| Thu 24 Jul 2008, 16:52 | | SER - Seardel Investment Corporation Limited - Seardel Rights Offer |
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SER SRN
SER
SER - Seardel Investment Corporation Limited - Seardel Rights Offer
SEARDEL INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1968/011249/06)
Share code: SER & ISIN Code: ZAE000029815
Share code: SRN & ISIN Code: ZAE000030144
("Seardel" or "the company")
SEARDEL RIGHTS OFFER
INTRODUCTION
Shareholders are referred to the announcement dated 25 June 2008 detailing the
proposed Seardel rights offer ("the rights offer") and are advised that Seardel
posted a circular to shareholders on Thursday 24 July 2008 (the "circular")
relating to:
- an increase in the authorised share capital of the company; and
- the waiver of a mandatory offer by Hosken Consolidated Investments Limited
("HCI") to Seardel shareholders in terms of rule 8.7 of the SRP Code,
(collectively "the transactions") both of which are conditions precedent to the
rights offer.
The circular includes a notice of a general meeting to be held at Seardel`s
offices on Friday 15 August 2008 at which Seardel shareholders will be asked to
consider and, if deemed fit, approve the resolutions necessary to give effect to
the transactions.
WAIVER OF A MANDATORY OFFER IN TERMS OF RULE 8.7 OF THE SRP CODE
As a consequence of underwriting the rights offer and depending upon the extent
to which shareholders follow their rights HCI will, if the rights offer goes
ahead, be issued ordinary shares representing between 46% and 76% of the votes
able to be cast at a general meeting of Seardel shareholders.
This would constitute an affected transaction in terms of the SRP code and,
unless this requirement is dispensed with in terms of rule 8.7 of the SRP code,
would require HCI to make a mandatory offer to all shareholders at a price of 50
cents per share.
The SRP has advised that it is willing to consider an application to grant
dispensation to HCI from the obligation to make a mandatory offer if Seardel
shareholders, who are independent from HCI, waive their right to require HCI to
make a mandatory offer and subject to the SRP considering representations (if
any) made by parties as contemplated in the paragraphs below.
Any interested party who wishes to object to the dispensation shall have seven
calendar days from the date of the posting of the circular to raise such an
objection with the SRP. Objections should be made in writing and addressed to
the "Executive Director, Securities Regulation Panel" at any one of the
following addresses:
Physical: Ground Floor
2 Sherbourne Road (off Jan Smuts
Avenue)
Parktown
Johannesburg
2193
Postal: PO Box 91833
Auckland Park
Johannesburg
2006
Fax: +27 11 482 5635
If any submissions are made to the SRP within the permitted timeframe, the SRP
will consider the merits thereof and, if necessary, provide the objectors with
an opportunity to make representations to the SRP. Thereafter, subject to the
waiver in a general meeting being granted by Seardel shareholders, the SRP will
rule on the requirement for a mandatory offer.
As set out above, the granting of a waiver from the requirement to make a
mandatory offer is a condition precedent to the rights offer and, in its
absence, the rights offer will not proceed unless underwritten by another party.
PRO FORMA FINANCIAL EFFECTS OF THE RIGHTS OFFER
The table below sets out the pro forma financial effects of the rights offer
based on Seardel`s unaudited interim results for the six months ended 31
December 2007. These financial effects are the responsibility of the directors
of Seardel and they have been prepared for illustrative purposes only, in order
to provide information about the financial position and results of Seardel
assuming that the rights offer had been implemented on 31 December 2007 and 1
July 2007, respectively.
Due to its nature, the pro forma financial effects may not give a fair
reflection of Seardel`s financial position, changes in equity, results of
operations and cash flows subsequent to the rights offer.
Before After % Change
the the after the
rights rights rights
offer offer offer
(cents) (cents)
Earnings per share 4,2 2,6 (38.1%)
Headline earnings per share 4,2 2,6 (38.1%)
Diluted earnings per share 4,0 2,6 (35.0%)
Net asset value per share 1 701 265 (84.4%)
Net tangible asset value per share 1 698 264 (84.4%)
Notes and assumptions:
- The figures set out in the "Before the rights offer" column above have been
extracted from the published unaudited interim reports of the group for the
six months ended 31 December 2007.
- The rights offer is assumed to have been implemented on 1 July 2007 for
earnings, headline earnings and diluted earnings per share purposes and on
31 December 2007 for net asset and net tangible asset value per share
purposes.
- 600 000 000 rights offer shares are assumed to be issued pursuant to the
rights offer, thereby raising capital of R300 million.
- The proceeds of the rights offer are assumed to have been utilised to pay
the costs of the rights offer. The net proceeds of the rights offer (after
deduction of estimated costs) have been assumed to be utilised in the
following manner: R148.91 million was first utilised to repay non-current
interest-bearing liabilities, thereafter R109.6 million was utilised to
settle bank overdrafts and lastly, the remaining proceeds were applied
against the current portion of interest-bearing loans.
- The costs of the rights offer are assumed to be approximately R6.3 million,
including an underwriting fee of R5 million.
- All adjustments have a continuing effect.
24 July 2008
Corporate advisor and sponsor
Java Capital (Proprietary) Limited
Legal advisor
Edward Nathan Sonnenbergs Inc.
Reporting accountants and auditors
KPMG Inc.
Date: 24/07/2008 16:52:01 Produced by the JSE SENS Department.
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