| Wed 25 Feb 2009, 8:00 | | LMID - Lereko Mobility - Condensed unaudited results for the six months ended |
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JSE SIM
LMID
LMID - Lereko Mobility - Condensed unaudited results for the six months ended
31 December 2008
Lereko Mobility (Proprietary) Limited
Incorporated in the Republic of South Africa
Registration number: 2004/034154/07
Share code: LMID
ISIN: ZAE0000067229
("Lereko Mobility")
Condensed unaudited results for the six months ended 31 December 2008
www.lereko.co.za
Condensed balance sheet at 31 December 2008
R000 31 Dec 2008 31 Dec 2007 30 Jun 2008
Assets
Non-current asset
Investments 985,823 1,515,244 947,935
Current assets 12,793 9,972 11,623
Cash and cash equivalents 12,793 9,932 11,550
Current account with - 40 -
shareholder
Taxation in advance - - 73
Total assets 998,617 1,525,216 959,558
Equity and liabilities
Net deficit (809,848) (148,052) (769,097)
Share capital and premium 2,040 2,040 2,040
Non-distributable reserves (83,164) 125,860 (83,164)
Distributable reserve (728,724) (275,952) (687,973)
Non-current liabilities 1,784,120 1,619,495 1,715,274
Interest bearing 811,890 763,534 813,391
borrowings
Call option liability 906,662 688,948 854,172
Embedded derivative 16,838 45,407 4,285
financial liability
Deferred taxation 48,731 121,606 43,426
Current liabilities 24,345 53,773 13,381
Current portion of 23,836 53,773 13,352
interest bearing
borrowings
Taxation 108 - -
Trade and other payables 401 - 29
Total equity and 998,617 1,525,216 959,558
liabilities
Condensed income statement for the six months ended 31 December 2008
R000 31 Dec 2008 31 Dec 2007 30 Jun 2008
Dividends received 38,832 - -
Operating expenses (181) (55) (871)
Net fair value adjustments (27,154) (448,427) (857,955)
Net financing costs (46,585) (45,212) (91,042)
Loss before taxation (35,088) (493,694) (949,868)
Taxation 5,663 (72,428) (116,581)
Loss after taxation (40,751) (421,266) (833,287)
Condensed cash flow statement for the six months ended 31 December
2008
R000 31 Dec 2008 31 Dec 2007 30 Jun 2008
Cash flows from operating (46,188) (45,367) (83,630)
activities
Cash (utilised) generated 575 (80) 7,560
in operating activities
Net financing cost (46,585) (45,212) (91,042)
Tax paid (178) (75) (148)
Cash flows from investing 38,832 39,177 78,049
activities
Dividends received 38,832 - -
Capital distribution - 38,832 77,664
Current account with - 345 385
shareholder
Cash flows from financing 8,599 8,625 9,634
activities
Loans (repaid) raised 8,599 8,625 9,634
Increase in cash and cash 1,243 2,435 4,053
equivalents
Cash and cash equivalents 11,550 7,497 7,497
at beginning of the year
Cash and cash equivalents 12,793 9,932 11,550
at end of the year
Condensed statement of changes in equity for the six months ended
31 December 2008
R000 Issued Non- Distri- Total
capital distri- butable
butable reserve
Balance as at 25 June 2,040 125,860 120,057 247,957
2006
Profit for the period 25,257 25,257
Balance as at 25 June 2,040 125,860 145,314 273,214
2007
Fair value adjustment (243,051) (243,051)
on preferred ordinary
shares
Deferred tax on fair 34,027 34,027
value adjustment
Net loss recognised (209,024) (209,024)
directly in equity
Net loss for the (833,287) (833,287)
period
Balance as at 30 June 2,040 (83,164) (687,973) (769,097)
2008
Loss for the six (40,751) (40,751)
months
Balance as at 31 2,040 (83,164) (728,724) (809,848)
December 2008
Background to Lereko Mobility
In June 2005 Lereko Mobility (Proprietary) Limited ("the company") concluded a
black economic empowerment transaction with Imperial Holdings Limited
("Imperial").
In terms of this transaction the company acquired 14 516 617 preferred ordinary
shares from Imperial which are unlisted and will pay a fixed annual dividend of
535 cents per share for the five years up to and including 30 September 2010.
Thereafter they will be converted into ordinary shares and will be listed on JSE
Limited ("JSE") ranking pari passu with Imperial`s other ordinary shares.
In May 2008 Imperial unbundled its Leasing and Capital Equipment division to its
shareholders giving rise to Eqstra Holdings Ltd ("Eqstra"). The company
subscribed for 14 516 617 deferred ordinary shares of 0.1 cent each in Eqstra
which will also be converted into ordinary shares and will be listed on JSE
ranking pari passu with Eqstra`s other ordinary shares.
To fund the acquisition of the original allocation of Imperial shares the
company raised senior funding by issuing to financial institutions preference
shares for R377 million and 14 533 096 debentures for R458 million. The
debentures are unsecured, subordinated to the claims of the preference shares
and listed on the JSE under the Asset-backed Securities: Other Securities sub-
sector.
The debenture holders are entitled to a coupon of 5% per annum. The debentures
will be redeemed on 1 October 2010 at R41.50 per debenture plus an equity linked
bonus being 25% of the extent to which Imperial`s share price exceeds R111.55
and Eqstra`s share price exceeds R33.70 on that date.
Imperial facilitated the transaction with vendor finance by issuing preferred
ordinary shares at their par value of 4 cents, which discount had a value of
R600 million. This will entitle Imperial to a call option from the company for
sufficient of Imperial`s ordinary shares to be delivered on 15 June 2015 to
settle this amount plus a return which will amount to a minimum of R1 524
million. With the unbundling referred to above, Eqstra will be entitled to a
call option from the company for sufficient of Eqstra`s ordinary shares to be
delivered on 15 June 2015 to settle its call option which will amount to a
minimum of R420 million.
These call options are subordinated to the claims of both the preference share
and debenture funding.
During the period under review, Imperial Group (Pty) Ltd and Eqstra Corporation
(Pty) Ltd subsidiaries of Imperial Holdings Limited and Eqstra Holdings Limited
respectively, issued guarantees jointly (but not severally) for a total amount
of R100 million. This counts as additional acceptable collateral (in the
proportions of R78 400 000 by the Imperial subsidiary and
R21 600 000 by the Eqstra subsidiary) in favour of the debenture holders and
preference shareholders of Lereko. These guarantees expire in September 2010
upon full settlement of the debenture holders and preference shareholders.
The effect of the additional acceptable collateral is to reduce the minimum
combined Imperial and Eqstra share prices in respect of the minimum share cover
ratio of the preference share debt and debenture debt.
In exchange for the provision of this additional acceptable collateral, Lereko
has agreed that Imperial and Eqstra`s call options over their shares may be
brought forward by 1 (one) year to 2014 at the election of Imperial and Eqstra.
Basis of preparation
The preliminary unaudited financial statements have been prepared on the
historical cost basis excluding financial instruments which are fair valued and
conform to International Financial Reporting Standards (IFRS). The accounting
policies are consistent with those applied in the annual financial statements
for the year ended 30 June 2008. These condensed financial statements have been
prepared in terms of IAS 34 - Interim financial reporting.
Results
The company has posted a loss amounting to R41 million. Net fair value
adjustments include an increase in value of the Imperial and a decrease in the
value of the Eqstra shares.
The funding costs payable to the preference shareholders and the debenture
holders are included in net financing costs.
Financing
The interest bearing borrowings are payable to the preference shareholders and
debenture holders.
The call option liability is due to Imperial and Eqstra for the vendor finance.
The equity of the company reflects a deficit of R810 million, however the call
options due to Imperial and Eqstra are both subordinated to the claims of the
preference and debenture holders. The preferred ordinary shares in Imperial and
Eqstra have a combined market value at the reporting date of R986 million.
There have been no facts or circumstances of a material nature that have
occurred between the accounting date and the date of this report.
Interest on debentures
Notice is hereby given that an interest payment of 103.75 cents per debenture is
payable to debenture holders recorded in the registers of the company at the
close of business on Friday, 27 March 2009.
In compliance with the requirements of Strate, the electronic settlement and
custody system used by the JSE Limited, the company has determined the following
salient dates for the payment of the interest:
Last day to trade cum-interest payment Friday, 20 March 2009
Debentures commence trading ex-interest payment Monday, 23 March 2009
Record Date Friday, 27 March 2009
Payment Date Monday, 30 March 2009
Debenture certificates may not be dematerialised / rematerialised between
Monday, 23 March 2009 and Friday, 27 March 2009, both days inclusive.
On Monday, 30 March 2009, the interest payment will be electronically
transferred to the bank accounts of certificated debenture holders that utilise
this facility. In respect of those who do not, cheques dated 30 March 2009 will
be posted on or about that date. Debenture holders who have dematerialised their
shares will have their accounts, held at their CSDP or Broker, credited on
Monday, 30 March 2009.
R A Venter Company Secretary
By order of the Board
25 February 2009 / Bedfordview
Tel: +27 11 268 0755 Fax: +27 11 268 0756
1st Floor, 3 Commerce Square, 39 Rivonia Road, Sandhurst
PO Box 1803, Parklands, 2121
Directors:
M V Moosa, A H Mohamed,
P S Molefe, H R Brody
Date: 25/02/2009 08:00:02 Produced by the JSE SENS Department.
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