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ERM
ERM
ERM - Enterprise Risk Management - Financial effects of transactions
previously announced withdrawal of cautionary
Enterprise Risk Management Limited
Incorporated in the Republic of South Africa
(Registration number: 1995/001603/06)
Share code: ERM ISIN: ZAE000037701
("ERM" or "the company")
FINANCIAL EFFECTS OF TRANSACTIONS PREVIOUSLY ANNOUNCED WITHDRAWAL OF
CAUTIONARY
1 Introduction
ERM and Sable Holdings Limited ("Sable") jointly announced on 1 December
2006 and 16 February 2007 a series of transactions through Amrich 58
Properties (Pty) Ltd ("Amrich"). Amrich, which is jointly held in equal
shares by ERM and Sable, is the holding company of Rotaflex Investments
(Pty) Ltd ("Rotaflex"), which owns a portfolio of properties with a net
value of approximately R95 million. The transactions so announced were:
(i) In November 2006 Amrich acquired 34% of the issued capital of
Rotaflex for R32.30 million;
(ii) In January 2007 Amrich acquired the balance of the issued capital
of Rotaflex for R62.70 million ("the Rotaflex acquisition"); and
(iii) In terms of two agreements signed on 16 February 2007:
A ERM agreed to sell its 50% shareholding in Amrich to Sable in exchange
for an issue of 1 187 500 new Sable shares at R40.00 per share ("the
sale of shares agreement");and
B ERM further agreed to subscribe for an additional 392 500 shares in
Sable at R40.00 per share ("the subscription agreement").
Collectively, ("the transactions").
The transactions will result in ERM holding a 21.49% interest in Sable,
which in turn will hold 100% of Amrich.
On 15 May 2007 shareholders were advised that ERM had entered into an
option agreement("the option agreement") with Sable giving ERM the option
to subscribe for 3 948 822 new Sable shares at R40.00 per share on or
before 30 November 2007.
The purpose of this announcement is to present the financial effects of the
transactions. The financial effects of the option agreement will be
announced once the company has decided to exercise the option and notify
Sable accordingly.
2 Financial effects
The unaudited pro forma financial effects of the transactions, based on the
published audited results of ERM for the financial year ended 28 February
2007, the unaudited results of Rotaflex for the financial year ended 28
February 2007 and the audited results of Sable for the year ended 30 June
2006 less the unaudited interim results for the six months ended 31
December 2005 plus the unaudited interim results for the six months ended
31 December 2006 are set out below. The unaudited pro forma financial
effects have been prepared for illustrative purposes only to provide
information on how the transactions may have impacted on the results and
financial position of ERM. Preparation of the unaudited pro forma financial
effects is the responsibility of the directors. Because of their nature,
the pro forma financial effects may not fairly present ERM`s financial
position after the transactions or the effect on future earnings:
Before(1) After 1(2) After 2(3) % change
2
Earnings 40,19 40,67(4) 69,09%
(cents per 67,96(4)
share)
Diluted 40,11 40,58(4) 69,10%
earnings
(cents per 67,82(4)
share)
Headline 6,85 7,32(4) 189,49%
earnings
(cents per 19,83(4)
share)
Diluted 6,83 7,30(4) 189,75%
headline
earnings 19,79(4)
(cents per
share)
Net asset 200,15 200,15(5) (0,48)%
value (cents
per share) 199,14(5)
Net tangible 200,15 200,15(5)
asset value
(cents per (0,48)%
share) 199,14(5)
54,562 54,562
Weighted
average number
of shares in 54,562
issue (000)
Number of 54,471 54,471
shares in 54,471
issue (000)
Notes:
1 Based on the published consolidated audited results of ERM for the
year ended 28 February 2007;
2 Pro forma effects of the Rotaflex acquisition using the equity method.
Interest paid in an amount of R4 million has been excluded from the
earnings of Rotaflex, being interest paid on a loan account in favour
of the former shareholders of Rotaflex, which loan account was
acquired by Amrich as part of the Rotaflex acquisition;
3 Pro forma effects of the sale of shares agreement and the subscription
agreement;
4 The earnings and headline earnings were calculated on the assumption
that the transactions were effected from 1 March 2006 taking into
account the assumption that interest earned on cash utilised for the
Rotaflex acquisition and the subscription agreement has been excluded;
5 The Net Asset value and Net Tangible Asset value per share and the
number of shares in issue were calculated on the assumption that the
transactions were effected as at 28 February 2007. Costs in an amount
of R400 000 directly related to the corporate action have been
provided for.
3 Withdrawal of cautionary
Shareholders are advised that in the light of the above, caution is no
longer required to be exercised by shareholders when dealing in their
securities.
Randburg
21 June 2007
Corporate Adviser and Sponsor to ERM
Sasfin Capital
A division of Sasfin Bank Limited
Date: 21/06/2007 09:30:23 Produced by the JSE SENS Department.
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