| Thu 8 Nov 2007, 7:00 | | MVG/MVGP - Mvelaphanda - Proposed subscription for |
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MVG MVGP
MVG
MVG/MVGP - Mvelaphanda - Proposed subscription for shares and acquisition by
Mvelaphanda Group of shares in Vox Telecom
MVELAPHANDA GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1995/004153/06
Ordinary share code: MVG
Preference share code: MVGP
Ordinary share: ISIN: ZAE000060737
Preference share: ISIN: ZAE000073540
("Mvelaphanda Group")
Proposed subscription (the "subscription") for shares and acquisition by
Mvelaphanda Group of shares (the "acquisition") (collectively the "transaction")
in Vox Telecom Limited ("Vox Telecom")
1. Introduction
Mvelaphanda Group is pleased to announce that it has subscribed for 110
million shares of Vox Telecom as part of Vox Telecom`s private placement to
existing and potential strategic partners, subject to the fulfillment of
the conditions precedent outlined in paragraph 4 below. In addition,
Mvelaphanda Group has entered into a separate agreement with Vantage
Capital (Proprietary) Limited ("Vantage") to acquire 27.5 million shares
held by Vantage in Vox Telecom. The combined 137.5 million shares represent
12.3% of the issued share capital of Vox Telecom.
2. Rationale of the transaction
Mvelaphanda Group`s strategy is to create shareholder value through the
combination of quality investments and cash generative operations. To
achieve this strategy, Mvelaphanda Group seeks to maintain a balanced
exposure through its investments and operations to those sectors of the
South African economy which it believes will outperform in the medium to
long term.
Vox Telecom is a leading alternative, independent telecom operator,
providing voice and data services to the southern African market.
Vox Telecom competes through its primary brands, namely DataPro, Vox, Orion
Telecoms and @Lantic Internet Services. The company listed in 2004 with a
market capitalisation of R140 million on the Alternative Exchange (AltX), a
division of the JSE Limited ("JSE") and it currently has a market
capitalisation of R2.3 billion.
Vox Telecom is ideally positioned to benefit from the development of the
South African telecom industry. Mvelaphanda Group will work with the
management of Vox Telecom to facilitate Vox Telecom`s licensing obligations
and enable Vox Telecom to further grow its business in the corporate and
government sector. Mvelaphanda Group believes that the transaction will
positively contribute to the delivery of growth in Mvelaphanda Group`s
intrinsic net asset value and ultimately improve the return earned on
Mvelaphanda Group`s capital employed.
The transaction would give Mvelaphanda Group key strategic positioning over
a unique range of operating telecom assets. Mvelaphanda Group will continue
to seek opportunities to increase its investment in Vox Telecom.
3. Terms of the transaction
Mvelaphanda will acquire 137.5 million shares at a cost of R292.3 million
paid in cash, which represents 12.3% of the enlarged issued share capital
of Vox Telecom.
Mvelaphanda Group has, subject to the fulfillment of the conditions
precedent set out in paragraph 4 below, subscribed for 110 million shares
in Vox Telecom as part of Vox Telecom`s private placement to existing and
potential strategic partners. The subscription price is 212 cents per share
representing a 16% discount to the volume weighted average share price of
Vox Telecom for the 90 trading days to 6 November 2007 on AltX. The cost of
the subscription is R233.2 million.
Further, Mvelaphanda Group has acquired 27.5 million Vox Telecom shares
from Vantage in a separate agreement at 215 cents per share. The cost of
the acquisition is R59.1 million.
4. Conditions precedent
Shareholders are referred to the detailed announcement released by Vox
Telecom (the "Vox Telecom announcement") on 8 November 2007 for the
conditions precedent to the transaction. The transaction is, inter alia,
dependent on the conclusion of Vox Telecom`s ABSA and Storm acquisitions as
detailed in the Vox Telecom announcement.
5. Financial effects of the transaction
The transaction will not have a material effect on Mvelaphanda Group for
the financial year ending 30 June 2008.
6. Cautionary announcement
Shareholders are advised that the cautionary announcement released on SENS
on 7 November 2007 is hereby removed.
8 November 2007
Johannesburg
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Legal Adviser
Hofmeyr Herbstein & Gihwala Inc
Date: 08/11/2007 07:00:03 Produced by the JSE SENS Department.
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