| Wed 4 Mar 2009, 12:38 | | VUN - Vunani - Subscription for 40% of the issued share capital of |
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VUN
VUN
VUN - Vunani - Subscription for 40% of the issued share capital of
civils 2000 Holdings (Proprietary) Limited ("Holdco")
VUNANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
JSE code: VUN ISIN: ZAE000110359
("Vunani")
SUBSCRIPTION FOR 40% OF THE ISSUED SHARE CAPITAL OF CIVILS 2000
HOLDINGS (PROPRIETARY) LIMITED ("HOLDCO")
1. INTRODUCTION
Shareholders are advised that a Subscription and Shareholders`
Agreement ("the agreement") has been entered into between CS
Shapiro ("Shapiro"), RL Starke ("Starke"), DJ van der Merwe ("van
der Merwe")("the existing shareholders of the Civils group of
companies", which group of companies is detailed in paragraph 2
below), Pahana Investments 93 (Proprietary) Limited ("Pahana" or
the "SPV") and Holdco, in terms of which the SPV will subscribe
for 40% of the issued share capital of Holdco, the newly formed
holding company of the Civils group of companies ("Civils") on the
terms and conditions set out below ("the transaction"). Pahana is
a special purpose vehicle jointly owned by Vunani Capital
(Proprietary) Limited ("Vunani Capital"), which is a wholly-owned
subsidiary of Vunani, and Absa Capital Infrastructure Equity
Investments, a division of Absa Bank Limited ("Absa"). Vunani
Capital and Absa hold a 51%/49% interest in Pahana. Vunani will
then effectively hold 20.4% in Holdco.
The SPV is a newly formed company incorporated for the sole
purpose of subscribing for the shares in Holdco.
2. BACKGROUND INFORMATION
Vunani is a majority black-owned and managed diversified financial
services group.
Civils was founded by Shapiro and Starke and began operations in
1992. Since then it has secured a strong position in the civil
engineering and construction industries in the western, eastern
and southern Cape. Its clients include the public sector
(provincial and local Government) as well as the private sector.
Civils comprises the following four operating companies:
Company and Operations
Holdco
shareholding
- Civils 2000 Concrete and civils contractor,
(Proprietary) focused mainly on the western
Limited (70%) Cape market;
- Civils (Southern Concrete and civils contractor,
Cape) 2000 focused mainly on the southern
(Proprietary) Cape market;
Limited (100%)
- Civils 2000 Plant Owns the plant and equipment
Hire utilised by the Civils group of
(Proprietary) companies and hires out same; and
Limited (100%)
- Road Smart Specialist road works and asphalt
Asphalting surfacing contractor.
(Proprietary)
Limited (60.6%)
3. RATIONALE FOR THE TRANSACTION
The transaction complements Vunani`s other investments in the
construction industry. Vunani expects to work with the management
of Civils to identify new project opportunities outside of its
current geographical focus.
Civils currently holds a category 8CE Construction Industry
Development Board certificate. By utilising the funds received
from the transaction, it is expected that Civils will be able to
upgrade to a category 9CE certificate which will enable it to
tender for larger public sector work and thereby increase revenue
and margins.
4. SUBSCRIPTION
The SPV will subscribe for a total of 400 000 A shares with a par
value of one cent each in the share capital of Holdco ("the
subscription"), being 40% of the issued share capital of Holdco
("the consideration shares").
Simultaneously with the subscription, Absa shall loan an amount of
R25 million to Holdco through the SPV, which R25 million will be
fully funded by Absa and discharged against the issue and
allotment of the consideration shares.
5. EFFECTIVE DATE
The transaction will become effective on the successful fulfilment
of the conditions precedent set out in paragraph 6 below.
6. CONDITIONS PRECEDENT
The transaction is conditional upon, inter alia, the fulfilment of
the following conditions precedent by no later than 17:00 on 31
May 2009 or such later date as agreed in writing by the SPV:
* the delivery to the SPV of a written waiver signed by RZT
Zelphy 4396 (Proprietary) Limited ("RZT") waiving the pre-
emptive rights which it has to purchase the consideration
shares in Civils 2000 (Proprietary) Limited in terms of an
existing shareholders` agreement between the existing
shareholders of the Civils group of companies and RZT;
* various agreements being signed and becoming unconditional
relating to the restructure of indivisibly-related
transactions in terms of which the individual Civils companies
referred to in paragraph 2 above are acquired by Holdco in
accordance with a share-for-share transaction in terms of
section 42 of the Income Tax Act thereby becoming underlying
subsidiaries of Holdco;
* compliance with any regulatory obligations to the extent
required by law to effect the transaction, including approval
of the Competition Commission and registration with CIPRO of
any special resolutions required relative to the restructure
of Holdco`s share capital;
* Civils delivering to the SPV a Construction Industry
Development Board certificate of contractor registration
certifying that Civils 2000 (Proprietary) Limited has been
registered in category 8CE for civil engineering works, such
certificate having an expiry date not earlier than 31 March
2009; and
* the respective board approvals of all the relevant companies
involved in the transaction, including approval from the
investment committee of Absa.
Warranties as are normal in transactions of this nature have been
provided. Service level and existing restraint agreements have
been concluded between the existing shareholders of the Civils
group of companies and Holdco.
7. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in terms
of the Listings Requirements of the JSE Limited.
8. FINANCIAL EFFECTS OF THE TRANSACTION
The transaction will have no immediate financial effect on
Vunani`s financial position and may, in the future, contribute
dividend income and/or profits in respect of future corporate
actions.
Johannesburg
4 March 2009
Lead Designated Adviser:
Merchantec (Proprietary) Limited
Corporate Adviser and Joint Designated Adviser:
Vunani Corporate Finance
Date: 04/03/2009 12:38:02 Produced by the JSE SENS Department.
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