| Wed 20 Jun 2001, 0:00 | | Cyberhost - Announcement Relating To An Acquisitio |
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CYBERHOST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013649/06)
("Cyberhost" or "the company")
ANNOUNCEMENT RELATING TO AN ACQUISITION, CHANGE OF CONTROL, CONSOLIDATION OF
SHARE CAPITAL AND AN ISSUE OF SHARES FOR CASH
1. INTRODUCTION
Cyberhost has acquired 100% of Ex-teq Realtime Systems (Proprietary)
Limited, which acquisition will result in a change of control of Cyberhost.
The acquisition will be subject to the approval of shareholders in general
meeting and would ordinarily require an offer to be made to the minority
shareholders of Cyberhost.
2. CONSOLIDATION
The directors of the company have resolved, as part of the process of re-
organising and restructuring the affairs of Cyberhost and in anticipation of
the acquisition detailed hereunder, to undertake a consolidation of the
authorised and issued share capital of Cyberhost on a one-for-ten basis.
The effect of the consolidation is set out below:
R'000
Authorised share capital
before consolidation 500 000 000 ordinary shares of 0,1 cent each 500
After consolidation 50 000 000 ordinary shares of 1,0 cent each 500
Issued share capital
before consolidation 83 816 833 ordinary shares of 0,1 cent each 83,81
After consolidation 8 381 683 ordinary shares of 1,0 cent each 83,81
3. ACQUISITION
Cyberhost has acquired 100% of the shares in and claims against Ex-teq
Realtime Systems (Proprietary) Limited ("Ex-teq") and its subsidiaries for a
total purchase consideration of R6 120 000 which is to be settled by the
issue of 24 480 000 ordinary shares (issued after the aforementioned
consolidation) in Cyberhost at an issue price of 25 cents per share.
The acquisition of Ex-teq will result in a change of control of Cyberhost
and will, accordingly, be subject to the approvals of the Securities
Regulation Panel ("SRP"), the JSE Securities Exchange South Africa ("JSE")
and Cyberhost shareholders in general meeting. The vendors of Ex-teq have
stipulated that they are only prepared to accept payment by the issue of
shares in Cyberhost provided the SRP agrees to waive the requirement that an
offer be made to minorities.
The vendors have warranted the earnings of Ex-teq over the 12-month period
from the effective date of 1 July 2001 and have otherwise provided the
warranties usually associated with transactions of this nature.
4. RATIONALE FOR ACQUISITION
It has previously been announced that the reconstituted board of directors
was undertaking a complete re-examination of the affairs of Cyberhost.
Cyberhost has hitherto carried on business as an Internet service provider
delivering web-hosting and connectivity services to its clients. This has
become a highly competitive and overtraded segment of the Internet market.
In order to improve the cross-selling opportunities available to Cyberhost,
the board has resolved to refocus Cyberhost as an application service
provider delivering on-line services and products to its clients.
Ex-teq is a software development and integration company and its acquisition
will allow Cyberhost to expand its activities into the provision of products
and services in areas where there is a greater margin and less competition
and where higher cross-selling ratios can be achieved with clients.
5. CAPITAL RAISING
To assist in providing the working capital which Cyberhost will require to
fund its expanded operations, it is proposed to raise R3,375 million by the
issue of a further 13 500 000 ordinary shares in the company at an issue
price of 25 cents per share. Such capital raising will be dealt with as a
specific issue of shares for cash in accordance with the Listings
Requirements of the JSE.
6. FINANCIAL EFFECTS
The financial effects of the acquisition of Ex-teq on the results of
Cyberhost, following the consolidation detailed above and assuming that the
acquisition of Ex-teq was effected on 31 December 2000, are set out below:
31 December 2000 31 December 2000
Audited Audited
Before(1) After(2) change
R'000 R'000 %
Revenue 1 607 3 582 122,90
Attributable (loss) (8 112) (7 803) 3,81
Headline (loss) (4 672) (4 363) 6,61
Net asset value 1 199,84 11 004,86 817,19
Net tangible asset value 1 002,97 7 295,10 627,35
Headline (loss) per share (cents) (56,96) (9,41) 83,48
Net asset value per share (cents) 14,32 23,74 65,82
Net tangible asset value per
share (cents) 11,97 15,74 31,50
Shares in issue (fully diluted)
(million) (3) 8 382 46 362 -
Notes:
1. The "Before" figures reflect only the operations of Cyberhost and its
subsidiaries for the year ended 31 December 2000 and have been presented on
the basis that the issued share capital of the company had been consolidated
on a one-for-ten basis at 31 December 2000. The headline loss per share has
been calculated using a weighted average number of shares in issue (after
the one-for-ten consolidation) of 8 202 814.
2. The "After" figures provide for the inclusion of the audited financial
results of Ex-teq and its subsidiaries for the year ended 31 December 2000
and have been presented on the basis that the issued share capital of the
company had been consolidated on a one-for-ten basis and that the capital
raising contemplated in paragraph 5 has been successfully undertaken.
3. In the published audited financial results of the company for the period
to 31 December 2000, the number of shares in issue was reflected as 80 200
000. This number was predicated on a number of shares in issue having been
cancelled. The aforegoing cancellation has not been formalised and,
accordingly, the correct number of shares in issue ahead of the
consolidation, acquisition and issue of shares for cash is 83 816 233.
7. RELATED PARTIES
Mark Weetman and Istvan Banhegyi, who were recently appointed as directors
of Cyberhost, are indirect beneficial shareholders of
Ex-teq and are consequently classified as related parties in terms of the
JSE Listings Requirements. Accordingly, neither of them will be entitled to
vote in respect of any resolutions relating to the acquisition. The terms of
the acquisition will also require an independent fair and reasonable report.
8. CONDITIONS
The acquisition is conditional upon:
(a) the completion of a due diligence investigation into the affairs of Ex-
teq to the satisfaction of Cyberhost;
(b) the waiver by the SRP of the requirement that an offer be made to
minorities;
(c) compliance with the Listings Requirements of the JSE.
9. CIRCULAR TO SHAREHOLDERS
The matters referred to above will require the approval of shareholders in
general meeting and, accordingly, a circular containing a pre-listing
statement and notice of general meeting will be forwarded to shareholders
within 28 days of this announcement.
20 June 2001
Financial adviser to Cyberhost
Fusion Capital
(Registration number 1996/012154/07)
Reporting accountants
Fisher Hoffman PKF
