| Wed 13 May 2009, 17:28 | | BRT / BRN - Brimstone Investment Corporation Limited - Notice of General Meeting |
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BRT BRN
BRT
BRT / BRN - Brimstone Investment Corporation Limited - Notice of General Meeting
Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/010442/06
Share Code: BRT & ISIN: ZAE000015277
Share Code: BRN & ISIN: ZAE000015285
("Brimstone")
NOTICE OF GENERAL MEETING
1. Introduction
Brimstone shareholders are referred to the announcements dated 31 October
2008 and 26 November 2008 detailing the proposed acquisition of 73.16% of
the Sea Harvest Corporation Limited ("Sea Harvest") ordinary shares in
issue by a Brimstone led consortium (the "Consortium") from Tiger Brands
Limited ("Tiger Brands") (the "Tiger Brands Acquisition"). The Consortium
consists of Brimstone, Kagiso Ventures (Proprietary) Limited, certain Sea
Harvest staff members reinvesting through a trust and current senior Sea
Harvest management personnel also investing through a trust.
Pursuant to the two announcements mentioned above, a binding legal
agreement has been entered into between Brimstone, Brimstone`s wholly-owned
subsidiary Brimco (Proprietary) Limited, Business Venture Investments No
1311 (Proprietary) Limited ("Holdco"), which is the entity representing the
Consortium`s interests and Tiger Brands, in respect of the Tiger Brands
Acquisition. Further binding legal agreements have been entered into
between Holdco and the remaining Sea Harvest shareholders in terms whereof
Holdco has acquired, or will acquire by the date on which the Tiger Brands
Acquisition is implemented, their shareholding in Sea Harvest (collectively
"the Transaction"). As Tiger Brands was only amenable to a sale of shares,
the Sea Harvest operations will be restructured following the Tiger Brands
Acquisition (the "Restructure"). The Restructure will also establish an
efficient ownership structure of the Sea Harvest operating business in
terms of legal, ownership and financing considerations.
Brimstone`s final shareholding in Holdco has now been finalised at 56.94%
and the final pro forma financial effects of the Transaction on Brimstone
are shown in paragraph 3 below.
2. Conditions precedent to the Transaction
At the date of this announcement the following conditions precedent
relating to the Tiger Brands Acquisition are the only conditions precedent
outstanding:
- approval of the Transaction by the shareholders of Brimstone in
general meeting. Irrevocable letters of undertaking from certain
Brimstone key management shareholders holding approximately 29% of the
voting rights in Brimstone, undertaking to vote in favour of the
Transaction, have been obtained;
- written confirmation that Holdco has sufficient funding available to
pay the purchase consideration to Tiger Brands (Holdco has entered
into binding, albeit conditional, funding agreements with Investec
Bank Limited, and it is intended that such written confirmation will
be provided once the relevant conditions to which such funding
agreements are subject to, have been fulfilled); and
- Tiger Brands and Sea Harvest concluding a separation agreement which
regulates, inter alia, employee benefits and medical aid of employees
of Sea Harvest and the insurance arrangements applicable to Sea
Harvest following the implementation of the Tiger Brands Acquisition.
All other conditions detailed in the previous two announcements, relating
to the Tiger Brands Acquisition have been fulfilled.
3. Pro forma financial effects
Based on Brimstone`s published consolidated audited results for the
financial year ended 31 December 2008, the unaudited pro forma financial
effects of the Transaction on Brimstone`s earnings and headline earnings
per share ("EPS" and "HEPS" respectively) and net asset value and net
tangible asset value per share ("NAV" and NTAV" respectively) are set out
below. The unaudited pro forma financial information has been prepared for
illustrative purposes only and because of its nature may not give a fair
presentation of Brimstone`s financial position and results of operations
after taking into account the effect of the Transaction on Brimstone. The
preparation of the pro forma financial information is the responsibility of
Brimstone`s directors.
Before the After the % change
Transaction Transaction
and and
Restructure Restructure
EPS (loss per share) (46.6) (52.6) (12.9%)
(cents)
HEPS (headline loss per (33.0) (40.7) (23.3%)
share) (cents)
NAV per share (cents) 927.3 916.8 (1.1%)
TNAV per share (cents) 927.3 844.2 (9.0%)
Number of shares in issue 236,302 236,302 -
(`000)
Weighted average number of 236,122 236,122 -
shares in issue (`000)
Notes:
1. The "Before the Transaction and Restructure" financial information has
been extracted, without adjustment, from Brimstone`s published audited
consolidated results for the 12 months ended 31 December 2008.
2. The loss per share and headline loss per share figures as reflected in
the "After the Transaction and Restructure" column are based on the
assumption that the Transaction and the Restructure were implemented
on 1 January 2008 for income statement purposes.
3. The loss per share and headline loss per share were adjusted for the
after tax effect of:
- the elimination of the equity accounted earnings and dividends
received from Sea Harvest for the twelve months ended 31 December
2008;
- the inclusion of the consolidated earnings of Sea Harvest for the
twelve months ended 30 September 2008;
- the payment of Brimstone`s share of the Transaction and the
Restructure costs totalling R10.2 million;
- the raising fee on the bridge funding, the cost of which shall be
borne by the Consortium;
- reduction in interest earned at an average rate of 11.72% per
annum on R15.4 million utilised by Brimstone to fund a portion of
the Transaction and the Restructure and fund the Transaction
costs;
- reduction of interest earned at an average rate of 11.72% on
R168.4 million utilised by Sea Harvest in the Transaction and the
Restructure;
- increased interest paid by R56.1 million on new debt introduced
into Sea Harvest at rates linked to JIBAR. The average effective
interest rate at the end of the period was 19.9%;
- the gain on disposal of investment in associate (Sea Harvest) by
Brimstone amounted to R4.3 million included in exceptional
items; and
- amortisation of quotas amounting to R10.1 million. Quotas are
amortised over a period of 13 years.
4. The NAV per share and TNAV per share figures as reflected in the
"After the Transaction and Restructure" column are based on the
assumption that the Transaction and the Restructure were implemented
on 31 December 2008 for balance sheet purposes.
5. The NAV per share and TNAV per share were adjusted for:
- the escalated purchase consideration of R597 million in respect
of the Sea Harvest stakes;
- the elimination of the investment in associate (Sea Harvest) as
at 31 December 2008 of R26.0 million;
- the creation of intangible assets (which arise on consolidation)
of R154.0 million comprising of fishing quotas and goodwill; and
- the payment of Brimstone`s portion of the Transaction costs of
R10.2 million.
6. The directors of Brimstone have placed a preliminary value of R131.8
million on fishing quotas available to Sea Harvest. This valuation
represents the present value of quota tonnes available at anticipated
realisation prices, net of taxation. The initial accounting for the
acquisition has not been finalised because of uncertainties
surrounding the valuations of assets of Sea Harvest. It is intended,
should the Transaction and Restructure receive all approvals
necessary, to complete the initial accounting during the 2009
financial year.
4. General Meeting
A circular setting out details of the Transaction, and incorporating a
notice convening a general meeting of Brimstone shareholders ("General
Meeting"), to be held at 09h00 on Thursday, 28 May 2009, at The Athenaeum,
No 1 Mariendahl Lane, Boundary Terraces, Newlands, Cape Town, was posted to
Brimstone shareholders today.
5. Salient dates and times of the General Meeting
The dates and times pertaining to the General Meeting are set out below:
2009
Forms of proxy for the General Meeting to Tuesday, 26 May
be received by 10h00 on
General Meeting held at 09h00 on Thursday, 28 May
Results of the General Meeting announced Thursday, 28 May
on SENS on
Results of the General Meeting published Friday, 29 May
in the South African press on
Cape Town
13 May 2009
Investment bank and sponsor
to Brimstone
Nedbank Capital
Legal advisers to Brimstone
Cliffe Dekker Hofmeyr
Date: 13/05/2009 17:28:44 Produced by the JSE SENS Department.
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