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CCI
CCI
CCI - CIC HOLDINGS LIMITED - Acquisition Of Interest In The Share Capital Of
Four Rivers Trading 349 (Pty) Limited
CIC Holdings Limited
(Incorporated in the Republic of Namibia)
(Registration number 95/502)
(Registered as an external company in the Republic of South Africa)
(Registration number 1996/002672/10)
Share code: CCI & ISIN: NA0009174278
("CIC" or "the company")
ACQUISITION OF INTEREST IN THE SHARE CAPITAL OF FOUR RIVERS TRADING 349 (PTY)
LIMITED
1. INTRODUCTION
1.1 CIC is pleased to announce that it has concluded the acquisition of a 48%
interest in the share capital of Four Rivers Trading 349 (Pty) Limited
("FRT")("the transaction").
1.2 The acquisition was made by a 52% held subsidiary company of CIC, namely
Thembeka Merchandising Holdings (Pty) Limited, giving CIC an effective 25%
stake in FRT.
1.3 This transaction constitutes a category 2 transaction in terms of the
Listings Requirements of the JSE Limited ("JSE"). This announcement is for
information purposes only and no action is required by CIC shareholders
with regards to the transaction.
2. THE TRANSACTION
2.1 BACKGROUND OF FRT
FRT trades under the names of Natal Sales and Merchandising Company and VMS
KwaZulu-Natal. FRT operates its business from Pinetown, KwaZulu-Natal. FRT
provides selling and merchandising services to various principals. These
principals include blue-chip international and South African companies that
market household branded products into the Fast Moving Consumer Goods
market in KwaZulu-Natal.
2.2 RATIONALE FOR THE FRT ACQUISITION
The acquisition of the interest in FRT is in line with CIC`s objective of
further expansion into the South African market and establishing a national
footprint in the Sales and Merchandising Industry in South Africa. CIC
already has shareholding in similar businesses in South Africa, namely
Vital Merchandising Services Holdings (Pty) Limited that operates in the
Inland provinces and Focus Retail Services (also known as VMS Western Cape)
that operates in the Western Cape. Through this acquisition CIC is now
represented in all the main centres in the Sales and Merchandising Industry
in South Africa.
2.3 TERMS OF THE FRT ACQUISITION
2.3.1 The effective date of the transaction is 1 July 2008. This is the date
from which CIC will be able to include the results of FRT.
2.3.2 The Cassandra Investment Trust and the Symons Family Trust ("the
sellers") disposed of 48% of the total issued share capital of FRT to
Thembeka Merchandising Holdings (Pty) Limited for an initial purchase
price of R14,9 million ("the purchase consideration").
2.3.3 Fifty percent (50%) of the purchase consideration was settled in cash
on the closing of the transaction with the balance of the purchase
consideration being subject to adjustment based on actual performance
that will be achieved during the 2009 and 2010 financial years.
2.3.4 The sellers have a put option to sell their remaining 49% shareholding
to CIC within 180 days of receipt of the financial statements for the
year ended 28 February 2011.
2.3.5 CIC has an option to purchase an additional 24,5% shareholding within
180 days of receipt of the financial statements for the year ended 28
February 2011 if the sellers do not exercise their put option.
2.4 UNAUDITED FINANCIAL EFFECTS OF THE TRANSACTION
The pro forma financial effects of the transaction are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of CIC`s financial position or results of operations after the
transaction. Set out below are the unaudited pro forma financial effects
of the transaction, based on the audited consolidated financial results of
CIC for the 8 months ended 29 February 2008. The directors of CIC are
responsible for the preparation of the unaudited pro forma financial
effects.
Audited Pro forma Change(%)
Before After FRT
FRT transaction
transaction(1)
Earnings per share 10.4 10.6 1.9
(cents) (2)
Headline earnings 10.8 11.0 1.8
per share (cents)(2)
Fully diluted 8.1 8.2 1.9
earnings per share
(cents) (3)
Fully diluted 8.4 8.5 1.8
headline earnings
per share (cents)(3)
Net asset value per 74.3 74.3 -
share
Net tangible asset 61.0 61.0 -
value per share
Notes and assumptions:
1. Extracted from the audited consolidated financial results of CIC for
the 8 months ended 29 February 2008.
2. Based on a weighted average number of 195 549 916 CIC shares in issue
during the 8 months ended 29 February 2008.
3. Based on the total number of 252,188,081 CIC shares in issue at 29
February 2008.
4. The earnings and headline earnings per share and fully diluted
earnings and headline earnings per share figures in the "Pro forma
after FRT transaction" have been calculated on the basis that the FRT
transaction was effected on 1 July 2007 and 50% of the purchase
consideration was settled in cash on that date.
5. Interest on the purchase consideration settled in cash was calculated
at a pre-tax rate of 10% per annum for the purposes of the earnings
and headline earnings per share and fully diluted earnings and
headline earnings per share figures.
6. The net asset value and the net tangible asset value per share figures
in the "Pro forma after FRT transaction" have been calculated on the
basis that the FRT transaction was effected on 29 February 2008 and
50% of the purchase consideration was settled in cash on that date.
Stellenbosch
12 August 2008
Questco Sponsor (Pty) Limited - Designated adviser
PSG Capital (Pty) Limited - Corporate adviser
Date: 12/08/2008 17:03:35 Produced by the JSE SENS Department.
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