| Thu 21 Jun 2001, 0:00 | | Financial Effects Of The Distribution In Specie By |
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SHAREHOLDERS OF SUBSTANTIALLY ALL OF ITS SHAREHOLDING IN M-CELL LIMITED
JOHNNIC COMMUNICATIONS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1889/000352/06)
("Johncom")
FINANCIAL EFFECTS OF THE DISTRIBUTION IN SPECIE BY JOHNCOM TO ITS
SHAREHOLDERS OF SUBSTANTIALLY ALL OF ITS SHAREHOLDING IN M-CELL LIMITED
1. INTRODUCTION
Further to the terms announcement dated 23 May 2001 relating to the
distribution in specie by Johncom of substantially all of its shareholding
in M-Cell Limited ("M-Cell") to its shareholders ("shareholders") in terms
of section 90 of the Companies Act, 1973 (Act 61 of 1973), as amended, and
in accordance with section 60 of the Income Tax Act, No. 113 of 1993, as
amended ("the Johncom unbundling"), and as stated in the circular posted to
shareholders on 15 June 2001, Standard Corporate and Merchant Bank is
authorised to announce the financial effects of the Johncom unbundling based
on the audited financial results of Johncom for the year ended 31 March
2001, set out in an announcement published elsewhere in this publication.
These financial effects are also based on the audited financial results of M-
Cell for the year ended 31 March 2001 published in the press on 14 June
2001.
2. FINANCIAL EFFECTS OF THE JOHNCOM UNBUNDLING
The pro forma financial effects of the Johncom unbundling for a shareholder
holding 100 shares in Johncom ("Johncom shares") on Friday, 6 July 2001
("the record date"), are set out below. The earnings are shown before and
after adjustment for head office interest in respect of debt incurred in
making an additional investment in M-Cell ("head office interest"), and
before and after the revaluation of M-Cell shares.
2.1 Assumptions
* The earnings per 100 Johncom shares, as set out in the "Before" column of
the table below, are based upon the published financial results of Johncom
for the 12-month period ended 31 March 2001. The earnings per 100 Johncom
shares, as set out in the "After" column of the table, are based upon the
assumption that the Johncom unbundling was implemented on 1 April 2000.
* The Net Asset Value ("NAV") per 100 Johncom shares, as set out in the
"Before" column of the table, is based upon the published financial results
of Johncom for the 12-month period ended 31 March 2001. The NAV for Johncom,
as set out in the "After" column of the table, is based on the assumption
that the Johncom unbundling was implemented on 31 March 2001.
2.2 Pro forma financial effects
Before After
Per 100 Per 100
Johncom Johncom Change
shares held shares held %
Headline earnings (cents)
Before head office interest 52 648 8 447 (84%)
After head office interest 45 244 1 043 (98%)
Attributable earnings (cents)
Before head office interest and
revaluation of M-Cell shares 38 000 3 378 (91%)
After head office interest and
revaluation of M-Cell shares 30 596 462 861 1 413%
NAV (Rand) 4 502 1 564 (65%)
2.3 Pro forma balance sheet
The consolidated pro forma balance sheet of Johncom is prepared on a basis
that is consistent with the accounting policies of Johncom and assumes that
the Johncom unbundling was effected on 31 March 2001.
The pro forma balance sheet has been prepared for illustrative purposes only
and, because of its nature, it cannot give a complete picture of Johncom's
financial position.
a. b. c.
Pro forma Pro forma
31 March 2001 Adjustments 31 March 2001
R million R million R million
ASSETS
Non-current assets
Property, plant and equipment 5 880,2 (5 491,3) 388,9
Goodwill 9 515,7 (9 475,7)d 40,0
Intangible assets 2 901,7 (2 868,3) 33,4
Investments and loans 1 154,9 (247,0) 907,9
Deferred taxation 88,8 (37,3) 51,5
Total non-current assets 19 541,3 (18 119,6) 1 421,7
Current assets 3 347,8 (1 903,3) 1 444,5
Bank balances, deposits and cash 912,4 (804,9) 107,5
Other current assets 2 435,4 (1 098,4)e 1 337,0
Total assets 22 889,1 (20 022,9) 2 866,2
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders' interest 4 690,3 (3 060,8) 1 629,5
Minority interest 9 629,4 (9 621,7) 7,7
Total equity 14 319,7 (12 682,5) 1 637,2
Non-current liabilities 4 858,2 (4 595,1) 263,1
Long-term liabilities 4 054,7 (3 889,2) 165,5
Provision for post-retirement
medical costs 96,1 - 96,1
Deferred taxation 707,4 (705,9) 1,5
Current liabilities 3 711,2 (2 745,3) 965,9
Non-interest bearing liabilities 2 852,0 (2 286,7)f 565,3
Interest bearing liabilities 859,2 (458,6)g 400,6
Total equity and liabilities 22 889,1 (20 022,9) 2 866,2
Notes:
a. As per audited financial statements of Johncom at 31 March 2001.
b. The pro forma adjustments made on the unbundling of Johncom's
shareholding in M-Cell.
c. After the unbundling of Johncom's shareholding in M-Cell.
d. The goodwill in M-Cell arises on the consolidation of Mobile Telephone
Networks Holdings (Proprietary) Limited which is different to the goodwill
arising in Johncom on the consolidation of M-Cell due to the difference
between purchase prices paid and differing net assets relating to the
subsidiaries acquired.
e. M-Cell investment revalued at market value at 31 March 2001 including
dividends accrued on that investment as well as management fees receivable
from M-Cell.
f. Management fee payable by M-Cell re-allocated to accounts receivable.
g. Dividend received in December 2000 on unbundled M-Cell shares reversed.
Johannesburg
21 June 2001
Merchant bank and lead sponsor
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Attorneys
Webber Wentzel Bowens
Joint tax advisers
Deloitte & Touche
Merchant bank
Investec Bank Limited
(Registration number 1969/004763/06)
Auditors
Deloitte & Touche
Attorneys
Finstruct Financial Services
