| Thu 8 Nov 2007, 7:48 | | VOX - Vox Telecom Limited - Vox Telecom Bee Transa |
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VOX
VOX
VOX - Vox Telecom Limited - Vox Telecom Bee Transaction
VOX TELECOM LIMITED
(formerly DataPro Group Limited)
(Registration number 1998/016433/06)
("Vox Telecom" or "the Company" or "the Group")
JSE Code:VOX
ISIN Code: ZAE000058061
VOX TELECOM BEE TRANSACTION INVOLVING MVELAPHANDA GROUP LIMITED ("MVELAPHANDA
GROUP"), REGIMENTS CAPITAL (PROPRIETARY) LIMITED ("REGIMENTS CAPITAL") AND
LEREKO METIER CAPITAL GROWTH FUND
1. Introduction
Vox Telecom announced on SENS on 5 October 2007 that it will acquire,
through its wholly owned subsidiary, Atlantic Internet Services
(Proprietary) Limited ("Atlantic"), the customer contracts and certain
computer hardware ("the ABSA acquisition") from the ABSA Internet Access
division of Absa Bank Limited (together "Absa"). Vox Telecom further
announced on 10 October 2007 that it had entered into a binding agreement
("the Storm Acquisition"), to acquire the entire issued share capital and
claims on loan account in STWS Limited and its wholly owned subsidiaries,
Storm Telecom (Pty) Limited and Storm Internet (Pty) Limited (together
"Storm"), with effect from 1 December 2007, from Storm`s shareholders
("Storm Vendors"), collectively (the "Proposed Transactions").
The purchase price for the Proposed Transactions is to be settled through a
combination of Vox`s own cash resources, term loan facilities available to
the Company as well as a placement of Vox Telecom shares to the Storm
Vendors, which in turn Vox Telecom is obliged to place in the market
through a vendor consideration placement ("Storm Vendor Shares").
Vox recently concluded the vendor consideration placement to discharge its
obligations in respect of the Storm Vendors, simultaneously increasing its
Black Empowerment credentials through a combination of transactions as set
out below. This series of transactions has an aggregate investment value of
R686 410 000 and on conclusion of the Storm transaction will result in the
issue of 190 million Vox Telecom shares with net proceeds to the Company of
R402 800 000.
The Proposed Transactions remain subject to the conditions precedent set
out in paragraph 6 below. The other transactions described in paragraphs 3,
4 and 5 below contemplate the sale of Vox Telecom securities by existing
Vox shareholders to various BEE groups. These transactions are now
described in more detail.
2. Increase in BEE shareholding in Vox Telecom
The board of directors of Vox Telecom is pleased to announce that it has
entered into various binding agreements, as set out in paragraphs 3, 4 and
5 below, with three black owned enterprises to acquire a shareholding in
Vox Telecom, through a combination of a fresh subscription of shares for
cash, the acquisition of vendor shares from the Storm vendors and the
purchase of existing Vox Telecom securities, in aggregate increasing Vox
Telecom`s black ownership to approximately 41,53% on a fully diluted basis.
This accords with Vox Telecom`s strategy of becoming the leading
independent alternative telecommunications service provider in Southern
Africa. Vox Telecom continues to pursue an inclusive policy and philosophy
towards empowerment and believes that the participation of increased black
shareholding, the inclusion of BEE groups and implementing a comprehensive
BEE program is critical to its future success.
Vox Telecom is of the view that these BEE shareholders will significantly
improve its BEE credentials, facilitate Vox`s licensing obligations and
enable Vox Telecom to further grow its business in the corporate and
government sector. In addition, as Vox Telecom looks at further expansion
in the SADC (Southern African Development Community) region, these BEE
partners will play a key role in supporting strategic acquisitions and
potential joint ventures with regional players in the telecommunications
industry.
3. Mvelaphanda Group
a. Salient details of the Mvelaphanda Group Transaction
Subject to the fulfilment of the Proposed Transactions conditions precedent
set out in paragraph 6 below, an irrevocable offer to acquire 110 million
Storm Vendor Shares, at a price per Vox Telecom share of 212 cents, has
been received and accepted by Vox Telecom. The share price represents a 9%
discount to the 30-day volume weighted average price ("VWAP") per Vox
Telecom share and equates to a total issue price of R233 200 000.
Mvelaphanda Group has separately unconditionally agreed to acquire 27 500
000 Vox Telecom shares at 215 cents per Vox Telecom Share from Vantage
Capital (Proprietary) Limited ("Vantage"), (the "Vox Share Purchase")
effective from 15 November 2007.
Accordingly, Mvelaphanda Group will hold approximately 12.31% of the
enlarged issued share capital of Vox Telecom immediately following the
vendor consideration placing and the Vox Share Purchase.
Mvelaphanda Group will be entitled to appoint one non-executive director
and one alternate director to the board of directors of Vox Telecom for so
long as it holds not less than 8% of the issued share capital of the
Company.
b. Background on Mvelaphanda Group
Mvelaphanda Group is South Africa`s pre-eminent broad based, black
controlled, owned and managed diversified group. Mvelaphanda Group`s
strategy is to grow shareholder value (as measured primarily by intrinsic
net asset value) through a combination of quality investments and cash
generative operations. To achieve this strategy, the 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.
This strategy involves the acquisition of interests primarily in operating
companies where Mvelaphanda Group can have strategic influence over the
investment with management.
Mvelaphanda Group holds investments in a range of companies operating in
the financial services, consumer services, construction and infrastructure,
non-mining resources and energy as well as telecoms, media and technology
areas. Mvelaphanda Group`s operations comprise a range of services
businesses in the areas of facilities management and professional services,
food services and support services, employing approximately 25 000 people.
Mvelaphanda Group has chosen Vox Telecom as a key focus of its investment
in the provision of voice and data services to the telecommunications
market and sees Vox Telecom as the vehicle for its investment strategy in
this industry in the African region.
4. Lereko Metier Capital Growth Fund ("LMCGF")
a. Salient details of the LMCGF Transaction
Subject to the fulfilment of the Proposed Transaction`s conditions
precedent set out in paragraph 6 below, an irrevocable offer to acquire 38
million Storm Vendor Shares, at a price per Vox Telecom share of 212 cents,
has been received and accepted by Vox Telecom. The share price represents a
9% discount to the 30-day volume weighted average price ("VWAP") per share
and equates to a total issue price of R80 560 000.
LMCGF has separately agreed to increase its investment in Vox Telecom by
R103 645 000 by acquiring 27 500 000 Vox Telecom shares at 215c per Vox
Telecom Share from Vantage Capital and 21 000 000 Vox Telecom Shares from
existing Vox Telecom Shareholders, which exclude executive management of
Vox Telecom, at 212c per Vox Telecom Share ("Vox Share Purchase") effective
from 15 November 2007.
Accordingly, LMCGF will increase its current Vox Telecom shareholding from
approximately 19.2% to approximately 23.41% of the enlarged issued share
capital of Vox Telecom immediately following the vendor consideration
placing and the Vox Share Purchase.
LMCGF continues to play a central role as a value adding BEE shareholder.
LMCGF has two non-executive directors appointed to the board of Vox
Telecom, namely Dr. Lulu Gwagwa and Mr. Thierry Dalais.
b. Background on LMCGF
LMCGF is a pioneering black-led private equity fund combining the deep
experience and track records of the Lereko and Metier groups. Following its
recent closing, LMCGF represents one of the largest pools of private equity
capital in South Africa, and the largest in terms of local institutional
commitments. Its principals are Popo Molefe, Thierry Dalais, Valli Moosa,
Paul Botha, Lulu Gwagwa and Anthony Hewat.
Vox Telecom is already a material investment within LMCGF, dating back to
the fund`s entry in early 2007 at the time of the company`s acquisition of
Orion Telecom. This builds on a prior advisory and investing relationship
with the Metier group which pre-existed the fund`s formation. The further
investment by LMCGF in Vox Telecom is a continuation of the role of
reference shareholder that LMCGF has played through 2007, and the
concentration in LMCGF of the investment exposure to Vox Telecom of the
principals and affiliates of the fund as well as a facilitation of Vox
Telecom`s BEE objectives.
5. Regiments Capital
a. Salient details of the Regiments Capital Transaction
Regiments Capital has agreed to acquire 47 000 000 Vox Telecom shares at
212c per Vox Telecom Share being a total purchase price of R99 640 000 from
existing Vox Telecom Shareholders.
Accordingly, Regiments Capital will hold approximately 4.21% of the
enlarged issued share capital of Vox Telecom immediately following the
vendor consideration placing and the Vox Share Purchase.
b. Background on Regiments Capital
Regiments Capital is an independent BEE financial services and investment
company.
Regiments Capital is sixty-eight percent black owned with uncompromising
emphasis on service excellence and delivery within the South African
financial services industry. Its directors and executives comprise Litha
Nyhonyha, Niven Pillay, Eric Wood, Dr. Nesan Nair, Calvin Sehlapelo, Dr.
Shane Dorfman, Nombini Mehlomakulu and Nomzamo Maziya.
Regiments Capital has an empowerment model that focuses on developing and
nurturing intellectual capital to ensure dominance of black management
within the company.
The extensive empowerment credentials of the directors of Regiments Capital
has enabled it to foster strong relationships with stakeholders in national
and regional government, municipalities and leading parastatals. In
addition, the directors of Regiments Capital have served on various company
boards and sub committees as well as on various parastatal and other public
body committees. Regiments Capital`s directors were integrally involved in
the development and finalisation of the Financial Services Charter.
Regiments Investment Strategy is primarily focused on the financial
services and infrastructural sectors. Telecommunications is a key target
sector, and the Vox Telecom investment will be a core holding.
6. Conditions Precedent
The Proposed Transactions remain, inter alia, conditional upon the
following conditions precedent:
a. the Proposed Transactions being approved in terms of the Competition Act,
89 of 1998;
b. by not later than 31 January 2008 Vox Telecom obtains the consent of the
Exchange Control Department of SARB to purchase Storm; and
c. by not later than 31 January 2008 those of the sellers who require the
consent of the Exchange Control Department of the SARB to remit their share
of the Storm purchase consideration overseas obtain such consent.
7. Further Announcements and Renewal of Cautionary Announcement
Further announcements will be made on SENS as soon as the financial effects
of the Proposed Transactions are finalised and any of the conditions
precedent have been fulfilled or waived, as the case may be.
Accordingly, Vox Shareholders are advised to exercise caution when dealing
in their Vox Telecom securities until such time as further announcements
are made.
Johannesburg
8 November 2007
Corporate Advisor
Metier Advisory (Pty) Limited
Designated Advisor
Arcay Moela Sponsors (Proprietary) Limited
Date: 08/11/2007 07:48:01 Produced by the JSE SENS Department.
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