| Wed 26 Nov 2008, 16:39 | | BRT / BRN - Brimstone Investment Corporation - Pro Forma Financial Effects |
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BRT BRN
BRT
BRT / BRN - Brimstone Investment Corporation - Pro Forma Financial Effects
BRIMSTONE INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/010442/06)
Share Code: BRT
ISIN Number: ZAE000015277
Share Code: BRN
ISIN Number: ZAE000015285
("Brimstone")
ANNOUNCEMENT REGARDING THE PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION OF
73.16% OF THE SEA HARVEST CORPORATION LIMITED ("SEA HARVEST") ORDINARY SHARES IN
ISSUE BY A BRIMSTONE LED CONSORTIUM (THE "TRANSACTION") AND THE CATEGORISATION
THEREOF
1. Introduction
Brimstone shareholders are referred to the joint terms announcement
released by Brimstone and Tiger Brands Limited ("Tiger Brands") on 31
October 2008 where it was announced that a consortium led by Brimstone,
which includes members of Sea Harvest management (the "Consortium"), have
submitted an offer (the "Offer") to purchase 78 753 841 Sea Harvest
ordinary shares held by Tiger Brands, representing 73.16% of the total
number of Sea Harvest ordinary shares in issue. The Offer has been accepted
by Tiger Brands and is subject to certain conditions precedent, which were
set out in the aforementioned joint terms announcement.
The current shareholders of Sea Harvest are Tiger Brands (73.16%),
Brimstone (21.52%) and Sea Harvest employees (5.32%). In terms of the
Securities Regulation Code on Takeovers and Mergers and rules of the SRP,
once the Transaction has been completed, a comparable mandatory offer will
be required to be made to all remaining Sea Harvest shareholders (the
"Mandatory Offer").
It is envisaged that the Consortium will hold 100% of the Sea Harvest
ordinary shares in issue after the successful conclusion of the
Transaction, the Mandatory Offer and the restructuring described in
paragraph 2 below (the "Restructuring").
2. Restructuring
Brimstone has established a new company ("Newco") which is to be the entity
which represents the interests of the Consortium and which will be the
acquiring entity in terms of the Transaction. Brimstone`s shareholding in
Newco will be between 55% and 60%.
3. Pro forma financial effects
Since Brimstone`s shareholding in Newco has not yet been finalised, but
will be between 55% and 60%, the pro forma financial effects of two
possible scenarios are shown below, one being the scenario where
Brimstone`s shareholding in Newco is 55% and the other where Brimstone`s
shareholding in Newco is 60%. The final shareholding and pro forma
financial effects of the final shareholding will be detailed in the
circular to Brimstone shareholders contemplated in paragraph 4 below.
Based on Brimstone`s published interim results for the six months ended 30
June 2008, the unaudited pro forma financial effects of the Transaction on
Brimstone`s earnings and headline earnings per share ("EPS" and "HEPS"
respectively) and net asset value and tangible net asset value per share
("NAV" and TNAV" respectively) are set out below. The unaudited pro forma
financial information has been prepared for illustrative purposes only and
because of its nature may not give a fair presentation of Brimstone`s
financial position and results of operations after taking into account the
effect of the Transaction on Brimstone. The preparation of the pro forma
financial information is the responsibility of Brimstone`s directors.
a. Pro forma financial effects if Brimstone is a 55% shareholder in Newco
Per Brimstone ordinary and "N" Before After % change
ordinary share the the
Transacti Transact
on (1) ion
(2,3)
EPS (cents) (42.1) (45.4)(4 (7.8%)
)
HEPS (cents) (42.1) (48.3) (14.7%)
(4)
NAV (cents) 928.9 922.7 0.7%
(5)
TNAV (cents) 917.6 855.8 (6.7%)
Number of shares in issue 236,820 236,820 -
(`000)
Weighted average number of 235,709 235,709 -
shares in issue (`000)
Notes:
1. Based on Brimstone`s published unaudited results for the six months ended
30 June 2008.
2. Based on Sea Harvest`s draft consolidated balance sheet as at 30 September
2008 and draft consolidated income statement for the six months ended 30
September 2008.
3. Based on the assumption that the Transaction occurred on 30 June 2008 for
balance sheet purposes and 1 January 2008 for income statement purposes.
4. EPS and HEPS have been adjusted to include Sea Harvest`s results for the
six months ended 30 September 2008. Both EPS and HEPS were adjusted for the
effects of the Transaction on finance costs, interest income, costs of the
Transaction, amortisation of fishing quotas, impairment of investment in
associate (on change from an associate to a subsidiary) and reversal of
dividend income and equity accounted earnings of Sea Harvest included in
Brimstone`s results for the six months ended 30 June 2008. Where
applicable, taxation adjustments were also effected.
5. NAV takes into account Sea Harvest`s fishing quotas which are not
recognised in its balance sheet and have been provisionally valued at
R131.8m for the acquisition by Brimstone, in terms of IFRS3(R).
b. Pro forma financial effects if Brimstone is a 60% shareholder in Newco
Per Brimstone ordinary and "N" Before After the % change
ordinary share the Transaction
Transacti (2,3)
on (1)
EPS (cents) (42.1) (5.5%)
(44.4)(4)
HEPS (cents) (42.1) (14.7%)
(48.3)(4)
NAV (cents) 928.9 923.3(5) (0.6%)
TNAV (cents) 917.6 856.3 (6.7%)
Number of shares in issue 236,820 236,820 -
(`000)
Weighted average number of 235,709 235,709 -
shares in issue (`000)
Notes:
1. Based on Brimstone`s published unaudited results for the six months
ended 30 June 2008.
2. Based on Sea Harvest`s draft consolidated balance sheet as at 30
September 2008 and draft consolidated income statement for the six
months ended 30 September 2008.
3. Based on the assumption that the Transaction occurred on 30 June 2008
for balance sheet purposes and 1 January 2008 for income statement
purposes.
4. EPS and HEPS have been adjusted to include Sea Harvest`s results for
the six months ended 30 September 2008. Both EPS and HEPS were
adjusted for the effects of the Transaction on finance costs, interest
income, costs of the Transaction, amortisation of fishing quotas,
impairment of investment in associate (on change from an associate to
a subsidiary) and reversal of dividend income and equity accounted
earnings from Sea Harvest included in Brimstone`s results for the six
months ended 30 June 2008. Where applicable, taxation adjustments were
also effected.
5. NAV takes into account Sea Harvest`s fishing quotas which are not
recognised in its balance sheet and have been provisionally valued at
R131.8m for the acquisition by Brimstone, in terms of IFRS3(R).
4. Categorisation of the Transaction and circular to Brimstone shareholders
In terms of the JSE Limited Listings Requirements, the Transaction is
categorised as a Category 1 transaction for Brimstone. A circular providing
information on the Transaction and incorporating a notice convening a
general meeting at which Brimstone shareholder approval for the Transaction
will be sought, will be posted to Brimstone shareholders in due course.
5. Withdrawal of cautionary announcement
Brimstone shareholders are referred to the cautionary announcements dated 7
October 2008 and 31 October 2008 and are advised that further to the
information provided in this announcement, caution need no longer be
exercised when dealing in their Brimstone shares.
Cape Town
26 November 2008
Investment bank and sponsor Legal advisers to Brimstone
to Brimstone Cliffe Dekker Hofmeyr
Nedbank Capital
Date: 26/11/2008 16:39:01 Produced by the JSE SENS Department.
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