Recapitalisation Proposal

Not for distribution or release in the United States (U.S.) or to, or for the account or benefit of, U.S. persons

Sydney, 18 May 2009 (ASX:BVA/OTCQX:BRVSY) – Bravura Solutions Limited (Bravura or Company) – a leading global supplier of wealth management applications and professional services – announces today a proposal that, if approved by shareholders and subject to the fulfilment of other conditions, will result in a significant recapitalisation of the Company(Recapitalisation Proposal). The Recapitalisation Proposal has four elements as outlined below, all of which are interdependent.

1. Underwritten non-renounceable rights offer

Bravura proposes to conduct an underwritten, non-renounceable rights issue to raise approximately $33.4 million for the purpose of reducing the Company’s obligations under its banking facilities with BOS International. After transaction costs and underwriting fees, the proposed rights issue will enable Bravura to reduce those banking facilities by approximately $28 million, effectively halving Bravura’s principal loan obligations. Although Bravura continues to trade within its banking covenants, the Board considers that a reduction in interest bearing debt is prudent in light of current uncertain global economic conditions as they relate to the financial services industry.

The proposed rights issue will be a non-renounceable rights issue at a ratio of 1.57 new ordinary shares for every 1 ordinary fully paid share held on the record date, at an issue price of $0.15 per share. ASX has granted Bravura a waiver of Listing Rule 7.11.3 to allow the rights issue to proceed on a ratio greater than 1:1, subject to shareholder approval. Certain foreign shareholders of Bravura will be ineligible to participate in the rights issue.

The proposed rights issue will be fully underwritten by wholly owned or affiliated subsidiaries of Ironbridge Capital Pty Ltd (Ironbridge). Funds managed or advised by Ironbridge currently hold an interest in approximately 0.49 per cent of Bravura. Bravura has today entered into an Underwriting Agreement with the relevant Ironbridge underwriting entities. This agreement provides for an underwriting commission of three per cent (exclusive of GST) and reimbursement of certain expenses of the underwriters, payable in each case on completion of the rights issue. The Underwriting Agreement contains conditions, representations and warranties, and terminating events that are consistent with market practice for transactions of this nature.

The Underwriting Agreement also includes exclusivity and break fee arrangements in favour of the relevant Ironbridge underwriting entities. A summary of those arrangements is provided in Schedule 1.

2. Grant of options to Ironbridge

Bravura has today also entered into an option subscription deed with the relevant Ironbridge underwriting entities under which, subject to shareholder approval and the fulfilment of the other conditions noted below, Bravura will grant options to those Ironbridge entities that would entitle

3. Resolution of Lift Capital margin lending and security arrangements

Messrs Dunstan and Woodfull have informed Bravura that they have today, together with their privately controlled entities (Director Entities), entered into agreements with Lift Capital Partners Pty Ltd (in liquidation) (Lift Capital) and the Ironbridge underwriting entities respectively whereby, subject to shareholder approval and the satisfaction of various other conditions:

  • the Ironbridge underwriting entities will lend the Director Entities the funds required to discharge and be released from their respective margin loans to Lift Capital;
  • on discharge of those margin loans, Lift Capital will release their security interest in the combined parcel of approximately 30.5 per cent of the Bravura shares in which the Director Entities currently have beneficial ownership; and
  • a security trustee on behalf of the Ironbridge underwriting entities will take various securities over that 30.5 per cent parcel of Bravura shares to secure repayment of the loans to be made by the Ironbridge underwriting entities to the Director Entities.

The commercial effect of these agreements is that Messrs Dunstan and Woodfull will exchange their current margin lending and security arrangements with Lift Capital for new margin lending and security arrangements with the Ironbridge underwriting entities. These agreements, if they are completed in accordance with their terms, will provide a complete solution to the uncertainty for Bravura and its executive directors created by the insolvency of Lift Capital in April 2008.

Shareholder approvals

The Recapitalisation Proposal is subject to Bravura shareholders approving various matters, including increases (and potential further increases) in Ironbridge’s voting power in the Company, arising from:

  • the rights issue and the Ironbridge underwriting arrangements;
  • the grant of options to Ironbridge; and
  • the new margin lending and security arrangements proposed for Messrs Dunstan and Woodfull.
  • the impact of the global financial crisis on the Company’s ability to negotiate and conclude new license agreements and on the outlook generally for investment in I.T. related products and services.

On 16 March this year, the independent directors of Bravura appointed advisers to assist them
in considering the merits of the Recapitalisation Proposal. Other than the Recapitalisation Proposal announced today, and as at the date of this announcement, no other proposal has
emerged.

For the reasons that will be set out in the explanatory statement, your independent directors recommend that shareholders vote in favour of all resolutions required to approve the Recapitalisation Proposal, in the absence of a superior proposal and subject to the independent expert concluding that the Recapitalisation Proposal is fair or reasonable or in the best interests of Bravura shareholders.

Subject to those same two qualifications, your independent directors intend to vote all shares they own or in which they otherwise have a relevant interest in favour of all resolutions required to approve the Recapitalisation Proposal.

Indicative timetable

Set out below is an indicative timetable for the Recapitalisation Proposal.

  • Notice of meeting, explanatory statement and independent expert’s report despatched to shareholders – late May/early June 2009 (provisional date)General meeting held to consider and vote on the Recapitalisation Proposal – before 30 June 2009 (provisional date)Subject to all resolutions being duly passed at the general meeting, the rights issue will be conducted in July 2009 – Bravura’s aim is to complete the rights issue capital raising by mid August 2009.
  • A separate timetable for the rights issue will be released to ASX after the general meeting (assuming all resolutions are duly passed).

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