| Tue 23 Dec 2008, 10:25 | | MMG - MICROmega - Acquisition of Ocneblok Properties (Proprietary) Limited |
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MMG
MMG
MMG - MICROmega - Acquisition of Ocneblok Properties (Proprietary) Limited
MICROmega HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
(Share code: MMG ISIN: ZAE000034435)
("MICROmega" or "the group")
ACQUISITION OF OCNEBLOK PROPERTIES (PROPRIETARY) LIMITED ("Ocneblok")
1. INTRODUCTION
MICROmega shareholders are advised that MICROmega has entered into
an agreement with John Newbury Investments (Proprietary) Limited
("Vendor") to acquire 50% of the issued share capital of Ocneblok, with effect
from 1 November 2008, for a total
consideration of R3 673 567 as detailed in paragraph 4 ("the Acquisition")
below.
2. NATURE OF BUSINESS OF OCNEBLOK
Ocneblok is a property investment company with an investment
property consisting of an administration building and various factory buildings
situated on Erf 1599 Alrode, Alberton. The
property comprises a total of 1 240 square metres office space and
12 322 square metres of factory space. The total property size is
just over 2 hectares.
The current tenant is Kolbenco (Pty) Ltd, an entity acquired by
MICROmega effective 1 February 2008.
3. RATIONALE FOR THE ACQUISITION
The current tenant is a MICROmega subsidiary and during the
negotiations for the acquisition of Kolbenco (Pty) Ltd it was
agreed that a potential deal could be done around Ocneblok, the
property holding company as much of the security for the investment
in the property was provided by Kolbenco (Pty) Ltd.
4. TERMS OF THE ACQUISITION
4.1 Acquisition, consideration and settlement terms
The acquisition consideration of R3 673 567 million will be settled
as follows:
4.1.1 First payment
- R868 000 in cash will be paid to the Vendor of Ocneblok
on the closing date of the agreement.
4.1.2 Second payment
- R1 000 000 in cash will be paid to the Vendor of Ocneblok
on 1 February 2009.
4.1.3 Cession of loan
- Kolbenco (Pty) Ltd will cede and assign 50% of the value of
the loan account as at the 1 November 2008, due by Ocneblok
to Kolbenco, to the Vendor. The value of this loan at 31
October was R3 611 134.
5. CONDITIONS PRECEDENT
The implementation of the acquisition is subject to approval by the
board of MICROmega and the JSE Limited. We confirm that all conditions
precedent have been fulfilled.
6. FINANCIAL EFFECTS OF THE ACQUISITION
The table below shows the per share effect of the acquisition of
Ocneblok for the six months ended 30 June 2008. The pro forma
financial effects, which are the responsibility of the directors of
MICROmega, have been prepared for illustrative purposes only and,
because of their nature, may not fairly present MICROmega`s
financial position as at 30 June 2008, or the effect of future
earnings. The financial effects are determined in accordance with
the Listing Requirements of the JSE.
Notes Unaudited Pro forma Change
(%)
At At
30 June 2008 30 June 2008
After
Ocneblok
Acquisition
Earnings per share (cents) 3 37.57 40.57 7.99
Headline earnings per share 4 23.99 23.95 -0.17
(cents)
Net asset value per share (cents) 5 236.54 239.55 1.27
Net tangible asset value per 6 169.71 172.72 1.77
share (cents)
Weighted average number of shares 7 96 184 96 184
Total number of shares in issue 7 96 759 96 759
Notes:
1.The figures in the "Audited" column are extracted from the
published unaudited abridged results of MICROmega for the
six months ended 30 June 2008.
2.The figures in the "After acquisition" column are adjusted
for the inclusion of the financial results as reflected
in the management accounts of Ocneblok for the period
commencing 1 January 2008 and ending 31 October 2008.
3.Earnings per share calculations in the "After acquisition"
column are based on the following assumptions:
-The acquisition was effective 1 January 2008.
-The net loss after tax of Ocneblok for the six months ended
30 June 2008 was (R32 296).
-All fair value adjustments to the property would be done
directly through equity as the property is owner occupied
at a group level.
-The excess of the fair value of the assets of Ocneblok over
the acquisition price would be accounted for as negative
goodwill with immediate effect.
4.Headline earnings per share calculations in the "After
acquisition" column have been based on the following
assumptions:
-All fair value adjustments to the property would be done
directly through equity as the property is owner occupied
at a group level.
-None of the earnings of Ocneblok are to be excluded for
Headline Earnings calculations except for negative
goodwill taken into account on Business Combinations.
5.The increase in net asset value is calculated on the
assumption that Ocneblok had a total net asset value of
R13 173 725 on 30 June 2008 with a minority interest raised
of R6 586 862. A R1 000 000 liability has been raised for
future Vendor payments together with a R868 000 cash
reduction on the settlement date and a reduction in a loan
receivable of R1 805 567.
6.The increase in tangible net asset value is calculated on the
assumption that Ocneblok had a total tangible net asset value
of R13 173 725 on 30 June 2008 with a minority interest
raised of R6 586 862. A R1 000 000 liability
has been raised for future Vendor payments together with a
R868 000 cash reduction on the settlement date and a
reduction in a loan receivable of R1 805 567.
7.The weighted average number of shares and the actual number
of shares in issue have not been changed as securities of the
company do not form part of the purchase consideration.
7. OTHER MATTERS
The articles of Ocneblok will be amended to comply with the JSE`s Listing
Requirements.
8. RELATED PARTY TRANSACTION
Shareholders are advised that John Newbury Investments is wholly
owned by John Newbury, a non-executive director of MICROmega, and
as such this is a related party transaction in terms of the JSE
Limited Listing Requirements.
This transaction is classified as a small related party
transaction and thus the provisions of 10.4 do not apply.
Paragraph 10.7 (b) has been complied with, the transaction has been
declared to be fair, and the fairness opinion will lie for
inspection at MICROmega`s registered office for a period of 28 days
from the date of announcement.
Sandton, South Africa
23 December 2008
Sponsor: Investec Bank Limited
Date: 23/12/2008 10:25:26 Produced by the JSE SENS Department.
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