| Fri 11 Jan 2008, 16:38 | | MMG - MICROmega - Disposal Of BTM Manufacturing (Proprietary) Limited ("BTM") |
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MMG
MMG
MMG - MICROmega - Disposal Of BTM Manufacturing (Proprietary) Limited ("BTM")
And Renewal Of Cautionary Announcement
MICROmega HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
(Share code: MMG & ISIN: ZAE000034435)
("MICROmega" or "the group")
DISPOSAL OF BTM MANUFACTURING (PROPRIETARY) LIMITED ("BTM")AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement dated 30 November
2007, MICROmega shareholders are advised that MICROmega has entered
into an agreement with Autovest Limited ("Autovest") in terms of
which, subject to the fulfilment of the conditions precedent set
out below, MICROmega will dispose of its wholly owned subsidiary,
BTM Manufacturing (Pty) Ltd ("BTM").
The disposal represents a category 2 transaction, in terms of the
listing requirements of the JSE Limited.
2. NATURE OF BUSINESS OF BTM
BTM is a manufacturer and distributor to the automotive
aftermarket of towbars and bullbars.
3. RATIONALE FOR THE DISPOSAL
BTM Manufacturing (Pty) Ltd ("BTM") was acquired on 1 October
2005. Upon acquisition, a capital expenditure program was adopted
that resulted in a 55% increase in production capacity in the plant
in 2006. This capital expenditure program, whilst adequate in
respect of market demand to date, did not in all respects meet our
production standards. A plan was put in place to invest in a new
production facility in 2007 which would accommodate an appropriate
infrastructure for production. However this investment was deferred
until such time as market demand for product could justify a new
facility and deliver a competitive ROI to our shareholders. The
need for an enhanced production facility is however one that cannot
be deferred indefinitely and it was anticipated that such an
investment would be required in 2008.
During the month of December 2007 we had an unexpected offer for
BTM and upon reviewing our anticipated ROI that we would achieve
from BTM in 2008 after the required investment in infrastructure,
it was decided that the proceeds on disposal could be better
utilised in alternative acquisitions that presented a higher ROI to
our shareholders.
4.TERMS OF THE DISPOSAL
MICROmega has disposed of its wholly owned subsidiary, BTM, for a
consideration of R34 million to be settled in cash on the
fulfilment date.
5.CONDITIONS PRECEDENT
The implementation of the disposal is subject to approval by the Competition
Commission and the findings of the due diligence
undertaken by Autovest.
.
6.FINANCIAL EFFECTS OF THE DISPOSAL
The table below shows the per share effect of the disposal of BTM for the six
months ended 30 June 2007. The pro forma financial effects, which are the
responsibility of the directors of MICROmega, have been prepared for
illustrative purposes only and, because of their nature, may not fairly present
MICROmega`s financial position as at 30 June 2007, or the effect of future
earnings. The financial effects are determined in accordance with the Listing
Requirements of the JSE.
Notes Unadjusted Adjusted2 Chang
1 Pro-forma e (%)
Unaudited
At At
30 June 30 June
2007 2007
Earnings per share (cents) 3 20.42 16.50 -
19.20
Headline earnings per share (cents) 4 18.81 14.89 -
20.84
Net asset value per share (cents) 5 181.69 187.38 3.13
Net tangible asset value per share 6 122.80 139.07 13.25
(cents)
Weighted average number of shares 7 97 498 794 97 498 794
Total number of shares in issue 7 97 801 105 97 801 105
Notes:
1. The figures in the "Unadjusted" column are extracted from then published
unaudited interim results of MICROmega for the six months ended 30 June
2007.
2. In the "Adjusted pro-forma" column the results of BTM for the period
January to June 2007 reflect the results of BTM that were incorporated into
the unaudited interim results as published for MICROmega.
3. Earnings per share calculations in the "Adjusted pro-forma" column are
based on the following assumptions:
-The disposal was effective 1 January 2007.
-The net profit after tax of BTM for the six months ended 30 June 2007
was R3 820 566.
4. Headline earnings per share calculations in the "Adjusted pro-forma" column
for BTM is unchanged from their earnings per share figure as there were no
earnings that are exclude from headline earnings.
5. Net asset value per share is calculated on a net asset value of R177 694
254 for the "Unadjusted" column and R183 264 166 for the "Adjusted pro-
forma" column with the adjustment comprising a R34 000 000 increase in cash
balances and a decrease in other assets and liabilities of R28 430 088.
6. Net tangible asset value per share is calculated on a tangible asset value
of R120 099 304 for the "Unadjusted" column and R136 015 881 for the
"Adjusted pro-forma" column with the adjustment comprising a R34 000 000
increase in cash balances and a decrease in other assets and liabilities of
R18 083 423.
7. The weighted average number of shares and the actual number of shares have
not been adjusted as no shares are subject to this disposal.
7. APPLICATION OF THE SALE PROCEEDS
The proceeds from the disposal will be used to strengthen the
balance sheet of MICROmega and enhance the ability of MICROmega to
make further acquisitions. MICROmega remain committed to investing
in the automotive sector and in this respect we refer you to the
below cautionary announcement.
8. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are further advised that MICROmega is in negotiations
to acquire the entire shareholding in Kolbenco (Proprietary)
Limited, a first tier OEM supplier. If these negotiations are successfully
concluded, it may have an effect on the price at which the company`s securities
trade on the JSE Limited.
Accordingly, shareholders are advised to exercise caution when dealing in
MICROmega securities, until such time as a full announcement is made.
Sandton,
11 January 2008
Sponsor:
Investec Bank Limited
Date: 11/01/2008 16:38:38 Produced by the JSE SENS Department.
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