| Thu 21 Feb 2008, 15:29 | | BFS - Blue Financial Services Limited - Sale Of Assets By A Subsidiary And |
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BFS
BFS
BFS - Blue Financial Services Limited - Sale Of Assets By A Subsidiary And
Renewal Of The Cautionary Announcement
BLUE FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1996/006595/06
JSE Code: BFS
ISIN: ZAE000083655
("Blue")
SALE OF ASSETS BY A SUBSIDIARY AND RENEWAL OF THE CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement dated 21 January 2008, shareholders
are advised that an agreement, dated 21 February 2008, has been entered
into between Blue Employee Benefits (Pty) Limited - Botswana ("BEB") and
Capital Alliance (Pty) Limited ("Capital Alliance"), a company owned by
Messrs. R Swart and D van Niekerk ("the agreement"), in terms of which BEB
has sold two aircraft (one 1977 Baron 58 and one 1975 T210L Centurion
II)("the assets") to Capital Alliance for a total cash consideration of
Botswanan Pula ("BWP") 2,550,000 ("the transaction").
2. RATIONALE FOR THE TRANSACTION
As Blue expands its operations further into Africa, Blue`s requirements for
its fleet of aircraft are changing. Blue will complement the remaining
aircraft in the fleet, a 1975 Citation 500, with another aircraft that is
faster, has a better fuel range and will ultimately be more economical to
run than the two aircraft sold.
3. CONSIDERATION
The purchase price payable by Capital Alliance to BEB will be BWP 2.550
million, to be settled by means of an electronic transfer of fund to BEB
within five business days from the effective date of the agreement. The
purchase price payable represents a premium of 25.36% on the average retail
price set out in the "Aircraft Bluebook, Winter 2007-8 Issue", which is in
line with current local market conditions.
4. EFFECTIVE DATE
The effective date of the transaction is 22 February 2008.
5. CONDITIONS PRECEDENT
There are no conditions precedent to the transaction.
6. FINANCIAL EFFECTS
The unaudited pro forma financial effects, for which the directors are
responsible, are provided for illustrative purposes only to show the effect
of the transaction on earnings and headline earnings per share as if the
transaction had taken effect on 1 March 2007 and on net asset value and
tangible net asset value per share as if the transaction had taken effect
on 31 August 2007. Because of their nature, the unaudited pro forma
financial effects may not give a fair presentation of the Group`s financial
position and performance. The unaudited pro forma financial effects have
been compiled from the reviewed consolidated financial statements for the 6
months ended 31 August 2007 and are presented in a manner consistent with
the format and accounting policies adopted by Blue and have been adjusted
as described in the notes below:
Reviewed Pro-forma Movement
Before the
trans- After the
action transaction (cents) (%)
Notes
Earnings per 2 5.31 5.88 0.57 10.7
share (cents)
Headline earnings 5.17 5.17 0.00 -
per share (cents)
Net asset value 2 112.22 112.70 0.48 0.4
per share (cents)
Tangible net 35.23 35.70 0.47 1.3
asset value per 2
share (cents)
Weighted average 369 949 369 949 -
number of shares
in issue (000`s)
Shares in issue 435 073 435 073 -
at period end
(000`s)
Notes:
1. The "Audited Before the transaction" column reflects the reviewed
results of Blue for the 6 months ended 31 August 2007.
2. The pro forma financial effects in the "Pro forma After the
transaction" column are based on the following:
- the consideration payable has been converted at an exchange rate
of BWP1 : R1.2012;
- earnings per share have been adjusted to take account of the
profit on the sale of the assets of R2.081 million;
- net asset value and tangible net asset value have been adjusted
to take account of a decrease in property, plant and equipment of
R0.676 million, an increase in cash as result of the proceeds
received on the sale of the assets of R2.133 million, an increase
in retained earnings as result of the profit on the sale of the
assets of R2.081 million, a decrease in finance lease obligations
of R0.930 million and an increase in VAT payable of R0.306
million.
7. APPLICATION OF THE SALE PROCEEDS
The sale proceeds will be applied to settle outstanding finance lease
obligations on the assets sold, to reduce other short-term liabilities and
to purchase one replacement aircraft.
8. CLASSIFICATION OF THE TRANSACTION
In terms of the Listings Requirements of the JSE Limited, the transaction
is not regarded as a related party transaction in terms of paragraph
21.11(a).
9. RENEWAL OF THE CAUTIONARY ANNOUNCEMENT
Shareholders are advised that Blue is in further negotiations which, if
successfully concluded, may have a material effect on the price of its
securities. Accordingly, shareholders are advised to continue to exercise
caution when dealing in Blue`s securities until a further announcement is
made.
Pretoria
21 February 2008
DESIGNATED ADVISOR
Ernst & Young Sponsors (Pty) Ltd
(Registration Number: 2000/031843/07)
Date: 21/02/2008 15:29:12 Produced by the JSE SENS Department.
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