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FRT
FRT
FRT - faritec holdings limited - Exercise of option by Black Economic
Empowerment investor
FARITEC HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number 1998/004872/06
Share code FRT???ISIN ZAE000016838
("Faritec" or "the company")
EXERCISE OF OPTION BY BLACK ECONOMIC EMPOWERMENT INVESTOR
INTRODUCTION
- Lexshell 563 Investments (Pty) Ltd ("J&J"), a company controlled by Jay
& Jayendra (Pty) Ltd, acquired a 30% stake in Faritec`s operating subsidiary
Faritec (Pty) Ltd from Faritec. The acquisition was funded by Faritec
subscribing for cumulative preference shares in J&J ("the J&J prefs");
- J&J had an option (the "option") to dispose of its shareholding in
Faritec (Pty) Ltd to Faritec prior to 30 June 2007 in exchange for the
redemption of the J&J prefs and the issue of shares in Faritec.
EXERCISE OF OPTION
Faritec shareholders are advised that J&J exercised the option on 16 May
2007.
Based on the terms of the option the purchase price payable to J&J for its
shares in Faritec (Pty) Ltd is R103 649 317 which will be settled as
follows:
- R19 342 362 by way of set off against the price payable to Faritec for
the redemption of the J&J prefs; and
- R84 306 954 by the issue of 61 677 485 Faritec shares at an issue price
of R1.3669 per share (being the volume weighted average price at which
Faritec shares traded for the 30 days preceeding the exercise of the
option).
The shares being issued to J&J comprise 24.4% of the total issued share
capital of Faritec, increasing the J&J Group`s total shareholding in Faritec
to 30.0%.
After the exercise of the option Faritec will once again own 100% of the
shares in its operating subsidiaries. As can be seen from the financial
effects below, the effects of the exercising of the option will be
earnings-enhancing for Faritec for the remainder of this financial year, and
for the next financial year.
FINANCIAL EFFECTS
The pro forma financial effects of the exercise by J&J of its option on
Faritec`s historical earnings per share ("EPS") and headline earnings per
share ("HEPS") for the six months ended 31 December 2006, and net asset
value ("NAV") per share and tangible net asset value ("NTAV") per share at
31 December 2006, are set out in the table below.
The pro forma financial effects have been prepared for illustrative purposes
only, to provide information on how the transaction may have impacted on the
historical results and financial position of Faritec. Because of their
nature, they may not give a fair reflection of Faritec`s financial position
after the acquisition or the effect of the acquisition on Faritec`s future
earnings. The pro forma financial effects are the responsibility of the
directors of Faritec.
Historical Pro forma Change as a
before the after the result of the
transaction transaction transaction
(cents) (cents) (%)
EPS (cents) 6.7 7.2 6.8%
HEPS (cents) 7.4 7.7 3.8%
NAV per share (cents) 77.8 60.8 (21.8%)
TNAV per share (cents) 4.7 5.8 22.4%
Weighted average shares in 182 878 244 555
issue for the six months
ended 31 December 2006
(`000)
Shares in issue at 31 188 416 250 093
December 2006 (`000)
Notes and assumptions:
1. The amounts set out in the "Historical before the transaction" column
have been extracted from Faritec`s unaudited results for the six months
ended 31 December 2006.
2. EPS and HEPS, as set out in the "Pro forma after the transaction"
column, reflect the effects of the acquisition on EPS and HEPS for the six
months ended 31 December 2006 assuming the transaction was effective 1 July
2006 and 61 677 485 Faritec shares were issued to J&J on that date. However,
for the year ended 30 June 2007, accounting standards will require that the
minority share of earnings will be apportioned up to the date of exercise.
3. NAV per share and NTAV per share, as set out in the "Pro forma after
the transaction" column, reflect the effect of the acquisition on NAV per
share and NTAV per share at 31 December 2006 assuming the transaction was
effective 31 December 2006 and 61 677 485 Faritec shares were issued to J&J
on that date.
Woodmead
18 May 2007
Sponsor to Faritec
Java Capital (Proprietary) Limited
Reporting Accountant
Charles Orbach & Company
Date: 18/05/2007 13:33:05 Produced by the JSE SENS Department.
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