them. • You will not be entitled to apply for additional New Shares under the Oversubscription Facility. • If you do not take up your Entitlement in full, you will have your percentage holding in Cash Converters reduced as a result of the Entitlement Offer. 3. Do nothing, in which case your • If you do not take up your Entitlement, you will not be Entitlement will lapse and you will allocated New Shares and your Entitlement will lapse. receive no value for those lapsed Your Entitlement to participate in the Entitlement Offer is Entitlements non-renounceable, which means your Entitlements are non-transferrable and cannot be sold, traded on ASX or any other exchange, nor can they be privately transferred. • If you do not take up your Entitlement you will have your percentage holding in Cash Converters reduced as a result of the Entitlement Offer.
2 See Section 4.1.
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2 How to apply
2.1 Overview
The Entitlement Offer is underwritten (other than in respect of the EZCORP Commitment), and Cash Converters intends to raise approximately $39.5 million. Under the Entitlement Offer, Cash Converters is offering Eligible Shareholders the opportunity to subscribe for 1 New Share for every 4 Existing Shares held on the Record Date. The Offer Price per New Share is $0.32.
The Entitlement Offer is non-renounceable, which means that the Entitlements cannot be traded or otherwise transferred on the ASX or any other exchange or privately. If you do not participate in the Entitlement Offer, you will not receive any value for your Entitlement.
Please refer to the ASX Announcements and the Investor Presentation3 included in this Entitlement Offer Booklet for information on the rationale for the Entitlement Offer, the use of proceeds of the Entitlement Offer and for further information on Cash Converters.
2.2 Entitlement Offer
The Entitlement Offer is being made pursuant to section 708AA of the Corporations Act (as modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84) which allows rights issues to be offered without a prospectus, provided certain conditions are satisfied.
Eligible Shareholders are being invited to subscribe for all or part of their Entitlement and are being sent this Entitlement Offer Booklet with a personalised Entitlement and Acceptance Form.
Eligible Shareholders who take up all of their Entitlement may also apply for additional New Shares in excess of their Entitlement up to the Cap, being a maximum of 50% of their Entitlement pursuant to the Oversubscription Facility.
The Entitlement Offer constitutes an offer only to Eligible Shareholders (see Section 4.1 for further details about Eligible Shareholders). A person in the United States or acting for the account or benefit of a person in the United States (other than EZCORP) is not entitled to participate in the Entitlement Offer.
Eligibility of Shareholders for the purposes of the Entitlement Offer is determined by reference to a number of matters, including legal requirements, logistical and registry constraints, and the discretion of Cash Converters. Cash Converters and the Lead Manager disclaim any liability in respect of eligibility determinations, including the exercise or otherwise of a discretion, to the maximum extent permitted by law.
Pursuant to the EZCORP Commitment, EZCORP has committed to take up its full Entitlement (of approximately $12.5 million worth of New Shares) and to apply for up to a further approximately $6 million worth of New Shares either under the Oversubscription Facility or through an application for shortfall (or a combination of both). Any New Shares issued to EZCORP in excess of both its Entitlement and its application under the Oversubscription Facility will be allocated to EZCORP in priority to the Lead Manager and any sub-underwriters appointed by it. The EZCORP Commitment is conditional on the underwriting agreement between the Lead Manager and Cash Converters not being terminated.
The Entitlement Offer is underwritten (other than in respect of the EZCORP Commitment) and seeks to raise approximately $39.5 million.
The Entitlement Offer opens on 5 June 2018 and is expected to close at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018.
3 The ASX Announcements and the Investor Presentation are current as at 30 May 2018. There may be other announcements that have been made by Cash Converters after 30 May 2018 and, before the Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018 that may be relevant in your consideration of whether to take part in the Entitlement Offer. Therefore, it is prudent that you check whether any further announcements have been made by Cash Converters before submitting an Application.
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2.3 Your Entitlement
An Entitlement and Acceptance Form setting out your Entitlement (calculated as 1 New Share for every 4 Shares held on the Record Date with fractional entitlements rounded up to the nearest whole number of New Shares) accompanies this Entitlement Offer Booklet. Eligible Shareholders may subscribe for all or part of their Entitlement. If you have more than one registered holding of Shares, you will be sent more than one personalised Entitlement and Acceptance Form and you will have separate Entitlements for each separate holding.
Eligible Shareholders should be aware that an investment in Cash Converters involves risk. The key risks identified by Cash Converters are set out in the section entitled ‘Key risks’ from page 18 of the Investor Presentation (enclosed in Section 3).
2.4 Options available to you
The number of New Shares to which Eligible Shareholders are entitled is shown on the accompanying Entitlement and Acceptance Form. Eligible Shareholders may:
(a) take up their Entitlement in full and, if they do so, they may apply for additional New Shares under the Oversubscription Facility (refer to Section 2.5);
(b) take up part of their Entitlement, in which case the balance of the Entitlement would lapse (refer to Section 2.6); or
(c) allow their Entitlement to lapse (refer to Section 2.7).
Ineligible Shareholders may not participate in the Entitlement Offer.
Cash Converters reserves the right to reject any Entitlement and Acceptance Form that is not correctly completed or that is received after the Closing Date.
The Closing Date for acceptance of the Entitlement Offer is 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018 (however, that date may be varied by Cash Converters, in accordance with the Listing Rules and the Underwriting Agreement).
2.5 Taking up all of your Entitlement or taking up all of your Entitlement and participating the Oversubscription Facility
If you wish to take up all or part of your Entitlement, you are encouraged to make payment via BPAY® by following the instructions set out on the personalised Entitlement and Acceptance Form. Payment is due by no later than 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018. If you are a New Zealand Shareholder who does not have an Australian bank account or do not wish to pay via BPAY®, you may make payment by cheque, bank draft or money order, as set out in Section 2.11 below.
If you apply to take up all of your Entitlement, you may also apply for additional New Shares under the Oversubscription Facility. Any Application Monies received for more than your full Entitlement of New Shares will be treated as applying for as many additional New Shares as it will pay for in full, subject to the Cap referred to in Section 2.2 above.
If you apply for additional New Shares under the Oversubscription Facility, and if your application is successful (in whole or in part), your additional New Shares will be issued to you at the same time and on the same terms that other New Shares are issued under the Entitlement Offer. Additional New Shares will only be allocated to Eligible Shareholders if available and then up an additional 50% of their Entitlement. If you apply for additional New Shares, there is no guarantee that you will be allocated any additional New Shares.
Any New Shares referable to Entitlements not taken up by the Closing Date may be made available to those Eligible Shareholders who took up their full Entitlement and applied for additional New Shares under the Oversubscription Facility up to an additional 50% of their Entitlement. There is no guarantee that such Shareholders will receive the number of additional New Shares applied for under the Oversubscription Facility, or any. Additional New Shares will
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only be allocated to Eligible Shareholders if available and subject to the Cap referred to in Section 2.2. Cash Converters will scale back applications for additional New Shares in its absolute discretion having regard to the pro rata Entitlement of Eligible Shareholders who apply for additional New Shares.
No interest will be paid to applicants on any Application Monies received or refunded. Refund amounts, if any, will be paid in Australian dollars. You will be paid either by direct credit to the nominated bank account as noted on the share register as at the Closing Date or by cheque sent by ordinary post to your address as recorded on the share register (the registered address of the first-named in the case of joint holders). If you wish to advise or change your banking instructions with the Share Registry you may do so by going to www.investorcentre.com and logging into the Investor Centre.
2.6 Taking up part of your Entitlement and allowing the balance to lapse
If you wish to take up part of your Entitlement, you are encouraged to make payment via BPAY® by following the instructions set out on the personalised Entitlement and Acceptance Form. If you are a New Zealand Shareholder who does not have an Australian bank account or do not wish to pay via BPAY®, you may make payment by cheque, bank draft or money order, as set out in Section 2.11 below. If Cash Converters receives an amount that is less than the Offer Price multiplied by your Entitlement, your payment may be treated as an Application for as many New Shares as your Application Monies will pay for in full.
2.7 Allowing your Entitlement to lapse
If you do not wish to take up all or any part of your Entitlement, do not take any further action and all or that part of your Entitlement will lapse.
2.8 Consequences of not taking up all or part of your Entitlement
If you do not take up all or part of your Entitlement in accordance with the instructions set out above, your Entitlements will lapse and those New Shares for which you would have otherwise been entitled under the Entitlement Offer (including New Shares that relate to the portion of your Entitlement that has not been taken up) may be acquired by the Lead Manager or sub- underwriters, or by Eligible Shareholders under the Oversubscription Facility.
By allowing your Entitlement to lapse, you will forgo any exposure to increases or decreases in the value of the New Shares had you taken up your Entitlement and you will not receive any value for your Entitlement. Your interest in Cash Converters will also be diluted to the extent that New Shares are issued under the Entitlement Offer.
2.9 Payment
You are encouraged to pay your Application Monies using BPAY® if possible. Shareholders who do not have an Australian bank account and other shareholders who do not wish to pay using BPAY® will be able to pay by cheque, bank draft or money order (refer to Section 2.11 below).
Cash payments will not be accepted. Receipts for payment will not be issued.
Cash Converters will treat you as applying for as many New Shares as your payment will pay for in full up to your Entitlement, and in respect of any excess amount applying for as many additional New Shares under the Oversubscription Facility as it will pay for in full, subject to the Cap referred to in Section 2.2 above.
Any Application Monies received for more than your final allocation of New Shares will be refunded as soon as practicable after the close of the Entitlement Offer. No interest will be paid to Applicants on any Application Monies received or refunded.
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2.10 Payment by BPAY®
For payment by BPAY®, please follow the instructions on the personalised Entitlement and Acceptance Form. You can only make payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions.
If you are paying by BPAY®, please make sure you use the specific Biller Code and your unique Customer Reference Number (CRN) on your personalised Entitlement and Acceptance Form. If you have multiple holdings and consequently receive more than one personalised Entitlement and Acceptance Form, when taking up your Entitlement in respect of one of those holdings only use the CRN specific to that holding. If you do not use the correct CRN specific to that holding your Application will not be recognised as valid.
Please note that by paying by BPAY®:
(a) you do not need to submit your personalised Entitlement and Acceptance Form but are taken to make the declarations, representations and warranties on that Entitlement and Acceptance Form and in Section 2.12; and
(b) if you do not pay for your full Entitlement, you are deemed to have taken up your Entitlement in respect of such whole number of New Shares which is covered in full by your Application Monies.
It is your responsibility to ensure that your BPAY® payment is received by the Share Registry by no later than 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018. You should be aware that your financial institution may implement earlier cut-off times with regard to electronic payment, and you should therefore take this into consideration in the timing of when you make payment.
2.11 Payment by cheque, bank draft or money order
Cash Converters encourages payments by BPAY® if possible.
If you are intending to pay by cheque, bank draft or money order you should complete your personalised Entitlement and Acceptance Form in accordance with the instructions on the form and return it accompanied by a cheque, bank draft or money order in Australian currency for the amount of the Application Monies, payable to “Cash Converters International Limited” and crossed “Not Negotiable”.
It is your responsibility to ensure that your payment by cheque, bank draft or money order is received by the Share Registry by no later than 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018. You must ensure that cleared funds are held in your account as your cheque, bank draft or money order will be banked as soon as it is received. You should consider postal and cheque clearance timeframes in order to meet this deadline.
Your cheque, bank draft or money order must be:
(a) for an amount equal to $0.32 multiplied by the number of New Shares (and additional New Shares under the Oversubscription Facility, if applicable) that you are applying for; and
(b) in Australian currency drawn on an Australian branch of a financial institution. Payment cannot be made in New Zealand dollars. New Zealand resident Shareholders must arrange for payment to be made in Australian dollars.
Please return your completed Entitlement and Application Form and cheque, bank draft or money order to the Share Registry at the address below:
Mailing Address Cash Converters International Limited C/- GPO Box 505 Melbourne VIC 3001
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You should ensure that sufficient funds are held in relevant account(s) to cover the Application Monies as your cheque, bank draft or money order will be processed on the day of receipt. If the amount of your cheque, bank draft or money order for Application Monies (or the amount for which the cheque, bank draft or money order clears in time for allocation) is insufficient to pay in full for the number of New Shares you have applied for in your personalised Entitlement and Acceptance Form, you will be taken to have applied for such lower whole number of New Shares and additional New Shares under the Oversubscription Facility, if applicable, as your cleared Application Monies will pay for (and to have specified that number of New Shares on your personalised Entitlement and Acceptance Form). Alternatively, your Application will not be accepted.
2.12 Entitlement and Acceptance Form is binding
A payment made through BPAY® or a completed and lodged Entitlement and Acceptance Form together with the payment of requisite Application Monies constitutes a binding offer to acquire New Shares on the terms and conditions set out in this Entitlement Offer Booklet and, once lodged or paid, cannot be withdrawn. If the Entitlement and Acceptance Form is not completed correctly it may still be treated as a valid Application for New Shares. Cash Converters’ decision whether to treat an acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.
By making a payment by BPAY® or by completing and returning your personalised Entitlement and Acceptance Form with the requisite Application Monies, you will also be deemed to have acknowledged, represented and warranted on behalf of each person on whose account you are acting that:
(a) you have received, and read and understand this Entitlement Offer Booklet and your personalised Entitlement and Acceptance Form in their entirety;
(b) you are an Eligible Shareholder;
(c) you agree to be bound by the terms of the Entitlement Offer, the provisions of this Entitlement Offer Booklet, and Cash Converters’ constitution;
(d) you authorise Cash Converters to register you as the holder(s) of New Shares allotted to you under the Entitlement Offer;
(e) all details and statements in the personalised Entitlement and Acceptance Form are complete, accurate and up to date;
(f) if you are a natural person, you are over 18 years of age and have full legal capacity and power to perform all of your rights and obligations under the personalised Entitlement and Acceptance Form;
(g) you accept that there is no cooling off period under the Entitlement Offer and that once Cash Converters receives your personalised Entitlement and Acceptance Form or any payment of Application Monies via BPAY®, you may not withdraw your Application or funds provided except as allowed by law;
(h) you agree to apply for and be issued up to the number of New Shares specified in the personalised Entitlement and Acceptance Form, or for which you have submitted payment of any Application Monies via BPAY®, at the Offer Price;
(i) you authorise Cash Converters, the Lead Manager, the Share Registry and their respective officers or agents to do anything on your behalf necessary for New Shares to be issued to you, including to act on instructions of the Share Registry upon using the contact details set out in your personalised Entitlement and Acceptance Form;
(j) you acknowledge and agree that:
(i) determination of eligibility of investors for the purposes of the Entitlement Offer is determined by reference to a number of matters, including legal and regulatory
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requirements, logistical and registry constraints and the discretion of Cash Converters and the Lead Manager; and
(ii) each of Cash Converters and the Lead Manager, and each of their respective affiliates, disclaim any duty or liability (including for negligence) in respect of that determination and the exercise or otherwise of that discretion, to the maximum extent permitted by law;
(k) you declare that you were the registered holder(s) at the Record Date of the Shares indicated on the personalised Entitlement and Acceptance Form as being held by you on the Record Date;
(l) the information contained in this Entitlement Offer Booklet and your personalised Entitlement and Acceptance Form is not investment advice nor a recommendation that New Shares are suitable for you given your investment objectives, financial situation or particular needs;
(m) this Entitlement Offer Booklet is not a prospectus, does not contain all of the information that you may require in order to assess an investment in Cash Converters and is given in the context of Cash Converters’ past and ongoing continuous disclosure announcements to ASX;
(n) you acknowledge the statement of risks in the ‘Key risks’ section of the Investor Presentation included in Section 3 of this Entitlement Offer Booklet, and that investments in Cash Converters are subject to risk;
(o) none of Cash Converters, the Lead Manager, or their respective related bodies corporate and affiliates and their respective directors, officers, partners, employees, representatives, agents, consultants or advisers, guarantees the performance of the New Shares or the performance of Cash Converters, nor do they guarantee the repayment of capital from Cash Converters;
(p) you agree to provide (and direct your nominee or custodian to provide) any requested substantiation of your eligibility to participate in the Entitlement Offer and of your holding of Shares on the Record Date;
(q) you authorise Cash Converters to correct any errors in your personalised Entitlement and Acceptance Form or other form provided by you;
(r) the law of any place does not prohibit you from being given this Entitlement Offer Booklet and the personalised Entitlement and Acceptance Form, nor does it prohibit you from making an Application for New Shares and that you are otherwise eligible to participate in the Entitlement Offer;
(s) you acknowledge that the Entitlement and the New Shares have not been, and will not be, registered under the U.S. Securities Act or under the securities laws of any state or other jurisdiction of the United States and that, accordingly, the Entitlements may not be taken up or exercised by persons in the United States and the New Shares may not be offered or sold, directly or indirectly, to persons in the United States, except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable securities laws of any state or other jurisdiction of the United States;
(t) if you are an Eligible Shareholder that is not EZCORP, you acknowledge that you are purchasing the New Shares in an “offshore transaction” (as defined in Rule 902(h) under the U.S. Securities Act) in reliance on Regulation S under the U.S. Securities Act;
(u) you have not and will not send any materials relating to the Entitlement Offer to any person in the United States or to any person (including nominees or custodians) acting for the account or benefit of a person in the United States, or to any country outside Australia and New Zealand; and
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(v) you make all other representations and warranties set out in this Entitlement Offer Booklet.
2.13 Brokerage and stamp duty
No brokerage fee is payable by Eligible Shareholders who accept their Entitlement. No stamp duty is payable for subscribing for New Shares under the Entitlement Offer or for additional New Shares under the Oversubscription Facility.
2.14 Notice to nominees and custodians
The Entitlement Offer is being made to all Eligible Shareholders. Nominees with registered addresses in the eligible jurisdictions may be able to participate in the Entitlement Offer in respect of some or all of the beneficiaries on whose behalf they hold existing Shares, provided that the applicable beneficiary would satisfy the criteria for an Eligible Shareholder.
Nominees and custodians who hold Shares as nominees or custodians should note in particular that the Entitlement Offer is not available to:
(a) beneficiaries on whose behalf they hold Existing Shares who would not satisfy the criteria for an Eligible Shareholder;
(b) Ineligible Shareholders; or
(c) Shareholders who are not eligible under all applicable securities laws to receive an offer under the Entitlement Offer.
In particular, persons acting as nominees for other persons may not take up Entitlements on behalf of, or send any documents relating to the Entitlement Offer to, any person in the United States.
Cash Converters is not required to determine whether or not any registered holder is acting as a nominee or the identity or residence of any beneficial owners of Shares. Where any holder is acting as a nominee for a foreign person, that holder, in dealing with its beneficiary, will need to assess whether indirect participation by the beneficiary in the Entitlement Offer is compatible with applicable foreign laws. Cash Converters is not able to advise on foreign laws.
2.15 Withdrawal of the Entitlement Offer
Subject to applicable law, Cash Converters reserves the right to withdraw the Entitlement Offer at any time before the issue of New Shares, in which case Cash Converters will refund any Application Monies already received in accordance with the Corporations Act and will do so without interest being payable to Applicants.
To the fullest extent permitted by law, you agree that any Application Monies paid by you to Cash Converters will not entitle you to receive any interest and that any interest earned in respect of Application Monies will belong to Cash Converters.
2.16 Enquiries
If you have not received or you have lost your personalised Entitlement and Acceptance Form, or have any questions regarding the Entitlement Offer, please contact the Cash Converters Offer Information Line on 1300 653 310 (within Australia) or +61 3 9415 4000 (outside of Australia) at any time from 6:30am to 3:00pm (Perth time) / 8:30am to 5:00pm (AEST) on Monday to Friday, before the Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018. If you have any further questions, you should contact your stockbroker, accountant, financial adviser, solicitor or other professional adviser.
Eligible Shareholders should be aware that an investment in Cash Converters involves risks. The key risks identified by Cash Converters are set out from page 18 of the Investor Presentation (in Section 3).
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3 ASX Announcement and Investor Presentation
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Underwritten Entitlement Offer to Reduce Debt and Strengthen Balance Sheet for Future Growth
Highlights
Underwritten 1 for 4 pro-rata non renounceable entitlement offer to raise approximately $39.5 million (before costs)
Offer price of $0.32 per New Share, represents a 12.8% discount to the 5-day VWAP of $0.367
Major shareholder, EZCORP Inc (31.75%), has committed to take up its pro-rata entitlement (approximately $12.5 million) and to apply for up to a further approximately $6 million worth of New Shares either through the Oversubscription Facility or through an application for shortfall (or a combination of both)
Funds raised, together with existing cash, will be used to strengthen the balance sheet, reduce debt, improve gearing and provide Cash Converters with additional capital to allow flexibility to pursue growth opportunities, whilst maintaining sufficient working capital
Cash Converters International Limited (ASX: CCV) (‘Cash Converters’ or the ‘Company’) is pleased to announce that it has today launched an underwritten non-renounceable entitlement offer to raise approximately $39.5 million (before costs) (‘Entitlement Offer’).
The Entitlement Offer provides eligible shareholders with the opportunity to acquire new fully paid ordinary shares in the Company (‘New Shares’) at an issue price of $0.32 per New Share on the basis of one (1) New Share for every four (4) shares held by eligible shareholders on the Record Date of 5pm (Perth time) on Monday, 4 June 2018. The offer price of $0.32 per New Share, represents a discount of:
12.8% to the 5-day VWAP of $0.367 12.3% to the last close of $0.365 10.1% to the theoretical ex-rights price (‘TERP’) of $0.356*
The Company’s major shareholder, EZCORP Inc (‘EZCORP’), has committed to take up its full pro rata entitlement of 31.75% of the New Shares, representing approximately $12.5 million, and to apply for up to a further approximately $6 million worth of New Shares either through the Oversubscription Facility or through an application for shortfall (or a combination of both). EZCORP’s shareholding in the Company may increase to 34.75% as a result of its pro rata participation in, and take up of shortfall under, the Entitlement Offer. New Shares applied for by EZCORP in addition to its pro rata entitlement will be for up to its maximum 3% capacity to acquire further shares in Cash Converters under item 9 of section 611 of the Corporations Act. EZCORP will not be paid a fee for these commitments.
Hartleys Limited is acting as Lead Manager in respect of the Entitlement Offer. In addition, Hartleys Limited is acting as Underwriter in respect of approximately $21 million of the Entitlement Offer, incremental to the pre-commitment from EZCORP of approximately $18.5 million.
Cash Converters CEO, Mr Mark Reid said: “This entitlement offer is important, for growth and improving our balance sheet, reducing our net debt and gearing ratio. The additional capital will allow flexibility to pursue growth opportunities whilst maintaining sufficient working capital.”
* The theoretical ex-rights price (“TERP”) is the theoretical price at which a company’s shares should trade after the ex- date for an Entitlement Offer, by reference to the last closing share price prior to announcement of the Entitlement Offer. TERP is a theoretical calculation only and the actual price at which shares will trade immediately after the ex-date of the Entitlement Offer will depend on many factors and may not be equal to the TERP.
“We are pleased to provide all eligible Cash Converters shareholders with the opportunity to participate in this capital raising, which will enable the Company to strengthen its balance sheet and continue to build on the growth momentum that was demonstrated during the first half of the 2018 financial year. It was encouraging to see the high level of interest that the Company has received during the sub-underwriting process as well as the high quality of investors that have participated as sub-underwriters.”
Use of Proceeds
The Entitlement Offer will result in a capital structure that has:
Post-Entitlement Offer Pro forma (31 Dec 2017) net debt of $18.8 million Post-Entitlement Offer Pro forma (31 Dec 2017) gearing (net debt / equity) of 6.1% Significant headroom within revised banking covenants Sufficient working capital to allow financial flexibility to pursue growth opportunities
The proceeds from the Entitlement Offer, together with the Company’s existing cash balance, will enable the Company to strengthen its balance sheet and continue to build on the growth momentum that was demonstrated during the first half of the 2018 financial year.
Sources of Funds A$m Description Existing Cash and cash 99.4 Cash & Cash Equivalents as at 30 April 2018 (unaudited) equivalents (31 totalled $99.3m, with cash generated by the business December 2017) throughout H1 FY18 having been reinvested in Loan Book growth Entitlement Offer 39.5 Total 138.9
Use of proceeds A$m Description Repayment of FIIG Bond 60.0 The $60m FIIG Bond (senior unsecured 7.95%) matures in September 2018 and its repayment will reduce annual pre-tax interest costs by approximately $4.8m Retained Cash and 77.4 Provides the Company with the financial flexibility to pursue Working Capital growth opportunities whilst maintaining sufficient working capital Costs of the Offer 1.5 Total 138.9
About the Entitlement Offer
The Entitlement Offer is non-renounceable meaning eligible shareholders who do not take up their entitlements will not be able to transfer or receive any value for those entitlements, and their proportionate equity interest in the Company will be diluted.
Eligible shareholders may choose to accept all or part of their entitlement or none at all. Entitlements of eligible shareholders that are not taken up will comprise an Oversubscription Facility.
The total number of New Shares expected to be issued under the Entitlement Offer is 123,287,397 New Shares.
Oversubscription Facility
Eligible shareholders who have applied for all of their entitlement may also apply for additional New Shares in excess of their entitlement, subject to a cap equal to 50% of their entitlements, at the same issue price of $0.32 per New Share (‘Oversubscription Facility’). There is no guarantee regarding the number of New Shares (if any) that will potentially be available to eligible shareholders under the Oversubscription Facility. To the extent that demand under the Oversubscription Facility exceeds the number of New Shares that are available, there will be a scale back on a pro rata basis.
Timetable
The indicative timetable for the Entitlement Offer is summarised below
Event Date Announcement of Entitlement Offer Wednesday, 30 May 2018 Shares commence trading ex-entitlement Friday, 1 June 2018 Record Date 5pm (Perth time) Monday, 4 June 2018 Entitlement Offer opens Tuesday, 5 June 2018 Entitlement Offer closes 5pm (Perth time) Monday, 18 June 2018 Allotment of New Shares Tuesday, 26 June 2018 Normal trading of New Shares commences and despatch of Wednesday, 27 June 2018 holding statements
An Appendix 3B for the New Shares to be issued pursuant to the Entitlement Offer, Entitlement Offer Booklet, Investor Presentation and Cleansing Statement will follow this announcement.
Copies of the Entitlement Offer Booklet and entitlement and acceptance forms will be mailed to all eligible shareholders in accordance with the timetable set out above.
Cash Converters expects its trading halt to be lifted and its shares to recommence trading from market open today.
If you require further assistance, please contact the Cash Converters Offer Information Line on 1300 653 310 (within Australia) or +61 3 9415 4000 (outside Australia) between 6:30am and 3:00pm (Perth time) / 8:30am and 5:00pm (AEST) Monday to Friday, before the Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST) on Monday, 18 June 2018.
Important Notice
This announcement does not constitute an offer to sell, or a solicitation of any offer to buy, securities in the United States or any other jurisdiction in which such an offer or solicitation would be illegal. The securities referred to in this announcement have not been, and will not be, registered under the US Securities Act of 1933, as amended (the ‘US Securities Act’) or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, to persons in the United States unless they have been registered under the US Securities Act (which Cash Converters has no obligation to do or procure) or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and any other applicable securities laws of any state or other jurisdiction of the United States.
EntitlementFY17 Investor Offer Presentation 22 August 2017 Investor– Presentation
Mark Reid Chief ExecutiveMayOfficer 2018 – Important Notice and Disclaimer
This investor presentation (Presentation) is dated 30 May 2018 and has been prepared by Cash Converters or indirectly, in the United States unless the securities have been registered under the Securities Act (which Cash International Limited (ACN 069 141 546) (Cash Converters). This Presentation has been prepared in relation to a Converters has no obligation to do or procure) or are offered and sold in a transaction exempt from, or not subject pro-rata non-renounceable entitlement offer of new fully paid ordinary shares (New Shares) in Cash Converters to to, the registration requirements of the Securities Act and any other applicable securities laws of any state or other be made to eligible shareholders of Cash Converters under section 708AA of the Corporations Act 2001 (Cth) jurisdiction of the United States. (Corporations Act) as modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84 (Entitlement Offer). By receiving this Presentation, you are agreeing to the following restrictions and limitations. Investment risk An investment in Cash Converters shares is subject to known and unknown risks, some of which are beyond the Summary information control of Cash Converters and its directors. Cash Converters does not guarantee any particular rate of return nor This Presentation is for information purposes only and is a summary only. It should be read in conjunction with does it guarantee any particular tax treatment. You should have regard to the risk factors outlined in the ‘Key Risks’ Cash Converters’ most recent financial report and Cash Converters’ other periodic and continuous disclosure section of this Presentation when making your investment decision. Cooling off rights do not apply to the acquisition information lodged with the Australian Securities Exchange (ASX), which is available at www.asx.com.au. The of New Shares. content of this Presentation is provided as at the date of this Presentation (unless otherwise stated). Reliance should not be placed on information or opinions contained in this Presentation and, subject only to any legal Financial data obligation to do so, Cash Converters does not have any obligation to correct or update the content of this All financial information in this Presentation is in Australian Dollars ($ or AUD) unless otherwise stated. This Presentation. Presentation includes certain pro-forma financial information. The pro-forma historical financial information provided in this Presentation is for illustrative purposes only and is not represented as being indicative of Cash Converters’ Not financial product advice or offer views on its, nor anyone else’s future financial position and/or performance. The pro-forma historical financial This Presentation does not purport to contain all information necessary to make an investment decision, is not information has been prepared by Cash Converters in accordance with the measurement and recognition principles, intended as investment or financial advice (nor tax, accounting or legal advice), must not be relied upon as such but not the disclosure requirements, prescribed by the Australian Accounting Standards (AAS). Refer to the ‘Basis and does not and will not form any part of any contract or commitment for the acquisition of New Shares. Any of preparation of Financial Information’ section of this Presentation for further detail. In addition, the pro-forma decision to buy or sell securities or other products should be made only after seeking appropriate financial advice. financial information in this document does not purport to be in compliance with Article 11 of Regulation S-X of the This Presentation is of a general nature and does not take into consideration the investment objectives, financial rules and regulations of the U.S. Securities and Exchange Commission, and such information does not purport to situation or particular needs of any particular investor. Any investment decision should be made solely on the basis comply with Article 3-05 of Regulation S-X. Investors should be aware that certain financial measures included in of your own enquiries. Before making an investment in Cash Converters, you should consider whether such an this Presentation are ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS investment is appropriate to your particular investment objectives, financial situation or needs. This Presentation is financial information’ published by ASIC and also ‘non-GAAP financial measures’ within the meaning of Regulation for information purposes only and is not a prospectus, product disclosure statement or other offering document G under the U.S. Securities Exchange Act of 1934, as amended, and are not recognised under AAS and under Australian law or any other law (and will not be lodged with the Australian Securities and Investments International Financial Reporting Standards (IFRS). Such non-IFRS financial information/non-GAAP financial Commission (ASIC) or any other foreign regulator). This Presentation is not, and does not constitute, an invitation or measures do not have a standardised meaning prescribed by AAS or IFRS. Therefore, the non-IFRS financial offer of securities for subscription, purchase or sale in any jurisdiction. The distribution of this Presentation in information may not be comparable to similarly titled measures presented by other entities, and should not be jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Although Cash Converters believes these non-IFRS financial measures provide useful information to investors in measuring the Not for release or distribution in the United States financial performance and condition of its business, investors are cautioned not to place undue reliance on any non- This Presentation does not constitute an offer to sell, or a solicitation of any offer to buy, securities in the United IFRS financial information/non-GAAP financial measures included in this Presentation. Certain figures, amounts, States or any other jurisdiction in which such an offer would be illegal. The securities referred to in this Presentation percentages, estimates, calculations of value and fractions provided in this Presentation are subject to the effect of have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the Securities Act) rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this Presentation. or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly 2 Important Notice and Disclaimer (cont.)
Past performance Past performance, including past share price performance of Cash Converters and pro-forma financial information Lead Manager’s related bodies corporate or affiliates and officers, directors, employees, agents and advisers: given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an • disclaim all responsibility and liability (including, without limitation, any liability arising from fault, negligence or indication of Cash Converters’ views on its future financial performance or condition. Past performance of Cash negligent misstatement) for any loss arising from this Presentation or reliance on anything contained in or omitted Converters cannot be relied upon as an indicator of (and provides no guidance as to) future Cash Converters from it or otherwise arising in connection with this Presentation; performance. Nothing contained in this Presentation nor any information made available to you is, or shall be relied • disclaim any obligations or undertaking to release any updates or revision to the information in this Presentation to upon as, a promise, representation, warranty or guarantee, whether as to the past, present or future. reflect any change in expectations or assumptions; and • do not make any representation or warranty, express or implied, as to the accuracy, reliability, completeness of Future performance and forward-looking statements the information in this Presentation or that this Presentation contains all material information about Cash This Presentation contains certain "forward-looking statements". The words "expect", "anticipate", "estimate", Converters or which a prospective investor or purchaser may require in evaluating a possible investment in Cash "intend", "believe", "guidance", "should", "could", "may", "will", "predict", "plan" and other similar expressions are Converters or acquisition of shares in Cash Converters, or likelihood of fulfilment of any forward-looking statement intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position or any event or results expressed or implied in any forward-looking statement. and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice and The Lead Manager and Cash Converters’ respective advisers and their respective affiliates, related bodies corporate, involve known and unknown risks and certainties and other factors which are beyond the control of Cash Converters, directors, officers, partners, employees and agents, have not authorised, permitted or caused the issue, submission, its directors and management. This includes statements about market and industry trends, which are based on dispatch or provision of this Presentation and, for the avoidance of doubt, and except to the extent referred to in this interpretations of current market conditions. Presentation, none of them makes or purports to make any statements in this Presentation and there is no statement in this Presentation which is based on any statement by any of them. Further, neither the Lead Manager nor any of its Forward-looking statements are provided as a general guide only and should not be relied upon as an indication or related bodies corporate, affiliates, officers, directors, employees, agents or advisers accepts any fiduciary guarantee of future performance. Actual results, performance or achievements may differ materially from those obligations to or relationship with you, any investor or potential investor in connection with the Offer or otherwise. expressed or implied in such statements and any projections and assumptions on which these statements are based. These statements may assume the success of Cash Converters’ business strategies. The success of any of those You acknowledge and agree that: strategies will be realised in the period for which the forward looking statement may have been prepared or • determination of eligibility of investors for the purposes of the Offer is determined by reference to a number of otherwise. Readers are cautioned not to place undue reliance on forward-looking statements and except as required matters, including legal and regulatory requirements and the discretion of Cash Converters and the Lead by law or regulation, none of Cash Converters, its representatives or advisers assumes any obligation to update Manager; these forward-looking statements. No representation or warranty, express or implied, is made as to the accuracy, • each of Cash Converters and the Lead Manager and their related bodies corporate, affiliates, officers, directors, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future employees, agents and advisers disclaim any duty or liability (including for negligence) in respect of the exercise matters contained in this Presentation. The forward-looking statements are based on information available to Cash or otherwise of that discretion, to the maximum extent permitted by law. Converters as at the date of this Presentation. Except as required by law or regulation (including the ASX Listing Rules), none of Cash Converters, its representatives or advisers undertakes any obligation to provide any additional The Lead Manager may have interests in the securities of Cash Converters, including by providing investment or updated information whether as a result of a change in expectations or assumptions, new information, future banking services to Cash Converters. Further, they may act as market maker or buy or sell those securities or events or results or otherwise. Indications of, and guidance or outlook on, future earnings or financial position or associated derivatives as principal or agent. The Lead Manager may receive fees for acting in its capacity as lead performance are also forward-looking statements. manager to the Offer.
Disclaimer Acceptance To the maximum extent permitted by law, (1) Cash Converters (including its subsidiaries, related bodies corporate, By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentation you shareholders, affiliates, advisers and agents); and (2) Hartleys Limited (Lead Manager) together with the acknowledge and agree to the terms set out in this ‘Important notice and disclaimer’. 3 Table of Contents
Section Content Introduction • Corporate Overview Offer • Offer Overview • Shareholder Support • Use of Funds • Financial Impact of Offer • Pro-forma Statement of Financial Position • Basis of Preparation of Financial Information • Indicative Timetable Business/Trading Update • Corporate Overview • FY18: H1 Highlights & Trading Update • Outlook – Strategy for Growth Key Risks
International Offer Restrictions
4 Corporate Overview
Capital Structure Share Price Chart ASX Code CCV 5,000,000.00 ~52% share price $0.4500 Shares on Issue 493.1 million increase from 52 week Volume 4,500,000.00 Share Price (28 May 2018) $0.365 low of 24c… 4,000,000.00 $0.4000 CCV Share Price Market Capitalisation $180 million 3,500,000.00 Cash & Cash Equivalents (31 Dec 2017) 1 $99.4 million 3,000,000.00 $0.3500 Borrowings (31 Dec 2017) 2 $156.2 million 2,500,000.00 3 Substantial Shareholders 2,000,000.00 $0.3000
EZCORP Inc 31.75% 1,500,000.00
Perpetual Investments Ltd 9.84% 1,000,000.00 $0.2500
Adam Smith Asset Management 5.21% 500,000.00
Fidelity Management & Research 5.71% 0.00 $0.2000 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Commonwealth Bank Group 5.05%
Board of Directors Senior Management Non Executive Chairman Stuart Grimshaw Chief Executive Officer Mark Reid Executive Deputy Chairman Peter Cumins General Counsel & Company Secretary Brad Edwards Independent, Non Executive Director Andrea Waters Chief Operating Officer Sam Budiselik Independent, Non Executive Director Ellen Comerford Chief Financial Officer Martyn Jenkins Independent, Non Executive Director Kevin Dundo Non Executive Director Lachlan Given
1. Cash & Cash Equivalents as at 30 April 2018 (unaudited) totalled $99.3 million – Cash generated by the business throughout H1 FY18 has been re-invested in funding (the un-securitised element of) Loan Book growth. 2. Borrowings as at 30 April 2018 (unaudited) totalled $159.5 million. 3.EZCORP Inc as at 29/3/18 Nasdaq Global Corporate Solutions Ownership Report; Perpetual Investments Ltd as at 14/09/17 Substantial Shareholder notice; Adam Smith Asset Management as at 23/08/17 Substantial Shareholder notice; Fidelity Management & Research as at 29/3/18 Nasdaq Global Corporate Solutions Ownership Report; Commonwealth Bank Group as at 1/03/18 Substantial Shareholder notice. 5 6
Entitlement Offer
6 Offer Overview
Offer • Cash Converters is undertaking an underwritten pro-rata non-renounceable entitlement offer (Offer) of new fully paid ordinary shares in the Company (New Shares) at an issue price of 32 cents per New Share • Under the Offer, approximately 123.3 million New Shares will be issued on a 1 for 4 basis to raise $39.5 million, before costs. Hartleys Limited is acting as Lead Manager in respect of the Offer
Offer Price • 32 cents per New Share represents: • a discount of 12.3% to the closing price of 36.5 cents on 28 May 2018 • a discount of 12.8% to the volume weighted average price for the 5 trading days up to and including 28 May 2018 of 36.7 cents • a discount of 10.1% to the theoretical ex-rights price1 of 35.6 cents
Oversubscription Facility • Under the Oversubscription Facility, Eligible Shareholders may apply for additional New Shares, subject to a cap equal to 50% of their Entitlements and pro-rata scale back (if required).
Underwriting and Major • $21 million of the Offer underwritten by the Lead Manager Hartleys Limited Shareholder Participation • Cash Converters’ major shareholder, EZCORP Inc (31.75% shareholder), has pre-committed up to $18.5 million for the Offer (see following slide)
1. The theoretical ex-rights price (“TERP”) is the theoretical price at which a company’s shares should trade after the ex-date for an Entitlement Offer, by reference to the last closing share price prior to announcement of the Entitlement Offer. TERP is a theoretical calculation only and the actual price at which shares will trade immediately after the ex-date of the Entitlement Offer will depend on many factors and may not be equal to the TERP. 7 Support of Major Shareholder
• Cash Converters’ major shareholder, EZCORP (31.75% shareholder), has committed to take up its full pro-rata entitlement of 31.75% of the New Shares and to apply for up to a further $6 million worth of New Shares1 either through the Oversubscription Facility or through an application for shortfall (or a combination of both). EZCORP’s application for shortfall shares (not shares through the Oversubscription Facility) will be in priority to the underwriter and any sub-underwriter. EZCORP is not being paid a fee for these commitments.
• EZCORP’s shareholding in Cash Converters may increase to 34.75% as ormed in 1989, EZCORP has grown into a leading a result of its pro-rata participation in, and take up of shortfall under, the • F Entitlement Offer1. provider of pawn loans with 897 stores in the United States and Latin America • Cash Converters does not expect that the Offer will have any material effect or consequence on the control of Cash Converters. • Headquartered in Austin, Texas
~A$m • EZCORP is traded on NASDAQ under the ticker symbol Major Shareholder Pre-Commitment for full 12.5 EZPW entitlement
Major Shareholder shortfall subscription up to 6 • Market Capitalisation circa A$1 billion
Underwriting for the Offer 21
Total Offer Amount 39.5
1. New Shares applied for by EZCORP in addition to its pro rata entitlement will be within EZCORP’s 3% capacity to acquire further shares in Cash Converters under item 9 of section 611 of the Corporations Act . 8 Use of Funds
• The proceeds from the Offer, together with the Company’s existing cash balance, will enable the Company to strengthen its balance sheet.
Sources of Funds A$m Use of Funds A$m Existing cash and cash equivalents Repayment of FIIG Bond 60.0 99.4 (31 December 2017) Retained cash & cash equivalents 77.4 Offer 39.5 Cost of Offer (estimate) 1.5 Total 138.9 Total 138.9
• On completion of the Offer and repayment of the FIIG Bond, Cash Converters will have a net debt and gearing ratio that will provide sufficient headroom for growth.
• The $60m FIIG Bond (senior unsecured 7.95% p.a.) matures in September 2018 and incurs an annual pre-tax interest expense of ~$4.8m. The interest expense related to the FIIG Bond will not be incurred following its repayment. The interest expense may increase should the amount drawn down under the extended securitisation facility increase to fund loan book growth.
“This Offer is important for growth, it strengthens our balance sheet, eliminates unsecured debt and improves gearing. The additional capital will allow flexibility to pursue growth opportunities whilst maintaining sufficient working capital.”
Mark Reid, Chief Executive Officer 9 Financial Impact of Offer
• The Offer is expected to have the following impact on Cash Converters:
Pre-Offer (31 Dec 2017) Post-Offer Pro-forma (31 Dec 2017)
Cash & Cash Equivalents A$99.4m1 A$77.4m
Net Debt2 A$56.8m A$18.8m
Gearing (net debt / equity) 21.0% 6.1%
• Covenants applicable under both: Banking covenants - FIIG Bond • Securitised debt facility only, linked to loan book - Fortress Securitisation Facility
• Provides additional capital to allow financial Growth / working capital flexibility to pursue growth opportunities whilst maintaining sufficient working capital
• The interest expense related to the FIIG Bond will • The $60m FIIG Bond (senior unsecured cease following its repayment in September 2018. 7.95% p.a.) matures in September 2018 and Profit & Loss • Future interest expense is dependent upon debt incurs an annual pre-tax interest expense of funding and would be impacted by any further ~$4.8m. drawdowns on existing or new facilities.
1. Cash & Cash Equivalents as at 30 April 2018 (unaudited) totalled $99.3 million – Cash generated by the business throughout H1 FY18 has been re-invested in funding (the un-securitised element of) Loan Book growth. 2. Borrowings as at 30 April 2018 (unaudited) totalled $159.5 million. Net Debt defined as Total Borrowings less Cash & Cash Equivalents, as at 30 April 2018 (unaudited) $60.2m.
10 Pro-forma Statement of Financial Position
Reported as at Debt Pro-forma as at Offer 1 31 December 2017 repayment 2 31 December 2017 ($m) ($m) ($m) ($m)
Cash and cash Notes: 99.4 38.0 (60.0) 77.4 equivalents 1. Funds received from the Offer are net of estimated $1.5 million equity raising costs. 2. Pro-forma adjustment reflects the intention of the Company to repay the Loan receivables 3 135.2 - - 135.2 FIIG bond in full at its maturity date in September 2018 and therefore not incur any early termination fees. Other receivables / 84.2 - - 84.2 3. Refer to the basis of preparation on slide 12 for impact of changes to Assets Australian Accounting Standards and Interpretations applicable from 1 July 2018, with specific consideration of the impact of AASB 9 Financial Intangible assets Instruments which when adopted will impact loan book provisioning in 135.7 - - 135.7 (including goodwill) 4 future periods. 4. Refer to Key Risks on slide 21 for sensitivity disclosure in relation to Total assets 454.5 38.0 (60.0) 432.5 impairment testing associated with non-current assets, including intangible assets. 5. Borrowings shown net of capitalised borrowing costs of $1.5 million 5 Borrowings 154.7 - (60.0) 94.7 (estimate) and comprise amounts drawn under the recently extended $150 million Fortress facility, which matures in December 2020. Other liabilities 28.8 - - 28.8
Total liabilities 183.5 - (60.0) 123.5
Total equity 271.0 38.0 - 309.0
11 Basis of Preparation of Financial Information
The basis of preparation in compiling the Pro-forma Statement of Financial Positions post Offer as disclosed on underlying loan books at that point in time. The modelling is complex and is in the process of being finalised slide 11 of this presentation (and collectively referred to as the pro-forma historical financial information) is set however the early preliminary results indicate a potential increase in the allowance of between $5 - 10 million, out below: from $15.0 million at 31 December 2017 to between $20 and $25 million at 30 April 2018. The one-off increase in the allowance on adoption of AASB 9 would have resulted in an adjustment to retained earnings / reserves of • The pro-forma historical financial information has been prepared in accordance with the recognition and between $3.5 - 7 million tax affected (assuming an effective tax rate of 30%), based on the preliminary 30 April measurement principles described in Australian Accounting Standards (including Australian Accounting 2018 modelling. The actual impact of the initial adoption of AASB 9 on the allowance for impairment losses will Interpretations). The accounting policies used in preparation of the pro-forma historical financial information be determined at 30 June 2018 based on the loan book at that point in time and will be recognised against are materially consistent with those set out in the Cash Converters annual financial report for the year ended retained earnings on initial adoption. Consequently the initial impact of the adoption of AASB 9 may differ 30 June 2017. significantly to the range illustrated here as further modelling is undertaken, and the make-up of the underlying • The pro-forma historical financial information is presented in an abbreviated form and does not contain all the loan books change. disclosures required by Australian Accounting Standards in an annual financial report prepared in accordance with the Corporations Act 2001. AASB 15 Revenue from Contracts with Customers (”AASB 15”) • The pro-forma historical financial information has been derived from Cash Converters Half-Year Financial AASB 15 replaces AASB 118 ‘Revenue’ and will be applied from 1 July 2018. AASB 15 provides a single, Report for the half-year ended 31 December 2017. principles-based five-step model to be applied to all contracts with customers. Guidance is provided on topics • Cash Converters complete Annual Financial Report for the year ended 30 June 2017, and Half Year Financial such as the point at which revenue is recognised, accounting for variable consideration, costs of fulfilling and Report for the half-year ended 31 December 2017 is available from Cash Converters’ website obtaining a contract and various related matters. New disclosures regarding revenue are also introduced. An www.cashconverters.com, or ASX’s website www.asx.com.au. initial impact assessment has been performed and, based on material revenue streams in FY 2017, no • The pro-forma historical financial information illustrates the financial performance of Cash Converters as if the significant risk of an impact to revenue recognition has been identified. This analysis considered the Company’s Offer as at 31 December 2017 for the purposes of the pro-forma statement of financial position. current accounting policies for material revenue streams to which the new standard applies, including retail goods sold and franchise fees. Impact of changes to Australian Accounting Standards and Interpretations AASB 16 Leases AASB 9 Financial Instruments (“AASB 9”) AASB 16 replaces AASB 117 ‘Leases’ and will be applied from 1 July 2019. AASB 16 will significantly impact AASB 9 will be applied by Cash Converters for the period commencing 1 July 2018 and replaces AASB 139 the accounting for operating leases as it requires the recognition of a lease liability being the present value of ‘Financial instruments: Recognition and measurement’. AASB 9 significantly changes the recognition of future lease payments and corresponding right-of-use asset, which will initially be recognised at the same value impairment on customer receivables with the standard introducing an expected loss model. Under this approach as the lease liability or lower amount depending on the transition approach adopted. The Company operates a impairment provisions are recognised based on the life time expected loss on a loan. This differs from the corporate store network of 69 stores, each carrying a property lease and therefore the impact of the standard will current incurred loss model under AASB 139 whereby impairment provisions are only reflected when there is most likely result in significant increases in assets and liabilities. It will also likely result in increased EBITDA, as objective evidence of impairment. The standard also includes a single approach for the classification and the current operating lease expense will be recognised as a combination of interest and depreciation under the measurement of financial assets based on cash flow characteristics and the business model used for the new standard, and result in earlier recognition of expenses over the life of the contract due to the front-loading of management of the financial instruments. Of the changes that AASB 9 introduces, the Company has identified interest expense under the new standard. the impact of the revised credit provisioning approach, using the expected loss model, as having the most significant impact. The impact would be that impairment losses under AASB 9 are recognised in the income statement earlier in the life of the respective loan. This will result in a one-off adjustment to loan receivables and retained earnings / reserves on adoption of AASB 9, and for those loan products experiencing growth, the growth in profitability will be slower. Cash Converter’s is in the process of modelling the impact of the changes on the impairment of customer receivables based on the 30 April 2018 loan book using the characteristics of the 12 Indicative Timetable
EVENT DATE1 Announcement of Offer Wednesday, 30 May 2018 Shares commence trading ex-entitlement Friday, 1 June 2018 Record Date 5pm (Perth time) Monday, 4 June 2018 Offer opens Tuesday, 5 June 2018 Last day to extend Offer closing date Wednesday, 13 June 2018 Offer closes 5pm (Perth time) Monday, 18 June 2018 Allotment of New Shares Tuesday, 26 June 2018 Normal trading of New Shares commences and despatch of holding Wednesday, 27 June 2018 statements
1. The Offer Indicative Timetable is subject to variation. The Company reserves the right to alter the timetable at its discretion and without notice, subject to ASX Listing Rules and the Corporations Act and other applicable laws. In particular, Cash Converters in conjunction with the Lead Manager reserves the right to either generally or in particular cases extend the closing date of the Offer, to accept late or to withdraw the Offer without prior notice. The commencement of quotation of New Shares is subject to confirmation from the ASX.
13 Business / Trading Update
14 Corporate Overview –– The core business of Cash Converters is the ownership and franchising of retail and financial services stores
Cash Converters is a leading –– The Company has built unique brand strength in Australia operator and franchisor in retail, and internationally second hand goods and personal –– Cash Converters has a network through corporate and licencing arrangements of 726 stores in 18 countries (See financial services markets, within Table 1)
Australia and internationally. –– In Australia, there are 153 Corporate and Franchise Cash Converters outlets with over 1,750 employees
–– Internationally the Company operates in the United Kingdom, New Zealand1 and under licence in 15 other Australia UK countries 69 corporate stores 195 franchise stores 84 franchise stores –– Cash Converters has successfully developed online channels for retail and personal lending and established the
New Zealand International Green Light Auto secured vehicle finance business in 10 corporate stores1 350 franchise stores Australia 18 franchise stores 15 countries –– Cash Converters’ strategy is one of growth, leveraging our
Table 1: Corporate and Franchise Store Network. trusted brand and continuing to put the customer at the 1NZ interest via 25% equity holding. centre of everything we do 15 FY18: H1 Highlights & Trading Update
➢ H1 FY18 EBITDA $21.5m; NPAT $9.4m.
➢ FY18 NPAT guidance of a stronger H2 FY18 (vs. H1 FY18) remains on track. “The first half results for the 2018 ➢ Continuing Loan Book Growth – H1 FY18 up to $155.7m (+35% vs. H2 financial year demonstrate that our FY17) with moderate growth continuing in H2 FY18. transition of the Cash Converters business is achieving all that we set ➢ Quality of Loan Book Improving – H1 FY18 Net Bad Debt1 was down from 21.5% to 11.3% of Principal Advanced and is trending in line with out to do. The growth in the total expectations in H2 FY18. loan book is driving revenue growth in the second half of the 2018 ➢ UK operations stable & profitable – H1 FY18 EBITDA contribution of $1.4m. financial year and into the 2019 financial year” ➢ A positive H1 FY18 EBITDA result for Green Light Auto of $0.9m delivered. – Mark Reid ➢ Increased Loan Book securitisation facility of $150m until 2020 along with a broadening of the eligibility criteria to include Medium Amount Credit CEO Contract (MACC) and Green Light Auto secured vehicle lending.
All comparisons H1 FY18 to prior corresponding period (H1 FY17) unless otherwise stated. 1. Net bad debt (SACC / MACC): Gross bad debts written off, net of recoveries. 16 Outlook – Strategy for Growth
1
✓ Continued Revenue Growth Continue NPAT growth from both new/existing products - Transforming the Company’s digital capabilities and channels - Ongoing development of new products & channels 2 - Transformation of Green Light Auto business - Exploring International opportunities Continue to diversify revenue base ✓ Continued Efficiency Improvements - Disciplined cost management and productivity 3 improvements Position for future growth by repositioning the brand ✓ Sound Risk Management Framework and culture, building new ✓ Sustainable Profit Growth capabilities in digital and data and establishing a stronger franchise business model
Putting our customers at the centre of everything we do… 17 Key Risks
18 Key Risks This section discusses some of the key risks associated with any investment in Cash Converters, which may affect the value of Cash Converters securities. The risks set out below are not listed in order of importance and do Cash Converters operates in a highly regulated industry and such laws and regulations may change not necessarily constitute an exhaustive list of all risks involved with an investment in Cash Converters. Before As noted above, Cash Converters operates in a highly regulated industry in Australia and overseas. In Australia, investing in Cash Converters, you should be aware that an investment in Cash Converters has a number of risks, the industry is undergoing a period of political and regulatory scrutiny, which may result in regulatory change. The which are specific to Cash Converters and listed securities generally, and which are beyond the control of Cash introduction of new, or the variation of existing laws, standards and regulations (including changes to laws, Converters. Before investing in New Shares, you should consider whether this investment is suitable for you. standards and regulations relating to lending and the provision of credit), or a change in the way existing laws, Potential investors should consider publicly available information on Cash Converters (such as that available on standards and regulations are interpreted or applied, may require changes to Cash Converters’ methods of the websites of Cash Converters and ASX), carefully consider their personal circumstances and consult their operation or limit the way Cash Converters operates. Any changes to laws, standards or regulations may require stockbroker, solicitor, accountant or other professional adviser before making an investment decision. capital and other expenditures to be incurred, and/or inhibit Cash Converters’ ability to offer its products and services to its customers. For example, the National Consumer Credit Protection Amendment (Small Amount Risks relating to Cash Converters Credit Contract and Consumer Lease Reforms) Bill 2018 is currently under review. If this review progresses and Cash Converters may be involved in disputes or litigation legislation is passed by both houses of Parliament, there may be changes to the terms on which small amount Cash Converters operates in a highly regulated industry and is therefore exposed to risks arising from failure or credit contracts may be provided. Cash Converters cannot reasonably assess the final impact changes in this law inability to comply with applicable laws, regulations, licence conditions, regulatory standards, industry codes of may have on its business. However, the Company has estimated the potential impact on impairment of goodwill if conduct and its own policies and procedures that apply in Australia and in the international jurisdictions in which the law was enacted in its currently proposed form (refer slide 21). In addition, the Banking Royal Commission Cash Converters operates. This may include detrimental practices, such as the provision of products and services into Australia’s banking, superannuation and financial services sectors is currently underway. While the terms of that do not comply with applicable laws (such as the National Consumer Credit Protection Act 2009 (Cth) and the reference for this Royal Commission do not explicitly apply to Cash Converters, Cash Converters may be National Credit Code), selling or unduly influencing customers to purchase inappropriate products and services indirectly impacted by the Royal Commission’s findings if legislated. and the provision of inappropriate financial advice or advice that is not in the best interests of customers. As a result, Cash Converters may be exposed to fines, public censure, litigation (including class actions), restitution to Cash Converters is exposed to the conduct of its franchisees customers, regulators or other stakeholders, unenforceability of contracts such as loans, guarantees and other Cash Converters outsources the operation of the majority of its stores to third party franchisees. Cash Converters’ security documents, or enforced suspension of operations or loss of relevant licences to operate all or part of its operations are therefore reliant on being able to identify, attract and retain suitably qualified and motivated business. This may adversely impact Cash Converters’ reputation and financial performance and position. franchisees. An inability to do so or poor performance by franchisees may have a materially adverse impact on the financial performance of Cash Converters and could harm its reputation. Although the contractual Current class actions arrangements Cash Converters has with its franchisees requires these parties to comply with all applicable laws, As previously advised to the market, Cash Converters was served with the statements of claim referred to below, there is a risk that non-compliance by franchisees may cause damage to Cash Converters’ brand and reputation, which relate to the legality of brokerage fees charged by Cash Converters to its customers. The brokerage fee or require Cash Converters to take steps to remedy non-compliance. Furthermore, action by regulators in relation system has not been used since 30 June 2013. On 31 July 2015, a statement of claim was lodged with the New to its arrangements with franchisees may also impact on Cash Converters’ operations and may increase Cash South Wales Registry of the Federal Court of Australia, commencing a class action claim on behalf of borrowers Converters’ regulatory burden or otherwise impose unforeseen costs on Cash Converters. resident in Queensland who took out personal loans from Cash Converters’ subsidiaries during the period from 30 July 2009 to 30 June 2013; and on 27 April 2016, a statement of claim was lodged with the New South Wales 2018 Senate Inquiry into Franchising Code of Conduct Registry of the Federal Court of Australia, commencing a class action claim on behalf of borrowers resident in On 22 March 2018 the Senate passed a motion to refer a matter to the Parliamentary Joint Committee on Queensland who took out cash advance loans during the period from 28 April 2010 to 30 June 2013. Cash Corporations and Financial Services (Joint Committee) for inquiry and report by 30 September 2018 (Senate Converters is vigorously defending these proceedings, with trial expected to commence in October 2018. Given Inquiry). The Senate Inquiry is a wide ranging review including into the operation and effectiveness of the the current stage of the proceedings, the financial impact of either class action on Cash Converters cannot be Franchising Code of Conduct. It is not clear at this point in time what changes to the Franchising Code of Conduct reliably and accurately determined at this time. However, if Cash Converters does not successfully defend either may result from the Senate Inquiry or the impact of any changes on Cash Converters franchising and business or both of the proceedings, Cash Converters would likely be required to make a significant payment by way of operations. damages or settlement, which could have a material adverse impact on the financial performance and position of Cash Converters. 19 Key Risks (cont.)
Risks relating to Cash Converters (cont.) Retail environment and general economic conditions risk Cash Converters may experience liquidity or refinancing pressures Cash Converters financial performance is sensitive to the current state of, and future changes in, the retail A loss of, or adverse impact to, one or more of Cash Converters’ funding sources could limit Cash Converters’ environment in the countries in which it operates. For example, the Australian retail environment has recently ability to write new loans or write new loans on favourable terms. Cash Converters utilises debt to fund its experienced challenging conditions due to soft consumer sentiment and retail demand. While this environment business operations and may need to access additional debt financing to grow its operations. If Cash Converters may encourage consumers to sell goods to Cash Converters or to buy second hand goods from Cash is unable to refinance, repay or renew its debt facilities or otherwise obtain debt finance on favourable terms, Converters, ultimately a challenging retail environment may be adverse to Cash Converters. Economic conditions Cash Converters may not be able to meet its financial commitments or fund growth initiatives, which may may worsen in the countries in which Cash Converters operates its stores which could cause the retail adversely impact its financial performance and position. Cash Converters is required to maintain sufficient cash environment to deteriorate as consumers reduce their level of consumption. Further, Cash Converters stores balances to meet the funding requirements of its loan books, which can necessitate careful management of may be left with stock that they are unable to sell for a profit or at all. Should any of these risks occur, they are liquidity. If Cash Converters does not meet its cash flow and operational targets, or does not have sufficient debt likely to have an adverse impact on Cash Converters financial performance. to draw down, it may be unable to service its loan books, which may lead to financial liability and penalties becoming payable by Cash Converters. Performance and reliability of Cash Converters’ websites, databases and operating systems Cash Converters’ websites, databases, IT and management systems, including its security systems, are critically Cash Converters may not be able to manage credit risk and recover bad and doubtful debts important to its success. The satisfactory performance, reliability and availability of Cash Converters’ websites, If Cash Converters’ customers do not pay Cash Converters the principal, interest and fees owing under their loan databases, IT and management systems are integral to the operation of the business. There is a risk that if Cash contract then Cash Converters may experience a decrease in revenue, increase in expenses (including an Converters’ IT and management systems do not function properly, there could be system disruptions, corruption increase in impairment expenses and an increase in funding costs), and/or decrease in operating cash flows in databases or other electronic information, delays in loan applications and processing, website slowdown or received, which may have a material effect on Cash Converters’ business, financial condition and operating and unavailability, loss of data or the inability to fulfil customer loans which, if sustained or regular, could materially financial performance. Circumstances where customers may not repay their financial obligations to Cash adversely affect Cash Converters financial and operational performance. Cash Converters’ financial and Converters include: a deterioration in the customer’s financial position (for example as a result of a general operational performance could be adversely affected by a system failure that causes prolonged disruption to its economic slow-down) or the customer prioritises other financial payments ahead of their payments to Cash websites. This could directly damage the reputation and brand of Cash Converters and could reduce visitors to Converters; and Cash Converters has failed to appropriately assess which customers can and will repay their the affected websites, directly adversely effecting transactions with customers. Cash Converters’ websites, obligations. databases and management systems are all hosted on servers owned by third party providers. Cash Converters is subject to the disaster planning contingencies of those third party providers to deal with events that are beyond Cash Converters’ competitive position may deteriorate the control of those parties such as earthquakes, floods, fires, power grid issues, telecommunication and network Cash Converters operates in a competitive industry. Its competitive position may deteriorate as a result of, for failures, terrorist attacks, computer viruses and other similar events. A catastrophic failure in the systems of a example, the emergence of new competitors (including online lenders), new competing products or services, or third party provider is likely to have a material impact on the systems and operations of Cash Converters. Cash Converters’ failure to successfully adapt to changing market conditions, customer demands, pricing and legal developments. Such failures may adversely affect Cash Converters’ operating and financial performance.
Cash Converters’ is exposed to changes in foreign exchange rates and interest rates Various entities within the Cash Converters group borrow funds at variable interest rates and place funds on deposit at variable rates. Personal loans issued by Cash Converters are at fixed rates. If there are adverse changes in interest rates, Cash Converters funding costs may increase and Cash Converters may not be able to pass any such cost increases onto its customers, including those who have loans with fixed interest rates. Furthermore, as Cash Converters has operations outside of Australia, it undertakes transactions denominated in foreign currencies. Adverse movements in exchange rates relative to the Australian dollar may adversely affect 20 Cash Converters’ financial position and performance. Key Risks (cont.)
Risks relating to Cash Converters (cont.) Impact of changes to Australian Accounting Standards and Interpretations Cash Converter’s is in the process of modelling the impact of the changes on the impairment of customer Data loss, theft or corruption receivables based on the 30 April 2018 loan book using the characteristics of the underlying loan books at that Cash Converters’ databases of customers and data analytics are a key part of Cash Converters business and a point in time. The modelling is complex and is in the process of being finalised however the early preliminary valuable asset for continued success. However, such databases are subject to various risks including computer results indicate a potential increase in the allowance of between $5 - 10 million, from $15.0 million at 31 viruses, electronic theft, physical terminal theft, physical damage resulting in a loss or corruption of data, December 2017 to between $20 and $25 million at 30 April 2018. The one-off increase in the allowance on operating system failures, third party provider failures and similar disruptions. This could render the websites adoption of AASB 9 would have resulted in an adjustment to retained earnings / reserves of between $3.5 - 7 unavailable for a period of time while data is restored. Cash Converters efforts to combat such risks (including million tax affected (assuming an effective tax rate of 30%), based on the preliminary 30 April 2018 modelling. firewalls, encryption of customer data, a privacy policy and policies to restrict unauthorised access), might not be The actual impact of the initial adoption of AASB 9 on the allowance for impairment losses will be determined at successful and there is a risk that a data breach may occur, or a third party may gain access to the confidential 30 June 2018 based on the loan book at that point in time and will be recognised against retained earnings on information of Cash Converters’ customers or its internal systems and databases. The failure of Cash Converters initial adoption. Consequently the initial impact of the adoption of AASB 9 may differ significantly to the range to maintain the confidentiality of this information (in particular, its customer database) could result in a breach of illustrated here as further modelling is undertaken, and the make-up of the underlying loan books change. law by Cash Converters and cause significant operational, reputational, legal and cost ramifications for Cash Converters, any of which could adversely affect Cash Converters’ future financial performance. The actual impact of the initial adoption of AASB 9 on the allowance for impairment losses will be determined at 30 June 2018 based on the loan book at that point in time and will be recognised against retained earnings on Impairment of non-current assets sensitivity – potential change in legislation initial adoption. Consequently the initial impact of the adoption of AASB 9 may differ to the range illustrated here As disclosed in note 3.5 of the 30 June 2017 annual financial statements, on 28 November 2016 the Minister for as further modelling is undertaken, and the make-up of the underlying loan books change. Revenue and Financial Services issued a media release in response to the Final Report of the Small Amount Credit Contract (SACC) Law Review advising that the government supports most of the recommendations, in Contingent liabilities – Class Actions part or in full, of the Final Report. One of the recommendations is to extend the SACC protected earnings amount In the course of its normal business the Group occasionally receives claims and writs for damages and other (PEA) requirement to all consumers, and lowering it to 10 per cent of the consumer’s net income. The Company matters arising from its operations. Where, in the opinion of the directors it is deemed appropriate, a specific is continuing discussions with the government around these recommendations, with no changes to the applicable provision is made, otherwise the directors deem such matters are either without merit or of such kind or involve SACC legislation having currently been enacted. Note 3.5 of the 30 June 2017 annual financial statements such amounts that would not have a material adverse effect on the operating results or financial position of the included details of the key assumptions applied in the impairment testing as at 30 June 2017, and also noted that economic entity if disposed of unfavourably. As previously advised to the market, Cash Converters was served the recoverable value of both the Personal finance and Store operations businesses may be impacted by with the statements of claim referred to below, which relate to the legality of brokerage fees charged by Cash potential future legislative changes given the impact on Cash Converters personal loan and cash advance Converters to its customers. The brokerage fee system has not been used since 30 June 2013. On 31 July 2015, operations. Whilst ultimately business operations could potentially be adjusted to mitigate the impact of these a statement of claim was lodged with the New South Wales Registry of the Federal Court of Australia, changes, the likely impact of the legislation if enacted in its currently proposed form, for loans issued on or after 1 commencing a class action claim on behalf of borrowers resident in Queensland who took out personal loans July 2019, based on the profile of the loan book at 30 April 2018 and with reasonably possible changes to other from Cash Converters’ subsidiaries during the period from 30 July 2009 to 30 June 2013; and on 27 April 2016, a key assumptions being taken into account, would result in an impairment within a reasonably likely range of $45 statement of claim was lodged with the New South Wales Registry of the Federal Court of Australia, commencing million to $55 million. As outlined above, this estimate is subject to significant variability due to both the ultimate a class action claim on behalf of borrowers resident in Queensland who took out cash advance loans during the form and enactment date of the legislation, both of which are uncertain, as well as the profile of the loan book period from 28 April 2010 to 30 June 2013. Cash Converters is vigorously defending these proceedings, with trial when any applicable legislative changes were to come into effect. Additionally, there is no certainty that any expected to commence in October 2018 and therefore no provision has been made. Given the current stage of change to applicable legislation will be made. the proceedings, the financial impact of either class action on Cash Converters cannot be reliably and accurately determined at this time. However, if Cash Converters does not successfully defend either or both of the proceedings, Cash Converters would likely be required to make a significant payment by way of damages or settlement, which could have a material adverse impact on the financial performance and position of Cash Converters. 21 Key Risks (cont.)
Risks relating to the Offer an adverse impact on the amount of proceeds raised under the Offer, which may limit Cash Converters’ ability to Risks associated with an investment in shares use the proceeds as described in this Presentation and may cause the Offer to be withdrawn. There are general risks associated with investments in equity capital such as Cash Converters securities. The trading price of Cash Converters securities may fluctuate with movements in equity capital markets in Australia Control implications and internationally. This may result in the market price for the New Shares being less or more than the Offer As detailed in the cleansing notice released to the ASX on the date of this presentation, EZCORP may increase Price. Generally applicable factors that may affect the market price of shares include: its voting power in Cash Converters from 31.75% to a maximum of 34.75% on completion of the Offer depending • general movements in Australia and international stock markets; on the level of take up by shareholders of their entitlements. This is consistent with EZCORP’s right to “creep” by • investor sentiment; up to 3% under an exception to the takeovers threshold contained in Corporations Act. Notwithstanding that the • Australian and international economic conditions and outlooks; Offer is not expected to have any material effect or consequence on the control of Cash Converters, there is a risk • changes in interest rates and the rate of inflation; that ASIC or another party could bring an action to the Takeovers Panel (Panel) claiming that the Offer gives rise • changes in government legislation and policies, in particular taxation laws; to unacceptable circumstances. If an action is brought in the Panel and is successful, there are a broad range of • announcement of new technologies; orders that the Panel can make, including requiring Cash Converters to amend the terms of the Offer or withdraw • geo-political instability, including international hostilities and acts of terrorism; the Offer. • demand for and supply of Cash Converters shares; Risk of dilution • announcements and results of competitors; and Investors who do not participate in the Offer, or do not take up all of their entitlement under the Offer, will have • analyst reports. their percentage security holding in Cash Converters diluted by not participating to the full extent in the Offer. Investors may also have their investment diluted by future capital raisings by Cash Converters. Cash Converters No assurance can be given that the New Shares will trade at or above the Offer Price. None of Cash Converters, may issue new shares to finance future acquisitions or pay down debt which may, under certain circumstances, its directors or any other person guarantees the performance of the New Shares. dilute the value of an investor's interest. Cash Converters will only raise equity if it believes that the benefit to The operational and financial performance and position of Cash Converters and Cash Converters’ share price investors of conducting the capital raising is greater than the short term detriment caused by the potential dilution may be adversely affected by a worsening of general economic conditions in Australia, as well as international associated with a capital raising. market conditions and related factors. It is also possible that new risks might emerge as a result of Australian or global markets experiencing extreme stress, or existing risks, may manifest themselves in ways that are not Taxation changes currently foreseeable. The equity markets have in the past and may in the future be subject to significant volatility. There is the potential for changes to taxation laws and changes in the way taxation laws are interpreted. Any change to the current tax rates imposed on Cash Converters (including the foreign jurisdictions in which Cash Underwriting risk Converters operates) is likely to affect returns to Cash Converters’ shareholders. An interpretation of taxation laws Cash Converters has entered into an underwriting agreement under which Hartleys Limited has agreed to by the relevant tax authority that is contrary to Cash Converters’ view of those laws may increase the amount of underwrite $21 million of the Offer, subject to the terms and conditions of the underwriting agreement between tax to be paid or cause changes in the carrying value of tax assets in Cash Converters’ financial statements. In Cash Converters and the Lead Manager (Underwriting Agreement). Cash Converters has also entered into an addition, any change in tax rules and tax arrangements could have an adverse effect on the level of dividend agreement with EZCORP, Cash Converters’ largest shareholder, whereby EZCORP has committed to take up its franking and shareholder returns. An investment in shares involves tax considerations that differ for each investor. full pro rata entitlement of the New Shares and to apply for up to a further $6 million worth of New Shares either Investors are encouraged to seek professional tax advice in connection with any investment in Cash Converters. through the Oversubscription Facility or through an application for shortfall (or a combination of both) for a total commitment of $18.5 million. This $18.5 million is not underwritten by Hartleys Limited. Cash Converters therefore Laws and regulations may change has in aggregate underwriting or a commitment for the whole $39.5 million amount of the Offer. The Lead In the ordinary course of its business, Cash Converters is subject to a range of laws and regulations. Changes to Manager’s obligation to underwrite the Offer is conditional on certain customary matters and the EZCORP laws and regulations that apply to Cash Converters may adversely affect Cash Converters, including by commitment being in place. EZCORP’s commitment is conditional on the Underwriting Agreement not having increasing its costs either directly (eg by increasing a tax Cash Converters is required to pay) or indirectly (eg by been terminated. If certain events occur, the Lead Manager may terminate the Underwriting Agreement. increasing the cost of complying with a particular legal requirement). Any such change may adversely affect Cash Termination of the Underwriting Agreement and its consequential release of EZCORP’s commitment could have Converters’ future financial performance. 22 International Offer Restrictions
23 International Offer Restrictions
This Presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In Singapore particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, This document and any other materials relating to the New Shares have not been, and will not be, lodged or in any country outside Australia except to the extent permitted below. registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or Hong Kong purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or WARNING: This document has not been, and will not be, registered as a prospectus under the Companies sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in 571) of the Laws of Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this accordance with the conditions of any other applicable provisions of the SFA. document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than to This document has been given to you on the basis that you are (i) an existing holder of Cash Converters’ shares, "professional investors" (as defined in the SFO and any rules made under that ordinance). (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or return this document immediately. You may not forward or circulate this document to any other person in will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or Singapore. the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other disposed of only to persons outside Hong Kong or only to professional investors. No person allotted New Shares party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in within six months following the date of issue of such securities. Singapore and comply accordingly.
The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised United States to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should This document may not be released or distributed in the United States. obtain independent professional advice. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United New Zealand States or any other jurisdiction in which such an offer would be illegal. Neither the New Shares nor the The New Shares are not being offered to the public within New Zealand other than to existing shareholders of entitlements have been, or will be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Cash Converters with registered addresses in New Zealand to whom the offer f these securities is being made in Act”) or the securities laws of any state or other jurisdiction of the United States. Accordingly, neither the New reliance on the Financial Markets Conduct Act 2013 and the Financial Markets Conduct (Incidental Offers) Shares nor the entitlements may be offered or sold, directly or indirectly, to persons in the United States unless Exemption Notice 2016. This document has been prepared in compliance with Australian law and has not been they have been registered under the Securities Act (which Cash Converters has no intention or obligation to do registered, filed with or approved by any New Zealand regulatory authority. This document is not a product or procure), or are offered and sold in a transaction exempt from, or not subject to, the registration requirements disclosure statement under New Zealand law and is not required to, and may not, contain all the information that of the Securities Act and the applicable securities laws of any state or other jurisdiction of the United States. a product disclosure statement under New Zealand law is required to contain.
24 International Offer Restrictions (cont.)
United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares.
This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of the FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) of the FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.
Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to Cash Converters.
In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
25 FY17 Investor Presentation 22 August 2017 –
Mark Reid Chief Executive Officer
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4 Additional information
4.1 Eligibility of Shareholders
The Entitlement Offer is being offered to Eligible Shareholders only.
An Eligible Shareholder is a Shareholder on the Record Date who:
(i) has a registered address that is in Australia or New Zealand (or, for an Institutional Shareholder, any other Permitted Jurisdiction and to whom Listing Rule 7.7.1(a) does not otherwise apply);
(ii) is not in the United States and is not a person (including nominees or custodians) acting for the account or benefit of a person in the United States;
(iii) is not ineligible under any applicable securities laws to receive an offer under the Entitlement Offer,
except that EZCORP will be treated as an Eligible Shareholder.
Cash Converters has determined that it is unreasonable to extend the Entitlement Offer to Ineligible Shareholders because of the small number of such Shareholders, the number and value of Shares that they hold and the cost of complying with the applicable regulations in jurisdictions outside Australia and New Zealand (and in respect of Institutional Shareholders, the Permitted Jurisdictions). Cash Converters reserves the right to treat any Shareholder as an Ineligible Shareholder in accordance with the Corporations Act and Listing Rules.
4.2 Ranking of New Shares
The New Shares issued under the Entitlement Offer will be fully paid and rank equally with Existing Shares.
4.3 Allotment
Cash Converters has applied for quotation of the New Shares on ASX in accordance with Listing Rule requirements. If ASX does not grant quotation of the New Shares, Cash Converters will repay all Application Monies (without interest).
Trading of New Shares will, subject to ASX approval, occur shortly after allotment. It is expected that allotment of the New Shares under the Entitlement Offer will take place on 26 June 2018. Application Monies will be held by Cash Converters on trust for Applicants until the New Shares are allotted. No interest will be paid on Application Monies.
Subject to approval being granted, it is expected that the New Shares allotted under the Entitlement Offer will commence trading on a normal basis on 27 June 2018.
It is the responsibility of Applicants to determine the number of New Shares allotted and issued to them prior to trading in the New Shares. The sale by an Applicant of New Shares prior to receiving their holding statement is at the Applicant's own risk.
4.4 Reconciliation
In any entitlement offer, investors may believe that they own more Existing Shares on the Record Date than they ultimately do. This may result in a need for reconciliation to ensure all Eligible Shareholders have the opportunity to receive their full Entitlement.
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Cash Converters may need to issue a small quantity of additional New Shares to ensure all Eligible Shareholders have the opportunity to receive their appropriate allocation of New Shares. The price at which these New Shares would be issued, if required, is the same as the Offer Price.
Cash Converters also reserves the right to reduce the number of an Entitlement or New Shares allocated to Eligible Shareholders or persons claiming to be Eligible Shareholders, if their Entitlement claims prove to be overstated, if they or their nominees fail to provide information requested to substantiate their Entitlement claims, or if they are not Eligible Shareholders.
4.5 Underwriting arrangements
Cash Converters and the Lead Manager have entered into the Underwriting Agreement. The Lead Manager has agreed to underwrite the offer of New Shares under the Entitlement Offer (excluding the New Shares applied for by EZCORP pursuant to the EZCORP Commitment) (Underwritten Amount) on the terms and conditions set out in the Underwriting Agreement. The obligations of the Lead Manager are subject to the satisfaction of certain conditions precedent documented in the Underwriting Agreement, including EZCORP fulfilling its obligation to apply for New Shares pursuant to the EZCORP Commitment. Furthermore, in accordance with the Underwriting Agreement, as is customary with these types of underwriting arrangements:
(a) Cash Converters has (subject to certain limitations) agreed to indemnify the Lead Manager, its affiliates and their respective officers, directors, partners, agents, representatives, advisers or employees against losses incurred in respect of the Entitlement Offer;
(b) Cash Converters and the Lead Manager have given certain representations, warranties and undertakings in connection with (among other things) the conduct of the Entitlement Offer;
(c) the Lead Manager may terminate the Underwriting Agreement and be released from its obligations on the occurrence of certain events (in some cases, subject to the materiality of the relevant event) prior to 10.30am on the settlement date for the Entitlement Offer, including (but not limited to) where:
(i) the All Ordinaries Index is for two consecutive Business Days after the date of the Underwriting Agreement 10% or more below its level as at the close of business on the Business Day before the date of the Underwriting Agreement;
(ii) a debt facility is breached, rescinded, varied or replaced, or the lender seeks to enforce a security granted under it or require payment or there is an event of default (other than with the Underwriter’s prior written consent);
(iii) a material contract of Cash Converters is breached or terminated;
(iv) there is a change in the composition of the board or senior management of Cash Converters (other than with the Underwriter’s consent);
(v) there is a suspension or material limitation in trading on ASX or a disruption to the financial markets, commercial banking activities or political, economic conditions in Australia or overseas;
(vi) a statement in this Entitlement Offer Booklet, the Investor Presentation or any accompanying materials released to the ASX in relation to the Entitlement Offer becomes false, misleading or deceptive (including by omission) in any material respect, or likely to mislead or deceive, omits information required to be disclosed or there are no reasonable grounds for the making of a forward-looking statement in those materials;
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(vii) ASX informs Cash Converters that it will be removed from the official list of the ASX;
(viii) certain notifications are made in relation to an application to a government agency regarding the Entitlement Offer, or a government agency commencing an investigation, proceedings or hearing (including a Takeovers Panel hearing) where any such application or notice is not withdrawn within certain time frames;
(ix) ASX informs Cash Converters that the New Shares will not be quoted;
(x) there is an outbreak of hostilities involving certain international jurisdictions;
(xi) an event in the Entitlement Offer timetable is delayed by more than one Business Day (other than with the Underwriter’s prior written consent);
(xii) the Entitlement Offer is prevented from proceeding in accordance with applicable laws or an order made by a government agency or an investigation by ASIC or ASX into the conduct of Cash Converters;
(xiii) a certificate required to be delivered under the Underwriting Agreement is not delivered when required or is incorrect or misleading in a material respect;
(xiv) Cash Converters or one of its subsidiaries becomes insolvent;
(xv) a judgement in excess of $150,000 is finally judicially determined against Cash Converters;
(xvi) a director or senior manager of a group entity is charged with an indictable offence or is disqualified from managing a corporation;
(xvii) Cash Converters or one of its directors or officers engages in fraudulent conduct; or
(xviii) there is a material adverse change in the financial position or performance of the Cash Converters group.
(d) Cash Converters must pay the Lead Manager a lead manager fee equivalent to 4.75% of the Underwritten Amount of the Entitlement Offer. Cash Converters may also, in its absolute discretion, pay the Lead Manager an incentive fee equivalent to 0.5% of the Underwritten Amount of the Entitlement Offer. Cash Converters must also reimburse the Lead Manager for its reasonably incurred costs in connection with the Entitlement Offer, including legal fees and disbursements, travel and accommodation expenses, marketing and promotional expenditure, CHESS DvP settlement fees and bookbuild software fees and stamp duty or similar taxes payable in respect of the Underwriting Agreement; and
(e) Cash Converters, and not the Lead Manager, is responsible for the form and content of the Offer Documents and all advertising, publicity, announcements, statements and reports made in relation to the Entitlement Offer issued with the knowledge or prior consent of the Company or its respective directors, officers, employees.
4.6 Lead Manager
Neither the Lead Manager nor any of its related bodies corporate and affiliates, nor any of their respective directors, officers, partners, employees, representatives, agents, consultants, partners or advisers (the Lead Manager Parties) have authorised, permitted or caused the issue, despatch or provision of this Entitlement Offer Booklet and they do not take responsibility for any statements made in this Entitlement Offer Booklet or any action taken by you on the basis of such
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information. The Lead Manager has not authorised, approved or verified any forward-looking statements included in this Entitlement Offer Booklet. To the maximum extent permitted by law, each Lead Manager Party excludes and disclaims all liability for any expenses, losses, damages or costs incurred by you as a result of your participation in the Entitlement Offer and this Entitlement Offer Booklet being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise, and make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of this Entitlement Offer Booklet.
None of the Lead Manager Parties make any recommendations as to whether you or your related parties should participate in the Entitlement Offer, nor do they make any representations or warranties, express or implied, to you concerning this Entitlement Offer or any such information and you represent, warrant and agree that you have not relied on any statements made by the Lead Manager Parties in relation to the New Shares or the Entitlement Offer generally.
4.7 Continuous disclosure
Cash Converters is a “disclosing entity” under the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the Listing Rules, including the preparation of annual reports and half yearly reports.
Cash Converters is required to notify ASX of information about specific events and matters as they arise for the purposes of ASX making that information available to the stock markets conducted by ASX. In particular, Cash Converters has an obligation under the Listing Rules (subject to certain exceptions) to notify ASX immediately of any information of which it is or becomes aware which a reasonable person would expect to have a material effect on the price or value of Cash Converters shares. That information is available to the public from ASX.
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5 Australian taxation consequences
5.1 General
Below is a general summary of the Australian income tax (including capital gains tax (CGT)), goods and services tax (GST) and stamp duty implications of the Entitlement Offer for Eligible Shareholders. The category of shareholders considered in this summary are limited to individuals, complying superannuation entities and certain companies, trusts or partnerships. The comments in this section deal only with the Australian taxation implications of the Entitlement Offer for Eligible Shareholders who:
• are resident for Australian income tax purposes; and
• hold their Shares and New Shares, or additional New Shares acquired under the Oversubscription Facility, on capital account.
The comments do not apply to Eligible Shareholders who:
• are not a tax resident for Australian income tax purposes;
• hold their existing Shares and New Shares, or additional New Shares acquired under the Oversubscription Facility, in a business of share trading, dealing in securities or otherwise hold their existing Shares and New Shares, or additional New Shares acquired under the Oversubscription Facility as revenue assets or as trading stock (which will generally be the case (but not limited to) if you are a bank, insurance company or carry on a business of share trading);
• are subject to the Taxation of Financial Arrangements (TOFA) provisions in Division 230 of the Income Tax Assessment Act 1997 (Cth) in relation to the holding of Shares, New Shares or additional New Shares acquired under the Oversubscription Facility; or
• acquired the Shares in respect of which the Entitlements are issued under any employee share scheme or where the New Shares are acquired pursuant to any employee share scheme.
The information contained in this summary is of a general nature and is not intended to address the circumstances of any particular individual or entity.
This summary is based upon the legislation and established interpretation of legislation as at the date of this Entitlement Offer Booklet, but is not intended to be an authoritative or complete statement of the law as relevant to the circumstances of each shareholder.
As the taxation implications of the Entitlement Offer will depend upon a shareholder's particular circumstances, shareholders should seek and rely upon their own professional taxation advice before concluding on the particular taxation treatment that will apply to them.
Shareholders that are subject to tax in a jurisdiction outside Australia may be subject to tax consequences in that jurisdiction in respect of the Entitlement Offer that are not covered by this summary. Such shareholders should seek and rely upon their own professional taxation advice in relation to the taxation implications of the Entitlement Offer in any jurisdictions that are relevant to them.
Cash Converters and its officers, employees, taxation or other advisers do not accept any liability or responsibility in respect of any statement concerning taxation consequences, or in respect of the taxation consequences.
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5.2 Issue of Entitlement
The issue of the Entitlement to Australian resident shareholders should not, of itself, result in any amount of assessable income or capital gain for Eligible Shareholders.
5.3 Exercise of Entitlement and applying for additional New Shares
The exercise of Entitlements should not, of itself, result in any amount being included in an Australian resident shareholder's assessable income and should not give rise to any capital gain for Eligible Shareholders under the CGT provisions.
New Shares will be acquired where an Eligible Shareholder exercises all or part of its Entitlement under the Entitlement Offer. Additional New Shares will be acquired where the Eligible Shareholder acquires additional New Shares under the Oversubscription Facility.
For Australian CGT purposes, New Shares should be taken to have been acquired on the day that an Eligible Shareholder exercises its Entitlement and additional New Shares will be taken to have been acquired on the date the additional New Shares were issued to the Eligible Shareholder under the Oversubscription Facility. The CGT cost base of each New Share should be equal to the Offer Price (plus certain non-deductible incidental costs the Eligible Shareholder incurs in acquiring the New Shares).
5.4 Lapse of Entitlement
If an Eligible Shareholder does not accept all or part of its Entitlement in accordance with the instructions set out above in Section 2, then that Entitlement will lapse. The Eligible Shareholder will not receive any consideration for an Entitlement that is not taken up. There should be no adverse tax implications for an Eligible Shareholder from the lapse of the Entitlement.
5.5 Taxation in respect of dividends on New Shares
Any future dividends or other distributions made in respect of New Shares should be subject to the same income taxation treatment as dividends or other distributions made on Existing Shares held in the same circumstances.
5.6 Disposal of New Shares
As outlined above, the New Shares should constitute CGT assets for CGT purposes. The disposal of New Shares should constitute a disposal for CGT purposes.
As outlined above, the CGT cost base of a New Share should generally be equal to the sum of the amount paid to exercise the corresponding Entitlement (i.e. the Offer Price) and certain non-deductible incidental costs in acquiring the New Share. On disposal of a New Share, an Eligible Shareholder should make a capital gain if the capital proceeds received on disposal exceed the total cost base of the New Share. An Eligible Shareholder should make a capital loss if the capital proceeds are less than the total reduced cost base of the New Share. In the case of an arm’s length on-market sale, the capital proceeds should generally equal the cash proceeds from the sale. Where the Eligible Shareholder is a partnership, the partners of that partnership (and not the partnership itself) should ordinarily be treated as realising any capital gain arising from the disposal (in their proportionate shares).
A CGT discount may be applied against any capital gain (after reduction of the capital gain by applicable capital losses) where the Eligible Shareholder which realises the capital gain is an individual, complying superannuation entity or trustee. Broadly, the CGT discount may be applied in these circumstances, provided that the New Shares have been held for at least 12 months (not including the date of acquisition or disposal for CGT purposes) and certain other requirements have been satisfied. Where the CGT discount applies, any capital gain arising to individuals may be reduced by 50%, after offsetting current year or prior year capital losses. For an Australian tax resident complying superannuation entity (including, generally, where a flow through trust or partnership distributes to such shareholders), any capital gain may be reduced by one third, after offsetting current year or prior year capital losses.
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In relation to trusts or partnerships, the rules surrounding capital gains and the CGT discount are complex, but the benefit of the CGT discount may flow through to relevant beneficiaries or partners, subject to certain requirements being satisfied. Such Eligible Shareholders should seek specific advice regarding the tax consequences and eligibility for discounted capital gains.
Capital losses may only be offset against capital gains realised in the same income year or future income years, subject to certain loss recoupment tests being satisfied. Capital losses cannot be offset against other assessable income. As with capital gains, where the Eligible Shareholder realising the capital loss is a partnership, the partners of that partnership (and not the partnership itself) should ordinarily be treated as realising the capital loss (in their proportionate shares).
Australian tax resident shareholders who hold New Shares on revenue account, as trading stock or are subject to the rules in Division 230 concerning the taxation of financial arrangements should seek separate independent professional advice.
5.7 Non-resident CGT withholding
Specific rules can apply to the disposal of certain taxable Australian property under contracts entered into on or after 1 July 2016, whereby, a 12.5% non-final withholding tax may be applied. However, the rules should not apply to the disposal of a New Share on the ASX (in accordance with a specific exemption).
5.8 Provision of Tax File Number (TFN) or Australian Business Number (ABN)
Australian tax legislation imposes withholding tax at the highest marginal rate (currently 45% plus Medicare levy of 2%) on the payment of distributions on certain types of investments, such as the unfranked part of any dividend, where no TFN or ABN (if applicable) has been provided and no exemption applies. Australian tax resident shareholders may be able to claim a tax credit/refund (as applicable) in respect of any tax withheld on dividends in their income tax returns.
Shareholders that have not previously provided their TFN or ABN (if applicable) to the Cash Converters Share Registry may wish to do so prior to the close of the Retail Entitlement Offer to ensure that withholding tax is not deducted from any future distribution payable to them.
A shareholder is not obliged to provide their TFN, or where relevant, ABN to Cash Converters.
5.9 GST
The taking up of the New Shares should be classified as an “input taxed financial supply” for Australian GST purposes. Accordingly, Australian GST should not be payable in respect of amounts paid for the acquisition of the New Shares. Subject to certain requirements, there may be a restriction on the entitlement of Eligible Shareholders to claim an input tax credit for any GST incurred on costs associated with the acquisition of New Shares (such as costs relating to professional advice obtained by shareholders regarding the Entitlement). This will depend on each Eligible Shareholder’s particular circumstances and as such this should be reviewed by shareholders prior to making any claim.
5.10 Stamp duty Stamp duty should not be payable by Eligible Shareholders in respect of the taking up of New Shares under the Entitlement Offer or additional New Shares under the Oversubscription Facility on the assumption that all acquisitions occur when all of the securities in Cash Converters are quoted on the market operated by the ASX and no Shareholder (together with interests of associated persons and interests acquired under associated transactions) holds an interest of 90% or more in Cash Converters.
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6 Definitions
$ or cents means Australian dollars or cents.
AEST means Australian eastern standard time.
Applicant means an Eligible Shareholder who has submitted a valid Application.
Application means the arranging for payment of the relevant Application Monies through BPAY® in accordance with the instructions on the Entitlement and Acceptance Form or the submission of an Entitlement and Acceptance Form accompanied by the relevant Application Monies.
Application Monies means the aggregate amount payable for the New Shares applied for through BPAY® or in a duly completed Entitlement and Acceptance Form.
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited (ACN 008 624 691) and the securities exchange operated by it (as the context requires).
ASX Announcements means the initial announcement in relation to the Entitlement Offer released to the ASX on 30 May 2018, incorporated in Section 3 of this Entitlement Offer Booklet.
BPAY® means BPAY Pty Ltd ACN 079 137 518.
Business Day has the same meaning as in the Listing Rules.
Cap means a maximum of 50% of an Eligible Shareholder’s Entitlement.
Cash Converters means Cash Converters International Limited (ACN 069 141 546).
CGT means capital gains tax.
CHESS has the meaning given to that term in the Listing Rules.
Closing Date means 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018, the day the Entitlement Offer closes.
Corporations Act means the Corporations Act 2001 (Cth).
CRN means the unique Customer Reference Number on the personalised Entitlement and Acceptance Form.
DvP means delivery-versus-payment basis of settlement according to the CHESS rules.
Eligible Shareholder has the meaning given in Section 4.1.
Entitlement means the right to subscribe for 1 New Share for every 4 Existing Shares held by Eligible Shareholders on the Record Date, pursuant to the Entitlement Offer.
Entitlement and Acceptance Form means the entitlement and acceptance form accompanying this Entitlement Offer Booklet.
Entitlement Offer means the pro rata non-renounceable offer to Eligible Shareholders to subscribe for 1 New Share for every 4 Existing Shares of which the Shareholder is the registered holder on the Record Date, at an Offer Price of $0.32 per New Share pursuant to this Entitlement Offer Booklet.
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Entitlement Offer Booklet means this document.
Existing Shares means the Shares already on issue on the Record Date.
EZCORP means EZCORP Inc., a company incorporated in Delaware, United States and a major shareholder of Cash Converters.
EZCORP Commitment means the commitment given by EZCORP to take up its full Entitlement and to apply for up to a further approximately $6 million worth of New Shares as described in the Chairman’s letter.
GST means goods and services tax, as defined in the GST Act.
GST Act means the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
Ineligible Shareholder means a Shareholder at the Record Date who is not an Eligible Shareholder.
Institutional Shareholder means a Shareholder who, in accordance with sections 708(8) and (11) of the Corporations Act, respectively, is a sophisticated or professional Shareholder.
Investor Presentation means the presentation to investors released to the ASX on 30 May 2018, incorporated in Section 3 of this Entitlement Offer Booklet.
Lead Manager means Hartleys Limited (ACN 104 195 057).
Lead Manager Parties means the Lead Manager’s affiliates, related bodies corporate (as that term is defined in the Corporations Act), and their respective directors, employees, officers, representatives, agents, partners, consultants and advisers.
Listing Rules means the official listing rules of ASX.
New Shares means Shares to be allotted and issued under the Entitlement Offer, including (as the context requires) the shortfall from the Entitlement Offer issued under the Oversubscription Facility or to the Lead Manager, any sub-underwriters or EZCORP.
Offer Documents has the same meaning given in the Underwriting Agreement.
Offer Information Line means 1300 653 310 (within Australia) or +61 3 9415 4000 (outside Australia). The Offer Information Line will be answered live and operate between 6:30am and 3:00pm (Perth time) / 8:30am and 5:00pm (AEST) on Monday to Friday during the Entitlement Offer period.
Offer Price means $0.32 per New Share.
Oversubscription Facility means the opportunity for Eligible Shareholders who take up all of their Entitlement to also apply for additional New Shares in excess of their Entitlement, up to the Cap.
Permitted Jurisdiction means Australia, New Zealand, Hong Kong, Singapore, the United Kingdom and any other jurisdiction as agreed between the Lead Manager and Cash Converters.
Record Date means 5:00pm (Perth time) / 7:00pm (AEST) on 4 June 2018.
Share means a fully paid ordinary share in the capital of Cash Converters.
Share Registry means Computershare Investor Services Pty Limited (ACN 078 279 277).
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Shareholder means a holder of Shares.
Timetable means the indicative table set out in the “Key dates” section of this Entitlement Offer Booklet.
Underwriting Agreement means the underwriting agreement dated 29 May 2018 between Cash Converters and the Lead Manager.
Underwritten Amount has the meaning given to it in section 4.5.
U.S. Securities Act means the U.S. Securities Act of 1933, as amended.
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7 Corporate information
Company
Cash Converters International Limited Level 18 Citibank House, 37 St Georges Terrace Perth WA 6000
Tel: +61 8 9221 9111 http://www.cashconverters.com.au/
Lead Manager
Hartleys Limited Level 6, 141 St Georges Terrace Perth WA 6000
Legal Adviser
Herbert Smith Freehills 101 Collins Street Melbourne VIC 3000
Share Registry
Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000
Cash Converters Offer Information Line
Australia: 1300 653 310 International: +61 3 9415 4000 Open 6:30am to 3:00pm (Perth time) / 8:30am to 5:00pm (AEST) on Monday to Friday, before the Entitlement Offer closes at 5:00pm (Perth time) / 7:00pm (AEST) on 18 June 2018.
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