| Tue 17 Mar 2009, 7:45 | | HUG - Huge Group - Purchase of single stock futures (ssf`s) and contracts for |
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HUG
HUG
HUG - Huge Group - Purchase of single stock futures ("ssf`s) and contracts for
difference ("cfd`s") in Huge, related specific repurchase of securities and
withdrawal of cautionary announcement
HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
("Huge" or "the company")
PURCHASE OF SINGLE STOCK FUTURES ("SSF`s) AND CONTRACTS FOR DIFFERENCE ("CFD`s")
IN HUGE, RELATED SPECIFIC REPURCHASE OF SECURITIES AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
Pursuant to the announcement to Shareholders dated 16 March 2009 in terms of
which shareholders of Huge were advised of the purchase by the company of
specific securities in the form of SSFs ("the SSF Announcement"), and in order
to incorporate all the transactions undertaken by Huge that have or could result
in the company repurchasing ordinary shares in itself, shareholders are advised
that between 15 July 2008 and 16 October 2008, Huge purchased CFD`s and SSF`s
(including the SSFs referred to in the SSF Announcement, representing 12 309 279
ordinary shares in Huge at an average spot price of 360.34 cents per share. The
purchase of CFD`s and SSF`s was authorised by a resolution of the board of
directors of the company which was passed on 11 June 2008. The future price
approximated the market price of the company`s securities at the date of
entering into the derivative contracts.
Pursuant to a ruling by the JSE Limited ("JSE"), and following representations
by Huge to the contrary, the JSE has held that the purchase of the SSF`s
constituted a repurchase of the company`s shares from a related party as defined
in section 5.69 of the JSE Listings Requirements, and is therefore in
contravention of the JSE`s Listings Requirements. Accordingly, the company has
been advised that a circular to shareholders must now be issued and shareholder
approval for the future specific repurchase of the underlying securities must be
obtained. In addition, the company will request shareholder approval for the
repurchase of the securities held through CFD`s. A circular in this regard is
in the process of being prepared and shall be mailed to shareholders in due
course. The shares will be repurchased from Syfrets Nominees (Proprietary)
Limited, a nominee company of Nedbank Limited.
Between the 28 October 2008 and 6 March 2009, the company has also been involved
in the repurchase of its ordinary shares for cash. On 5 January 2009 the
company published a SENS announcement recording the repurchase of 4 340 046
ordinary shares in the company. Since 2 January 2009 the company has
repurchased an additional 1 307 251 ordinary shares at a total value of R2 112
254.09.
In summary the company has acquired exposure to 17 956 576 ordinary shares at an
average spot price of 289.79 cents per share from 15 Jul 2008 to the date of
this announcement. This represents 16.07% of the total issued share capital.
The CFD`s, SSF`s and cash purchases of ordinary shares were acquired utilizing
internal cash flows of the group. As at the date of this announcement, the
company is exposed to a potential future funding obligation of R4 523 193.15 in
respect of SSF contracts held by it.
The directors of Huge, after considering the effect of the above transaction,
are of the view that the company and the group:
- will be able, in the ordinary course of business, to pays its debts;
_ that the assets will be in excess of the liabilities as measured in
accordance with the accounting policies used in the latest consolidated
annual financial statements; and
- the share capital and reserves will be adequate for ordinary business
purposes; and
- the working capital will be adequate for ordinary business purposes,
for a period of twelve months after the date of this announcement.
The pro forma effects of all the repurchases noted above on earnings per share,
headline earnings per share, net asset value per shares and net tangible asset
value per share is set out below:
Unaudited Pro forma - % change
Interim After
31 August 2008 repurchase
Earnings per share 26.18 31.19 19.14%
Headline earnings per 26.18 31.19 19.14%
share
Net asset value per 261.15 311.14 19.14%
share
Net tangible asset 68.15 81.20 19.15%
value per share
The pro forma financial effects are the responsibility of the directors and are
prepared for illustrative purposes only assuming that the specific repurchase
occurred on 01 March 2008 for income statement purposes and at 31 August 2008
for balance sheet purposes. Accordingly, the pro forma financial effects may
not present the actual effects of the repurchase on the balance sheet, income
statement, cash flow statement and statement of changes in equity of the
Company.
In the event that the shares are repurchased, the shares will be held as
treasury shares by a subsidiary of Huge, limited to a maximum of 10% and will
not be cancelled. The balance above 10% will be cancelled.
With the publication of the pro forma financial effects of the proposed
repurchase of securities above, shareholders are advised that the cautionary
announcement is now withdrawn.
Woodmead
17 March 2009
Designated Advisor
Arcay Moela Sponsors (Pty) Limited
(Registration number 2006/033725/07)
Date: 17/03/2009 07:45:05 Produced by the JSE SENS Department.
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