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JCM
JCM
JCM - Johncom - Statement Regarding Johncom Future Strategic Intentions
Including Its BEE Ownership Transaction
Johnnic Communications Limited
(Incorporated in the Republic of South Africa)
(Registration number 1889/000352/06)
Share code: JCM
ISIN: ZAE000024584
("Johncom")
Statement regarding Johnnic Communications Limited`s future strategic intentions
including its Black Economic Empowerment ("BEE") ownership transaction
Introduction
Subject to Johncom shareholder approval and regulatory approval, the board of
directors of Johncom intends to unlock further shareholder value and introduce
broad-based BEE ownership. This will be achieved through separating the
businesses of Johncom into two listed entities by the formation of a new wholly-
owned subsidiary that will acquire and hold 100% of all Johncom`s directly-held
operating media and entertainment assets (referred to as "OpCo"). OpCo will then
be unbundled to Johncom`s shareholders and simultaneously listed on the JSE
Limited ("JSE"). This follows the decision taken in general meeting by the
shareholders of Johncom to dispose of the effective 38,56% stake in M-Net and
SuperSport, and the completion by the board of directors of Johncom of a
strategic review of its businesses and operations.
Rationale
Johncom is of the opinion that the separate listing of its operating media and
entertainment assets in OpCo will facilitate the unlocking of further
shareholder value. It will also enable OpCo management to focus on the core
operations of the business with a view to enabling OpCo in due course to enhance
its position as a significant integrated media and entertainment company.
Resultant structure of OpCo and Johncom
After its separate listing, OpCo will comprise, inter alia, the following
business units:
- Media;
- Retail;
- Books and Maps;
- Home Entertainment;
- Africa;
- Music; and
- Distribution, Manufacturing and Support Services.
OpCo is well positioned for further growth and value creation as an integrated
media and entertainment group with an exciting platform from which to pursue
both organic and acquisitive growth opportunities.
It is envisaged that Johncom will remain listed with an effective 37,79% stake
in Caxton and CTP Publishers and Printers Limited ("Caxton").
BEE
Johncom embraces the spirit of broad-based BEE and will continue to be guided by
this principle. In this regard it is the intention that OpCo should comply with
the finalised Department of Trade and Industry Codes of Good Practice on broad-
based BEE ("the Codes") by implementing a BEE transaction that incorporates a
significantly broad base. Progress has been made with regard to the BEE
transaction and it is envisaged that OpCo will implement such a broad-based BEE
deal shortly after listing on the JSE.
The Caxton holding
After the unbundling of M-Net, SuperSport and OpCo, Johncom will remain with an
effective 37,79% stake in Caxton as its remaining asset. Johncom will then
constitute a dual listing of Caxton and therefore fail to comply with JSE
Listing Requirement 4.28(d), which states that a listed company should have
control (being 50% +1 share) over the majority of its assets. The JSE has
granted Johncom a period of 12 months from the date that the unbundling of OpCo
becomes unconditional to remedy the non-compliance with the JSE Listings
Requirements. Johncom will consider various options during the 12 month period
and pursue the most appropriate route for all stakeholders.
Timing
The remaining conditions precedent to the transaction announced on 14 November
2006 and approved by shareholders on 31 January 2007 to dispose of M-Net and
SuperSport and distribute the Naspers N shares received as consideration, are
approval by the Competition Authorities and the JSE unconditionally approving
the listing of the Naspers N shares. It is presently envisaged that the
formation, unbundling and listing of OpCo and the BEE transaction will follow
the fulfilment of these remaining conditions precedent.
Further announcements
Further announcements will be made to keep all stakeholders updated.
Johannesburg
11 April 2007
Investment Bank and Sponsor
Nedbank Capital
Legal Advisors
Werksmans Attorneys
Date: 11/04/2007 08:00:01 Produced by the JSE SENS Department.
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