| Mon 8 Dec 2008, 13:38 | | EUR - Eureka - Repurchase Of Ordinary Shares And Intent To Declare A Special |
|
EUR
EUR
EUR - Eureka - Repurchase Of Ordinary Shares And Intent To Declare A Special
Dividend
Eureka Industrial Limited
("Eureka")
Incorporated in the Republic of South Africa
(Registration number: 1938/010958/06)
JSE share code: EUR
ISIN code: ZAE000002523
REPURCHASE OF ORDINARY SHARES AND INTENT TO DECLARE A SPECIAL DIVIDEND
INTRODUCTION
In terms of a general authority granted to Eureka to repurchase its ordinary
shares by a special resolution passed by shareholders on 26 September 2008,
("the general authority") a maximum of 480,000 ordinary shares (being 20% of the
issued share capital at the time of the granting of "the general authority")
could be acquired. It was decided that Eureka should take up an opportunity to
repurchase, and thereafter cancel, the maximum number of its own ordinary shares
that it is authorised to do in terms of a general authority granted to Eureka by
a special resolution.
Eureka is an investment trust that invests substantially in listed shares on the
Johannesburg Stock Exchange. It is more than a year since it implemented an
aggressive decision to liquidate almost all of its listed investments and to
remain predominantly in cash. The reason communicated to shareholders at the
time was a prediction that market, political and currency conditions would be
extremely high risk and volatile for an extended period. This has proved to be a
well-timed decision.
It is anticipated that similar or worse conditions will continue for a long time
and that above average returns will be facilitated by having a smaller
investment pool to deal with.
IMPLEMENTATION
In terms of paragraph 5.79 and 11.27 of the Listings Requirements of the JSE
Limited, Eureka hereby announces that on 5 December 2008 it acquired 480,000
ordinary shares on the open market at R95,20 per share, for a total purchase
consideration of R45,7 million. This number of shares represents 20% of the
issued ordinary shares of the company at the time.
All the shares repurchased will be cancelled.
SOURCE OF FUNDS
The total purchase consideration has been funded by available cash resource.
OPINIONS OF THE DIRECTORS
The directors of Eureka have considered the impact of the share repurchase and
are of the opinion that:
- Eureka and its subsidiaries will be able, in the ordinary course
of business, to pay its debts for a period of 12 months from the
date of this announcement.
- The consolidated assets of Eureka and its subsidiaries are in
excess of the consolidated liabilities, measured in accordance
with the accounting policies used in the audited results for the
year ended 28 February 2008.
- The ordinary share capital and consolidated reserves of Eureka
and its subsidiaries will be adequate for a period of 12 months
from the date of this announcement.
- The working capital of Eureka and its subsidiaries will be
adequate for a period of 12 months from the date of this
announcement.
EFFECT ON EARNINGS AND NET ASSET VALUE:
The pro forma financial effects of the share repurchase on Eureka are the
responsibility of the board of directors. The unaudited pro forma financial
effects shown below are presented for illustrative purposes only and because of
their nature may not give a fair reflection of Eureka`s results and financial
position after the repurchase.
Before (cents) After (cents) Change
Earnings per share 675.5 677.8 0.3%
Headline earnings per share 601.8 585,7 -2.5%
Net asset value per share 8,143 7,799 -4.2%
Net tangible asset value per
share 8,143 7,799 -4.2%
The above pro forma financial effects (after) are calculated on Eureka`s audited
results for the year ended 28 February 2008 assuming:
The accounting policies employed by Eureka for the year ended
28 February 2008 have been applied in making these
calculations.
The total repurchase was funded by excess cash on which
interest was received at an "after" tax rate of 7.0%.
For the purposes of calculating the "after" earnings
and "after" headline earnings figures it was assumed that the
repurchase was carried out on 1 March 2007.
For the purpose of calculating the "after" net asset value
and "after" net tangible asset value it was assumed that the
repurchase was carried out on 28 February 2008.
The calculations have been based on 2,4 million shares in
issue before the repurchase and 1,92 million after the
repurchase.
SPECIAL DIVIDEND:
The directors have decided that a special dividend, of between six and ten rand
per share, be declared as soon as the administrative processes for the
aforementioned share repurchase are completed.
Notice of the relevant dates for the dividend will be advised in due course.
Sandton
08 December 2008
Eureka Industrial Limited
Date: 08/12/2008 13:38:19 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
