| Thu 16 Apr 2009, 7:37 | | SJL - S & J - Proposed reverse listing of Galela Telecommunications Assets |
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SJL
SJL
SJL - S & J - Proposed reverse listing of Galela Telecommunications Assets
(IBURST AFRICA AND IBURST SA) into S&J, change in control in S&J,change of name
and further cautionary announcement
S & J LAND HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1988/000139/06)
Share Code: SJL ISIN ZAE000009965
("the Company" or "S&J")
GALELA TELECOMMUNICATION HOLDINGS (PTY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/003313/07)
("Galela")
PROPOSED REVERSE LISTING OF GALELA TELECOMMUNICATIONS ASSETS (iBURST AFRICA AND
iBURST SA) INTO S&J, CHANGE IN CONTROL IN S&J,CHANGE OF NAME AND FURTHER
CAUTIONARY ANNOUNCEMENT
1. Introduction
Galela is proposing to reverse list its assets into S&J by way of a share swop.
Galela Telecommunication Holdings (Proprietary) Limited ("the Seller" or
"Galela") has entered into an agreement with S&J, dated 8th April 2009 in terms
of which S&J will acquire, as one indivisible transaction by way of a share
swop, 857 ordinary shares of R1.00 each in iBurst Africa (Proprietary) Limited
(Registration number 2006/013807/07) ("iBurst Africa"), such shares representing
86% (eighty six percent) of the total issued share capital of iBurst Africa, and
1,000 ordinary shares of R0.12 each in Richtrau No.10 (Proprietary) Limited
(Registration Number 2004/005439/07) ("Richtrau" or "iBurst SA"), (such shares
representing 63.8% (sixty three comma eight percent) of the total issued share
capital of Richtrau (collectively, "Sale Shares" or "the Acquisition" or "Share
Swop" or "Reverse Listing").
Galela is swopping a 28.72% effective interest in iBurst SA (Proprietary)
Limited through the disposal of the Richtrau shares in exchange for a fresh
issue of shares in S&J.
iBurst Africa owns:
- 71% of iBurst Ghana Limited;
- 60% of STE iBurst RDC SPRL;
- 70% of Dr Wireless Limited trading as iBurst Africa, Kenya;
- 80% of iBurst Mocambique Limitada;
- 75% of iBurst Zambia Limited;
- 49% of iBurst Namibia Wire Operations (Proprietary) Limited; and
- 80% of iBurst Uganda Limited.
2. Details Relating to the Seller and the Assets
Galela is the largest operator of iBurst mobile broadband technology globally.
Mr Thami Mtshali is the sole shareholder in Galela through which he holds shares
in iBurst Africa and iBurst SA. Galela has, to date, rolled out the iBurst
protocol in five markets, namely South Africa, Ghana, Mozambique, Democratic
Republic of Congo and Kenya.
Galela is in the process of rolling out in six further markets across the
African continent, where it has already secured licenses.
iBurst provides continued high-speed connectivity for corporate or personal
needs, through broadband Internet and email services. The salient features of
iBurst technology are threefold: first, it offers the speed of DSL in a mobile
environment. Thanks to frequency interference reduction, users obtain stable
speeds that are faster than other mobile Internet offerings. Second, iBurst is
portable and can be used across a wide area with a single base station. It is
distinctive in that its handover capabilities allow users to move freely between
base stations, broadening the range of activity. Third, the iBurst system is
built on an IP base for simplicity, allowing a network to be established quickly
and at relatively low cost.
3. Rationale for the Acquisition
S&J is a listed "cash shell" as defined in the JSE Limited ("JSE") Listings
Requirements. The application of the JSE Listings Requirements requires the
Company to acquire assets suitable for listing. The rationale for the
Acquisition is accordingly to inject S&J with viable assets, which meet the JSE
Listings Requirements` conditions for listing, in order that the current
suspension of the Company`s shares from trading on the JSE may be lifted.
4. Acquisition Consideration
S&J will pay for the Sale Shares by issuing to the Seller fully-paid
renounceable letters of allocation in respect of such number of ordinary shares
in S&J, as will equate to 98%, on a fully diluted basis, of the total issued
ordinary share capital of S&J after the issue of such shares to the Seller or
its renouncee ("Consideration Shares" or "Acquisition Consideration"). The sale
and acquisition of the Sale Shares and the Consideration Shares shall be with
effect from the first business day after the date of fulfilment of the last of
the conditions precedent ("Conditions Precedent") set out in paragraph 8 below
("effective date").
5. Change of Control and Waiver of a Mandatory Offer
The Acquisition is an affected transaction in terms of the Securities Regulation
Code and the Rules of the Securities Regulation Panel ("SRP Code") and as such
is governed by the SRP. The S&J board will accordingly appoint an independent
adviser to opine as to whether the terms and conditions of the Acquisition are
fair in respect of S&J shareholders.
The SRP has advised that it is willing to consider an application to grant
dispensation to the Seller, in terms of the SRP Code, from the obligation to
extend a mandatory offer to S&J shareholders, providing that the S&J
shareholders in general meeting waive their right to require the Seller to
extend a mandatory offer in terms of Rule 8.7 of the SRP Code, and subject to
the SRP considering any representations (if any) made by the S&J shareholders.
Details of where and when such representations should be made will be contained
in the circular to be posted to S&J shareholders referred to in paragraph 12
below.
6. Reconstitution of the Board
It is proposed that, consequent to the change of control and nature of business
of the Company following the successful implementation of the Acquisition, the
existing board will resign and, subject to S&J shareholder approval, will be
reconstituted.
7. Irrevocable Undertakings
S&J shareholders holding 3 172 561 ordinary S&J shares (representing 51% of the
Company`s current issued share capital, excluding treasury shares and those held
in any share trust) have irrevocably undertaken to support the Acquisition.
8. Conditions Precedent
The Acquisition is subject to the fulfillment or waiver of the following
conditions precedent by the dates specified (which date may be extended by
written agreement between the Seller and the Company):
8.1 by 9 April 2009, S&J shareholders holding at least 51% (fifty one percent)
of the total issued ordinary shares, on a fully diluted basis, in S&J, sign
and deliver to the Seller an irrevocable undertaking in the form of
Annexure 1 to the acquisition agreement (this condition has been met as set
out in paragraph 7 above);
8.2 by 31 May 2009, the Seller shall have conducted a due diligence
investigation of S&J and its business and affairs to its satisfaction;
8.3 a written ruling being obtained from the SRP, waiving the requirement that
a mandatory offer be made to S&J shareholders, providing that a simple
majority of independent shareholders of S&J agree to the waiver of this
requirement for a mandatory offer in terms of Rule 8.7 of the SRP Code;
8.4 the following resolutions being duly passed by the S&J shareholders, and in
the case of special resolutions, being registered by the CIPRO -
8.4.1 adopting the necessary special and ordinary resolutions amending the
authorised and issued share capital of S&J, and where and to the
extent necessary approving the creation and issue of the Consideration
Shares and amending the memorandum and articles of association of S&J;
8.4.2 the S&J shareholders adopting the necessary special and ordinary
resolutions in terms of the JSE Listings Requirements and the
Companies Act, 1973, as amended ("Companies Act") approving the
acquisition of the Sale Shares and the implementation of the
Acquisition;
8.4.3 an ordinary resolution in terms of section 221 of the Companies Act,
placing the authorised but unissued ordinary share capital of S&J
under the control of the Company`s directors;
8.4.4 a resolution authorising specific and general issues of shares for
cash as required in terms of the JSE Listings Requirements;
8.4.5 a majority of the S&J shareholders as required by the SRP Code
waiving the requirement to extend a mandatory offer to minority
shareholders as contemplated in Rule 8.7 of the SRP Code;
8.5 the JSE allowing the listing of S&J to continue for the time being, until
the JSE has considered the suitability of the assets of iBurst Africa and
iBurst SA for listings purposes;
8.6 the Seller passing and registering a special resolution in terms of Section
228 of the Companies Act, authorising the disposal of the Sale Shares;
8.7 an independent advisor acceptable to the JSE and the SRP issuing an opinion
that the Acquisition is fair to S&J shareholders; and
8.8 the JSE approving the issue and listing of the Consideration Shares and
granting such other approvals in relation to the Consideration Shares and
the Acquisition, as may be required.
9. Offer for Subscription and Shareholder Spread
In order to promote liquidity and to comply with the JSE Listings Requirements
pertaining to shareholder spread, it is anticipated that investors will
subscribe for new ordinary shares in the Company ("the Placing"). Details of the
Placing will be announced in due course.
10. Change of Name
In order to better reflect the changed nature and profile of the Company`s
business and corporate identity following the implementation of the Acquisition,
it is proposed that, subject to S&J shareholder approval, the Company changes
its name to Galela Telecommunications Limited or iBurst Africa Limited, or such
other name as CIPRO may approve.
11. JSE Requirements
The Acquisition is a Category 1 transaction and a reverse take-over for S&J in
terms of paragraph 9.5 (c) of the JSE Listings Requirements, and the requisite
circular, incorporating revised listings particulars, will be posted to S&J
shareholders in accordance with the timing requirements of the JSE. Shareholders
are cautioned that, in accordance with paragraph 9.24 of the JSE Listings
Requirements, the Company is required to satisfy the JSE that it will qualify
for listing following completion of the Acquisition.
12. Further Announcement and Documentation
Further to the above:
- An announcement setting out the Placing details, the salient dates and
times pertaining to the Acquisition and the pro forma financial effects of
the Acquisition on S&J shareholders will be made in due course; and
- A circular incorporating revised listing particulars and containing
information as required in terms of the JSE Listings Requirements and the
SRP Code, together with a notice convening a general meeting of S&J
shareholders to consider and, if deemed fit, approve the Acquisition, will
be posted to S&J shareholders in accordance with the timing requirements of
the JSE and the SRP.
13. Termination of S&J`s listing on the JSE on 20 April 2009 and further
cautionary announcement
It was announced on SENS on 3 April 2009 that the listing of S&J will be
terminated on 20 April 2009 ("the Termination"). S&J have now requested the JSE
to postpone the Termination of the listing of S&J until such time as the JSE has
had the opportunity to consider the suitability for listings purposes ("the
Application") of the iBurst Africa and iBurst SA assets ("Galela Assets"). A
reverse listing is regarded as a new listing in terms of the JSE Listings
Requirements.
The proposed reverse listing of the Galela assets will constitute a new listing
and all the shares in the newly listed entity will be listed under the new name
from a listing date approved by the JSE. The JSE is considering the Application
and shareholders should exercise caution until a further announcement is made.
Sandton
16 April 2009
Sponsor: QuestCo Sponsor (Pty) Ltd
Reporting accountants: Ernst & Young Inc
Attorneys: PJ van Zyl & Co
Date: 16/04/2009 07:37:01 Produced by the JSE SENS Department.
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