| Mon 5 Nov 2007, 11:51 | | FWX - Foneworx Holdings Limited - Introduction of |
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FWX
FWX
FWX - Foneworx Holdings Limited - Introduction of Kabo Capital (Proprietary)
Limited as Black Economic Empowerment shareholder
FoneWorx Holdings Limited
(formerly Interconnective Solutions Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1997/010640/06)
Share code: FWX & ISIN: ZAE000086237
("FoneWorx" or "the Company")
INTRODUCTION OF KABO CAPITAL (PROPRIETARY) LIMITED AS BLACK ECONOMIC
EMPOWERMENT SHAREHOLDER
Introduction
Shareholders are advised that, further to the cautionary announcements which
were released on SENS on 27 June 2007, 8 August 2007 and 20 September 2007,
FoneWorx had entered into an agreement with Kabo Capital (Proprietary) Limited
("Kabo"), whereby Kabo subscribes for 20 330 612 million new FoneWorx shares
at a subscription price of 106 cents per share, in terms of a proposed
specific issue of shares for cash ("the issue of shares for cash").
The subscription price of 106 cents per share represents a discount of 14,5%
to the 30 day volume weighted average price of FoneWorx on 23 July 2007, being
the date on which agreement was reached between FoneWorx and Kabo on the price
range of the proposed Black Economic Empowerment transaction. The proceeds of
the issue of shares will be used to provide capital to support the company`s
expansion strategy.
In addition, Kabo acquires 20 470 000 FoneWorx shares at 106 cents per share
from the following directors being M A Smith 5 500 000 shares, R Graver 4 260
000 shares and G H Tudor 10 710 000 shares, directly from them ("the sale of
shares"). These directors have agreed to sell the shares referred to at the
abovementioned discount in order to reduce the number of new shares issued so
as to reduce the impact of dilution on all shareholders.
The issue of shares for cash and the sale of shares shall occur simultaneously
and each transaction shall be conditional on the other taking place. After
implementation of the above, Kabo will own 30% of the issued shares in
FoneWorx and will ensure compliance by FoneWorx with The Broad-Based Black
Empowerment Codes of Good Practice on Black Empowerment.
The issue of shares for cash and the sale of shares ("the transaction") are
subject to:
* FoneWorx board approval for the proposed sale of shares by the directors
concerned;
* Kabo issuing a notice of satisfaction after having performed a financial,
legal and/or taxation due diligence in respect of FoneWorx;
* Obtaining irrevocable undertakings from certain FoneWorx shareholders
that they will vote in favour of the issue of shares for cash transaction
in general meeting;
* Shareholder approval to the extent necessary; and
* Regulatory approvals.
Background on FoneWorx
FoneWorx is a telecommunications value-added service provider, and is active
in Infotainment, Business, Content and Switching - the latter two having been
introduced during the previous financial year. All services are hosted on
FoneWorx`s own platform, which currently comprises in excess of 1200 channels
of digital voice and data, and is the largest independent platform in South
Africa. It has service provider agreements with Telkom, MTN, Vodacom and Cell
C. Services provided incorporate a number of the bearer technologies adopted
by the group, and include fax, SMS, USSD, WAP, GPRS, voice services and
internet service provision. Content provision includes music downloads, and
switching encompasses FICA/RICA authentication and financial switching for
credit cards.
FoneWorx also runs services within Africa through correspondent cellular
networks, mainly within the SMS and IVR environment, by hosting services from
various countries in Africa on its platform in Randburg, South Africa.
Campaigns are conducted in association with electronic media and advertising
agencies for products and services offered and sold throughout Africa.
Background on Kabo
Kabo is a black owned investment company which is owned and operated by
experienced entrepreneurs and professional business people. The Kabo team
comprises individuals with several years experience running businesses across
various industries including the ICT sector. Connie Molusi who is the CEO of
Kabo brings with him a wealth of experience in Media and Telecommunications in
the private and public sector. As a strategic partner in FoneWorx, Kabo will
assist FoneWorx management in unlocking value for all shareholders.
Financial effects
The table below sets out the unaudited pro forma financial effects of the
issue of shares for cash for the year ended 30 June 2007. The unaudited pro
forma financial effects are presented for illustrative purposes only and
because of their nature may not give a fair reflection of the company`s
results, financial position and changes in equity after the issue of shares
for cash.
The directors of the company are responsible for the preparation of the
unaudited pro forma financial effects.
Per ordinary share Notes Before After Change
(cents) (cents) (%)
Earnings 1 7.89 7.58 -3.9
Headline earnings 1 8.20 7.84 -4.4
Net asset value 2 15.07 28.82 91.3
Net tangible asset value 2 15.03 28.79 91.6
Notes:
1 The amounts in the "Before" column represent the audited earnings per
share and headline earnings per share as disclosed in the financial
results for the year ended 30 June 2007. The amounts in the "After"
column represent the unaudited earnings per share and headline earnings
per share after the issue of shares for cash based on the assumption that
the issue of shares for cash was effective 1 July 2006 and that the cash
proceeds have been invested at an after tax return of 5.5% per annum.
2 The amounts in the "Before" column represent the audited net asset value
and net tangible asset value per share as disclosed in the financial
results for the year ended 30 June 2007. The amounts in the "After"
column represent the unaudited net asset value and net tangible asset
value based on the financial results for the year ended 30 June 2007
adjusted for the issue of shares for cash, had it been effected on 30
June 2007.
Documentation
A circular containing full details of the transaction and notice of general
meeting will be posted to FoneWorx shareholders in due course.
Withdrawal of cautionary
The cautionary is hereby withdrawn and accordingly caution is no longer
required when dealing in the company`s shares.
Randburg
5 November 2007
Designated advisor
Deloitte & Touche Sponsor Services (Pty) Ltd
Corporate advisor to Kabo
Deloitte & Touche Corporate Finance
Date: 05/11/2007 11:51:00 Produced by the JSE SENS Department.
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