Bravura Solutions (Bravura or Company) - a leading global supplier of wealth management applications and professional services - announced on 18 May 2009 details of a Recapitalisation Proposal.
The Explanatory Memorandum for this proposal has now been lodged with the Australian Securities Exchange (ASX). The Explanatory Memorandum is available through ASX and will be distributed to shareholders over the coming days. A General Meeting to vote on the Recapitalisation Proposal will be held on Friday, 24 July 2009.
The Independent Directors recommend that shareholders vote in favour of all five resolutions required to approve the Recapitalisation Proposal, and they intend to vote all their Bravura shares in favour of the Recapitalisation Proposal, in each case in the absence of a superior proposal.
Bravura's Chairman, Chris Ryan said: "The Recapitalisation Proposal affects shareholders' investment in Bravura, and therefore voting is important in determining whether the proposal proceeds.
"For the financial year ending 30 June 2009 Bravura expects to deliver revenue of between $135 million to $140 million and EBITDA of between $16 million to $19 million. This result would be similar to that achieved in 2008 and would represent a creditable outcome, given the impact of the global financial crisis on our customers. The pipeline of prospective contracts remains strong, although in the current climate, the signing of new licence agreements are being delayed but certainly not foregone.
"Presently, over 65 per cent of Bravura's income is derived from recurring revenue streams that provide a source of predictable and stable revenue. In the current financial year we reduced our cost base by approximately $4 million per annum, which will provide greater operational leverage to take advantage of an improvement in economic conditions.
"The Board recognises the importance of dividends to its shareholders and earlier in the year took the difficult but prudent action of suspending dividend payments. If the Recapitalisation Proposal is approved by shareholders and the Rights Issue completed by mid-August, Bravura will again be on a ssound financial footing. Subject to the continuation of favourable operating conditions, the Board will consider reinstating dividends as soon as practical," Mr Ryan said.
"If the Recapitalisation Proposal proceeds, shareholders will have an opportunity to increase their investment in Bravura at a price of $0.15 per share. The Independent Expert has recognised the inherent value of our business and concluded that on a fully-diluted control basis, the fair market value of Bravura shares is in the range of $0.20 to $0.31.
"The successful recapitalisation will enable Bravura to eliminate uncertainty surrounding the Lift Capital margin loans to Messrs Dunstan and Woodfull, which relate to 30.3 per cent of the Company's shares, reduce the Company's indebtedness and focus on delivering its long-term potential for shareholders.
"The Independent Expert has concluded that although the Recapitalisation Proposal is not fair, in the absence of a superior proposal, the advantages of the Recapitalisation Proposal outweigh the disadvantages, and therefore, the proposed transaction as a whole is reasonable.
"Bravura and its advisers have considered alternatives to the Recapitalisation Proposal. This included reviewing a number of other unsolicited indicative proposals and expressions of interest. However, none of these were considered to offer the same value and certainty as the Underwriter's proposal, including execution, funding and timing certainty.
"Bravura has not received a superior proposal to the one detailed in the Explanatory Memorandum. As at today's date, the Independent Directors have no basis for believing that a superior proposal will be received. Having considered the expected advantages, possible disadvantages and risks of the Recapitalisation Proposal, we are confident that this proposal delivers the best available outcome for Bravura's shareholders in the medium to long term and is in their best interests.
"If the Recapitalisation Proposal proceeds and the timetable is met, Bravura will be able to meet its repayment obligations to its lender, BOS International (Australia) Limited (BOSI), by 15 August 2009, being the timeframe agreed with BOSI.
"The Recapitalisation Proposal affects your investment in Bravura. I encourage all shareholders to read the Explanatory Memorandum in its entirety, consult their professional advisers if necessary, and exercise their vote on this important capital initiative to ensure the Company's long-term future," Mr Ryan said.