| Fri 25 Apr 2008, 12:11 | | ACT - Afrocentric - Financial effects of the propo |
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ACT ACTP
ACT
ACT - Afrocentric - Financial effects of the proposed acquisition of a 34.9%
Interest In Jasco Electronics Holdings Limited and withdrawal of cautionary
announcement
AFROCENTRIC INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1988/000570/06)
JSE Codes: ACT, ACTP
ISIN numbers: ZAE000078416, ZAE000082269
("AfroCentric" or "the Company")
FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION OF A 34.9% INTEREST IN JASCO
ELECTRONICS HOLDINGS LIMITED ("JASCO") AND THE PROPOSED SUBSCRIPTION FOR 40 000
CUMULATIVE REDEEMABLE PREFERENCE SHARES IN ININGI INVESTMENTS 180 (PROPRIETARY)
LIMITED ("ININGI`) AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the announcement dated 3 April 2008, shareholders were advised
that AfroCentric has entered into an agreement ("the AfroCentric
agreement"), dated 31 March 2008, with Community Investment Holdings
(Proprietary) Limited ("CIH"), The Inkonkoni Trust (henceforth
collectively referred to as "the Vendors"), Malesela Holdings No. 1
(Proprietary) Limited ("Malesela") and Jasco to acquire 34.9% of the
ordinary shares in Jasco ("the Acquisition") subsequent to the redemption
of convertible preference shares held in Jasco by CIH and the subscription
by CIH of ordinary shares in Jasco ("the Conversion"). The Acquisition will
be effective from the first day of the month following the month in which
the closing date falls, which is 9 (nine) business days after all
conditions precedent, as set out in paragraph 6 below, have been fulfilled,
and expected to be before 31 May 2008.
Further to the Acquisition, AfroCentric has entered into an agreement ("the
Subscription agreement"), dated 31 March 2008, with Jasco and Iningi, a
wholly owned subsidiary of Jasco, to subscribe for 40 000 cumulative
redeemable preference shares in the capital of Iningi ("the Iningi
preference shares") for an aggregate subscription price of R100 million
("the Subscription"), being an issue price of R2 500 per Iningi preference
share. The Subscription will be implemented before 31 May 2008.
For the purposes of this announcement, the Acquisition and Subscription
will be referred to collectively as "the Transactions".
Further to the Transactions, Jasco, on 3 April 2008, also announced that
through Iningi, it has entered into an agreement with Malesela ("the
Malesela agreement") to acquire an effective 34% economic interest in
Malesela Taihan Electric Cable (Proprietary) Limited ("MTec"), a company in
the cable manufacturing sector( "MTec Acquistion").
2. Financial effects
The pro forma financial information has been prepared for illustrative
purposes only and because of its nature may not give a true picture of
AfroCentric`s financial position and results of operations.
Based on the published unaudited results of AfroCentric for the interim
year ended 31 December 2007, the pro forma financial effects of the
Transactions on AfroCentric`s headline earnings, fully diluted headline
earnings, fully diluted earnings per share, net asset value ("NAV") and
tangible NAV per share are set out below. The preparation of the pro forma
financial information is the responsibility of AfroCentric`s directors.
Per AfroCentric Before the After the Percentage
ordinary Transactions(1 Transactions Change
share(cents) ) (2)
EPS and HEPS(3) 3.48 5.44 56.4
Fully diluted EPS 2.96 4.62 56.4
and diluted
HEPS(3)
NAV and tangible 113..19 162.62 43.7
NAV per share(4)
Weighted average 94 000 000 143 954 741 53.1
shares in issue
for calculating
EPS and HEPS
Weighted average 110 558 235 169 358 519 53.1
fully diluted
shares in issue
for calculating
FDEPS and FDHEPS
Shares in issue 94 000 000 143 954 741 53.1
for calculating
NAV and NTAV
(`000)
Notes
1. Based on the published results of AfroCentric for the 6 months ended 31
December 2007.
2. Based on the assumption that the Transactions were effected on 1 July 2007
for income statement purposes and 31 December 2007 for balance sheet
purposes.
3. Earnings and headline earnings have been adjusted to include the following:
a) pro forma equity accounted income attributable to AfroCentric from
Jasco for the 6 months period ended 31 August 2007;
b) the pro foma earnings of Jasco have been adjusted to include the MTec
results for the 6 months period ended 31 December 2007. The effect of
a) and b) have resulted in pro forma earnings attributable to
AfroCentric from Jasco as R5.4 million for the 6 months period;
C) the pro forma net interest of R3.8 million foregone by AfroCentric on
the cash utilised to subscribe to the Iningi Preference Shares in
terms of the Subscription Agreement;
d) the pro forma net dividend income receivable from Jasco as a result of
the Subscription for the Iningi preference shares of R5.2 million, and
e) once off transaction costs incurred by AfroCentric in pursuant of the
Transactions, estimated to be approximately R2.2 million.
4. Net asset value and net tangible asset value have been adjusted for the
investments resulting from the Acquisition and the Subscription
5. The pro forma financial information has been prepared in accordance with
IFRS and in terms of The guide on Pro Forma Financial Information issued by
The South African Institute of Chartered Accountants, in line with the JSE
Listings Requirements.
3. Circular to shareholders
A circular setting out details of the Transactions and incorporating
Revised Listing Particulars and a notice of general meeting to convene a
general meeting in order that the requisite ordinary shareholder approval
for the Transactions can be obtained will be posted to AfroCentric ordinary
shareholders in due course.
4. Withdrawal of cautionary announcement
Shareholders are referred to the transaction announcement and renewal of
cautionary dated 3 April 2008 and in light of the announcement of the pro
forma financial effects as set out above, are advised that it is no longer
required to exercise caution in dealing in AfroCentric shares.
Johannesburg
25 April 2008
Investment bank and
transactional sponsor
Nedbank Capital
Legal advisers to AfroCentric
HR Levin Attorneys, Notaries and Conveyancers
Independent reporting accountants to AfroCentric and independent
reporting accountants for the MTec acquisition
Ernst & Young
Sponsor
Sasfin
Legal advisers to CIH / Malesela
Rothbart Inc.
Corporate Advisers to CIH/Malesela
Sinergi Corporate Advisors
Legal advisers to Jasco
Rossouws Attorneys
AfroCentric Auditors
SizweNtsaluba VSP
Date: 25/04/2008 12:11:01 Produced by the JSE SENS Department.
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