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MML
MML
MML - Metmar - Proposed Disposal By Metmar Of Its 21% Interest In PGR 17
Investments (Proprietary) Limited
Metmar Limited
Incorporated in the Republic of South Africa
Registration number: 1998/007269/06
Share code: MML
ISIN code: ZAE000078747
("Metmar" or "the company")
Proposed disposal by Metmar of its 21% interest in PGR 17 Investments
(Proprietary) Limited
1. Introduction
Further to the Cautionary Announcements published on 28 May 2008 and 30 May
2008 Metmar has been informed that Kermas Limited ("Kermas") has made an
irrevocable offer (the "offer") to acquire 100% of the shares in PGR 17
Investments (Proprietary) Limited ("PGR 17") with effect from 1 September 2008
("the Transaction"). Metmar has a 21% interest in PGR 17.
2. Conditional acceptance of the offer
Metmar has been informed that the majority shareholders of PGR 17 have
accepted the offer and have voted in favour of the disposal of the asset.
Metmar shareholders are cautioned that the acceptance of the offer is subject
to the successful lodging of financial guarantees by Kermas within 7 days of
acceptance of the offer and the fulfilment of the conditions precedent set out
in paragraph 6 below.
3. Nature of business of PGR 17
An investment holding company with an interest of 56.22% in Mogale Alloys
(Proprietary) Limited ("Mogale") which produces chrome nickel alloys, charge
chrome and silico manganese. Metmar`s effective interest in Mogale is 11.8%.
4. Application of proceeds
The board of directors of Metmar will in due course take a decision on the
application or distribution of the proceeds. Until then the funds will be
invested in a money market account.
5. Purchase consideration
Metmar has been informed that Metmar`s interest in the purchase price amounts
to R390.31 million (the "purchase price"). Metmar has been advised that the
above amount is subject to financial audits and a profit formula based on a
price to earnings ratio. The purchase price will be settled as follows:
- R186.66 million is payable on the second business day following the date
on which the last of the conditions precedent are fulfilled or waived
("Delivery Date");
- R42.84 million is payable on the Delivery Date;
- R46.41 million is payable within 30 days of the completion of the audit
of PGR 17 for the year ending 31 August 2008; and
- R114.40 million is payable within 30 days of the completion of the audit
of Mogale for the year ending 31 March 2009.
6. Conditions precedent to the Transaction
Metmar understands that the proposed Transaction is subject to the fulfilment
of the following conditions precedent:
- obtaining the approval of the Competition Authorities by 30 September
2008; and
- certain other parties to the irrevocable offer passing all of the
necessary resolutions, in order to approve and implement the transactions
contemplated in the irrevocable offer as it relates to them, by 30 June
2008.
7. Financial effects
The unaudited pro forma financial effects of the proposed Transaction on
Metmar shareholders are set out below and are based on the following
assumptions:
- the proposed Transaction took place with effect from 1 March 2007 for
income statement purposes and 29 February 2008 for balance sheet
purposes;
- the deferred purchase consideration amounting to R114.4 million has been
raised as a non current financial asset; and
- the estimated transaction costs being expensed;
The table below sets out the unaudited pro forma financial effects of the
proposed Transaction on Metmar. The unaudited pro forma financial effects are
presented for illustrative purposes only and because of their nature may not
give a fair reflection of Metmar`s financial position or results of operations
after the proposed Transaction has been implemented. The unaudited pro forma
financial effects are the responsibility of the directors of Metmar.
Before 1 After % Change
Published Pro forma
Basic Earnings per share 36.5 168.2 360.8
(cents)
Headline earnings per 37.2 42.8 15.1
share (cents)
Net asset value per share 103.4 236.2 128.4
(cents)
Tangible net asset value 100.2 232.9 132.7
per share (cents)
Number of shares in issue 189 407 189 407 0
(000`s)
Weighted average number of 184 741 184 741 0
shares in issue (000`s)
Notes:
1. The "Before" financial information has been extracted without adjustment
from the published results of Metmar for the year ended 29 February 2008.
2. Earnings and headline earnings per share have been adjusted to include
the following:
a. elimination of the equity accounted revenue relating to PGR 17;
b. the interest received on the sale proceeds amounting to R19.4
million;
c. profit on the Transaction amounting to R305.1 million;
d. capital gains taxation arising due to the Transaction amounting to
R47.5 million;
e. transaction costs amounting to R0.8 million; and
f. headline earnings per share excludes the profit on the Transaction
above.
3. The net asset and net tangible asset values per share have been adjusted
to include the following:
a. elimination of the investment in the associate;
b. the deferred purchase considerations at fair value amounting to
R97.3 million and R43.1 million respectively;
c. cash received as a result of the Transaction;
d. profit on the Transaction;
e. capital gains taxation arising due to the Transaction; and
f. transaction costs.
8. Extension of cautionary announcement
Shareholders are advised to exercise caution until a further announcement
regarding the financial guarantees and the conditions precedent is made.
Bryanston
2 June 2008
Sponsor
QuestCo Sponsors (Pty) Ltd
Date: 02/06/2008 08:05:01 Produced by the JSE SENS Department.
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