| Thu 18 Dec 2008, 11:54 | | ACT/ACTP - Afrocentric / Lethimvula - Posting of circular to Afrocentric |
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ACT ACTP
ACT
ACT/ACTP - Afrocentric / Lethimvula - Posting of circular to Afrocentric
shareholders
AFROCENTRIC INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1988/000570/06)
Share code: ACT/ ACTP & ISIN: ZAE000078416 / ZAE000082269
("AfroCentric" or "the Company")
LETHIMVULA INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/005087/06)
("Lethimvula")
POSTING OF CIRCULAR TO AFROCENTRIC SHAREHOLDERS
1. INTRODUCTION
Shareholders of both AfroCentric and Lethimvula are referred to the joint
AfroCentric and Lethimvula announcement released on the Securities Exchange News
Service ("SENS") of the JSE Limited ("JSE") on 23 September 2008, as well as the
subsequent announcements released on SENS on 15 October, 31 October and 3
December 2008, (collectively, the "Preceding Announcements") and are advised
that the definitions as set out in the Preceding Announcements are equally
applicable to this announcement.
A circular, incorporating revised listings particulars (`Circular") is to be
posted to the AfroCentric ordinary shareholders and the AfroCentric preference
shareholders (collectively, the "AfroCentric Shareholders") today. This Circular
includes a notice of general meeting of the AfroCentric ordinary shareholders
and a notice of general meeting of the AfroCentric preference shareholders,
which notices contain all of the ordinary and special resolutions which the
AfroCentric ordinary shareholders and AfroCentric preference shareholders
respectively will be required to consider and, if deemed fit, approve with or
without modification in order to approve, inter alia, the Acquisition and
resulting Obligatory Offer.
The information set out below has been extracted from the Circular and any
paragraph references are references to the relevant paragraphs in the Circular.
2. SALIENT DATES AND TIMES
AfroCentric Shareholders are advised of the following salient dates and times:
2008
Circular and notice of general Thursday, 18
meetings posted to the AfroCentric December
Shareholders
2009
Forms of proxy to be received by Wednesday, 7
10:00 January
General meeting of AfroCentric Friday, 9 January
ordinary shareholders to be held at
10:00
General meeting of preference Friday, 9 January
AfroCentric shareholders to be held
at 10:30 or immediately after the
conclusion of the general meeting
of AfroCentric ordinary
shareholders, whichever is later
Results of the general meetings to Friday, 9 January
be released on SENS
Results of the general meetings to Monday, 12 January
be published in the press
Notes:
1. All dates and times indicated above are reference to South African dates
and times.
2. These dates and times are subject to amendment. Any such amendment will be
released on SENS and published in the press.
3. CONDITIONS PRECEDENT
Shareholders of both AfroCentric and Lethimvula are advised that the condition
precedent relating to the approval of the relevant Competition Commission
Authorities has been fulfilled.
4. UNAUDITED PRO FORMA FINANCIAL EFFECTS
The updated unaudited pro forma financial effects of the Acquisition and the
resulting Obligatory Offer set out in the table below have been prepared to
assist the AfroCentric Shareholders to assess the impact of the Acquisition and
the resulting Obligatory Offer on the audited earnings per share ("EPS"),
headline earnings per share ("HEPS"), fully diluted EPS, fully diluted HEPS, the
net asset value ("NAV") and tangible net asset value ("TNAV") per AfroCentric
share for the year ended 30 June 2008. The unaudited pro forma financial effects
have been prepared for illustrative purposes only and because of their nature
may not give a fair reflection of AfroCentric`s financial position and results
of operations, nor of the effect and impact of the Acquisition and the resulting
Obligatory Offer on AfroCentric.
The preparation of the pro forma financial effects is the responsibility of the
directors of AfroCentric.
4.1 Financial effects after the first tranche
Before After After the After
the the Obligator the
Acquisiti Acqui y Offer Obligat
on (1) sitio (Share ory
n (5) Election) Offer
% (2 + 6) % (Cash %
Electio
n) (2 +
7)
EPS (cents) 11.04 20.13 82% 26.27 138% 24.86 125%
Fully (cents) 8.76 16.08 84% 22.33 155% 20.74 137%
diluted
EPS
HEPS (cents) 11.04 20.56 86% 26.75 142% 25.40 130%
Fully (cents) 8.76 16.43 88% 22.74 159% 21.20 142%
diluted
HEPS
NAV (cents) 147.51 187.6 27% 205.36 39% 199.75 35%
9
TNAV (cents) 147.51 34.03 (77%) 23.55 (84% (0.76) (101%)
)
Number (`000) 143 955 226 303 109 274 854
of 697
shares
in issue
Weighted (`000) 97 958 180 257 113 228 857
shares 700
in issue
Diluted (`000) 123 362 226 302,517 274 261
shares 104
in issue
Notes:
1 The figures in the "Before the Acquisition" column are extracted from the
reviewed published annual financial statements of AfroCentric for the year
ended 30 June 2008.
2 The figures in the "After the Acquisition" "After the Obligatory Offer
(Share Election)" and "After the Obligatory Offer (Cash Election)" columns
assume that the Acquisition and Obligatory Offer occurred on 1 July 2007
for EPS, HEPS, fully diluted EPS and fully diluted HEPS purposes and on 30
June 2008 for NAV and TNAV purposes.
3 Transaction costs amounting to approximately R2.4 million After the
Acquisition and approximately R4.1 million After the Obligatory Offer have
been included in the above calculations.
4 The above calculations have been performed taking into account a tax rate
of 28%, a STC rate of 10% and a funding rate of 85% of the prime lending
rate.
5 After the First Tranche of the Acquisition based on the Sellers making the
Cash Election in respect of the First Tranche. This will result in an
additional 82 741 783 AfroCentric Ordinary Shares being issued to the
Sellers at an issue price of R2.60 per share. The cash portion of the
payment equates to R126 223 435.
6 After the First Tranche of the Acquisition and Obligatory Offer assuming
that all Offeree Shareholders make the Share Election in respect of the
First Tranche. This will result in an additional 76 412 869 AfroCentric
Ordinary Shares being issued to the Offeree Shareholders at an issue price
of R2.60 per share.
7 After the First Tranche of the Acquisition and Obligatory Offer assuming
all Offeree Shareholders make the Cash Election in respect of the First
Tranche. This will result in an additional 48 157 306 AfroCentric Ordinary
Shares being issued to the Offeree Shareholders at an issue price of R2.60
per share. The cash portion of the payment equates to R73 464 462.
8 Included in the diluted shares in issue are 20 000 000 AfroCentric Ordinary
Shares, that are to be part of the share-based incentive scheme to
incentivise Lethimvula management. The financial effects of this scheme
cannot at this present stage be measured as the vesting rights have not yet
been determined. Therefore any costs in terms of IFRS 2 relating to this
has not been included other than the dilutive effect the 20 000 000
AfroCentric Ordinary shares will have.
9. The new IFRS 3 issued was not used for this transaction as it relates to
periods beginning on or after 1 July 2009.
4.2 Financial effects after the First and Second Tranche
Before After After the After the
the the Obligatory Obligatory
Acquis Acquis Offer Offer
ition ition (Share (Cash
(1) (2 + Election) Election)
5) % (2 + 6 + 8) % (2 + 7+ 8) %
EPS (cents) 11.04 13.56 23% 17.07 55% 15.49 40%
Fully (cents) 8.76 11.60 32% 15.32 75% 13.79 57%
diluted
EPS
HEPS (cents) 11.04 13.85 26% 17.39 58% 15.83 43%
Fully (cents) 8.76 11.85 35% 15.60 78% 14.09 61%
diluted
HEPS
NAV (cents) 147.51 207.83 41% 222.50 51% 219.93 49%
TNAV (cents) 147.51 24.55 (83%) 16.17 (89%) (0.50) (100
%)
Number (`000) 143 314 441 577 413 322
of 955 223
shares
in issue
Weighted (`000) 97 958 268 395 581 367 325
shares 226
in issue
Diluted (`000) 123 313 440 985 412 729
shares 362 630
in issue
Notes:
1 Refer to note 1 above.
2 Refer to note 2 above.
3 Refer to note 3 above.
4 Refer to note 4 above.
5 After the First and Second Tranche of the Acquisition based on the Sellers
making the Cash Election in respect of the First Tranche. This will result
in an additional 170 297 956 AfroCentric Ordinary Shares being issued to
the Sellers at an issue price of R2.60 per share. The cash portion of the
payment equates to R126 223 435.
6 After the First and Second Tranche of the Acquisition and Obligatory Offer
assuming that all Offeree Shareholders make the Share Election in respect
of the First Tranche. This will result in an additional 127 354 782
AfroCentric Ordinary Shares being issued to the Offeree Shareholders at an
issue price of R2.60 per share.
7 After the First and Second Tranche of the Acquisition and Obligatory Offer
assuming that all Offeree Shareholders make the Cash Election in respect of
the First Tranche. This will result in an additional 99 099 219 AfroCentric
ordinary shares issued to the Offeree Shareholders at an issue price of
R2.60 per share. The cash portion of the payment equates to R73 464 462.
8 THE ABOVE CALCULATIONS ASSUME THE ISSUE OF THE MAXIMUM NUMBER OF SECOND
TRANCHE AFROCENTRIC ORDINARY SHARES TO BOTH THE SELLERS AND THE OFFEREE
SHAREHOLDERS ASSUMING THE PROFIT WARRANTIES SET OUT IN PARAGRAPH 2.2.1 OF
THE CIRCULAR HAVE BEEN MET, WITHOUT TAKING INTO ACCOUNT THE WARRANTED
EARNINGS OR THE ADDITIONAL AMOUNT TO BE DETERMINED IN ACCORDANCE WITH THE
PROVISIONS SET OUT IN PARAGRAPH 2.2.2 OF THE CIRCULAR.
9 Included in the diluted shares in issue are 20 000 000 AfroCentric Ordinary
Shares, that are to be part of the share-based incentive scheme to
incentivise Lethimvula management. The financial effects of this scheme
cannot at this present stage be measured as the vesting rights have not yet
been determined. Therefore any costs in terms of IFRS 2 relating to this
has not been included other than the dilutive effect the 20 000 000
AfroCentric Ordinary shares will have.
9. The new IFRS 3 issued was not used for this transaction as it relates to
periods beginning on or after 1 July 2009.
10. A portion of the payment for the Second Tranche relates to dividends that
would have been paid to the Sellers (refer to paragraph 2.2.2 above). This
future event does not meet the recognition criteria of IAS 37, Provisions,
Contingent Liabilities and Contingent Assets as AfroCentric does not have a
present obligation and a reliable estimate of the amount cannot be made.
Therefore no financial effects can be disclosed regarding those dividends.
For and on behalf of the board of AfroCentric For and on behalf of the board
of Lethimvula
Sandton Sandton
18 December 2008 18 December 2008
Advisors to AfroCentric Advisors to the Sellers and
Lethimvula
Investment Bank and sponsor to Legal advisors to the Sellers
the transaction Rothbart Inc
Investec Bank Limited (Registration number
(Registration number 1995/001105/21)
1969/004763/06)
Sponsor to AfroCentric Lead corporate advisors to the
Sasfin Capital Sellers
(Registration number Sinergi Corporate Advisors
1951/002280/06) (Proprietary) Limited
(Registration number
2004/011875/07)
Legal advisor to AfroCentric Corporate advisors to the
HR Levin Attorneys, Notaries & Sellers
Conveyancers Base Capital (Pty) Ltd
(Practice number M2841) (Registration number
2002/008290/07)
Corporate advisor to AfroCentric Joint Legal Advisors to
Centric Capital Ventures LLC Lethimvula
New York Edward Nathan Sonnenbergs
(Registration number
2006/018200/21)
Rothbart Inc
(Registration number
1995/001105/21)
Date: 18/12/2008 11:54:21 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.
