| Wed 26 Aug 2009, 9:48 | | LMID - Lereko Mobility (Proprietary) Limited - Audited financial results |
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JSE SIM
LMID
LMID - Lereko Mobility (Proprietary) Limited - Audited financial results
for the year ended 30 June 2009
Lereko Mobility (Proprietary) Limited
Incorporated in the Republic of South Africa
Registration number: 2004/034154/07
Share code: LMID
ISIN: ZAE0000067229
("Lereko Mobility")
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2009
Background to Lereko Mobility
In June 2005 Lereko Mobility (Proprietary) Limited ("the company")
concluded a black economic empowerment transaction with Imperial Holdings
Limited ("Imperial").
In terms of this transaction the company acquired 14 516 617 preferred
ordinary shares from Imperial which are unlisted and will pay a fixed
annual dividend of 535 cents per share for the five years up to and
including 30 September 2010. Thereafter they will be converted into
ordinary shares and will be listed on JSE Limited ("JSE") ranking pari
passu with Imperial`s other ordinary shares.
In May 2008 Imperial unbundled its Leasing and Capital Equipment division
to its shareholders giving rise to Eqstra Holdings Limited ("Eqstra"). The
company subscribed for 14 516 617 deferred ordinary shares of 0.1 cent
each in Eqstra which will also be converted into ordinary shares and will
be listed on JSE ranking pari passu with Eqstra`s other ordinary shares.
To fund the acquisition of the original allocation of Imperial shares the
company raised senior funding by issuing to financial institutions
preference shares for R377 million and 14 533 096 debentures for R458
million. The debentures are unsecured, subordinated to the claims of the
preference shares and listed on the JSE under the Asset-backed Securities:
Other Securities sub-sector.
The debenture holders are entitled to a coupon of 5% per annum. The
debentures will be redeemed on 1 October 2010 at R41.50 per debenture plus
an equity linked bonus being 25% of the extent to which Imperial`s share
price exceeds R111.55 and Eqstra`s share price exceeds R33.70 on that
date.
Imperial facilitated the transaction with vendor finance by issuing
preferred ordinary shares at their par value of 4 cents, which discount
had a value of R600 million. This will entitle Imperial to a call option
from the company for sufficient of Imperial`s ordinary shares to be
delivered on 15 June 2015 to settle this amount plus a return which will
amount to a minimum of R1 524 million. With the unbundling referred to
above, Eqstra will be entitled to a call option from the company for
sufficient of Eqstra`s ordinary shares to be delivered on 15 June 2015 to
settle its call option which will amount to a minimum of R420 million.
These call options are subordinated to the claims of both the preference
share and debenture funding.
During the period under review, Imperial Group (Pty) Ltd and Eqstra
Corporation (Pty) Ltd subsidiaries of Imperial Holdings Limited and Eqstra
Holdings Limited respectively, issued guarantees jointly (but not
severally) for a total amount of R100 million. This counts as additional
acceptable collateral (in the proportions of R78 400 000 by the Imperial
subsidiary and R21 600 000 by the Eqstra subsidiary) in favour of the
debenture holders and preference shareholders of Lereko. These guarantees
expire in September 2010 upon full settlement of the debenture holders and
preference shareholders.
The effect of the additional acceptable collateral is to reduce the
minimum combined Imperial and Eqstra share prices in respect of the
minimum share cover ratio of the preference share debt and debenture debt.
In exchange for the provision of the additional acceptable collateral,
Lereko has agreed that Imperial and Eqstra`s call options over their
shares may be brought forward by 1 (one) year to 2014 at the election of
Imperial and Eqstra.
Basis of preparation
The audited financial statements have been prepared on the historical cost
basis excluding financial instruments which are fair valued and conform to
International Financial Reporting Standards (IFRS). The accounting
policies are consistent with those applied in the annual financial
statements for the year ended 30 June 2008. These condensed financial
statements have been prepared in terms of IAS 34 - Interim financial
reporting.
The company`s auditors, Deloitte & Touche, have audited the results and
their signed unmodified opinion is available for inspection at the
company`s registered office.
Results
The company has posted a loss amounting to R142 million. Net fair value
adjustments include an increase in value of the Imperial and a decrease in
the value of the Eqstra shares.
The funding costs payable to the preference shareholders and the debenture
holders are included in net financing costs.
The interest bearing borrowings are payable to the preference shareholders
and debenture holders.
The call option liability is due to Imperial and Eqstra for the vendor
finance.
The equity of the company reflects a deficit of R882 million, however the
call options due to Imperial and Eqstra are both subordinated to the
claims of the preference and debenture holders. The preferred ordinary
shares in Imperial and Eqstra have a combined market value at the
reporting date of R937 million.
There have been no facts or circumstances of a material nature that have
occurred between the accounting date and the date of this report.
Interest on Debentures
Notice is hereby given that an interest payment of 103.75 cents per
debenture is payable to debenture holders for the period ending 30
September 2009.
In compliance with the requirements of Strate, the electronic settlement
and custody system used by the JSE Limited, the company has determined the
following salient dates for the payment of the interest:
2009
Last day to trade cum-interest payment Thursday, 17 September
Debentures commence trading ex- Friday, 18 September
interest payment
Record Date Friday, 25 September
Payment Date Monday, 28 September
Debenture certificates may not be dematerialised / rematerialised between
Friday, 18 September 2009 and Friday, 25 September 2009, both days
inclusive.
On Monday, 28 September 2009, the interest payment will be electronically
transferred to the bank accounts of certificated debenture holders that
utilise this facility. In respect of those who do not, cheques dated 28
September 2009 will be posted on or about that date. Debenture holders who
have dematerialised their shares will have their accounts, held at their
CSDP or Broker, credited on Monday, 28 September 2009.
Condensed balance sheet at 30 June 2009
2009 2008
R`000 R`000
Assets
Non-current asset
Investments 936,612 947,935
Current assets 10,448 11,623
Cash and cash equivalents 10,448 11,550
Current account with shareholder - -
Taxation in advance - 73
Total assets 947,060 959,558
Equity and liabilities
Capital and reserves (881,656) (769,097)
Share capital and premium 2,040 2,040
Non-distributable reserves (53,584) (83,164)
Distributable reserve (830,112) (687,973)
Non-current liabilities 1,815,421 1,715,274
Interest bearing borrowings 832,854 813,391
Call option liability 961,468 854,172
Embedded derivative financial liability 3,014 4,285
Deferred taxation 18,085 43,426
Current liabilities 13,295 13,381
Current portion of interest bearing 12,917 13,352
borrowings
Taxation 299 -
Trade and other payables 79 29
Total equity and liabilities 947,060 959,558
Condensed cash flow statement for the year ended 30 June 2009
2009 2008
R`000 R`000
Cash flows from operating activities (20,565) (83,630)
Cash generated by operating activities 75,639 7,560
Net financing cost (94,425) (91,042)
Tax paid (1,779) (148)
Cash flows from investing activities - 78,049
Capital distribution - 77,664
Current account with shareholder - 385
Cash flows from financing activities 19,463 9,634
Loans raised 19,463 9,634
Increase in cash and cash equivalents (1,102) 4,053
Cash and cash equivalents at beginning 11,550 7,497
of the year
Cash and cash equivalents at end of the 10,448 11,550
year
Condensed income statement for the year ended 30 June 2009
2009 2008
R`000 R`000
Dividends received 77,664 -
Operating expenses (1,641) (871)
Net fair value adjustments (151,743) (857,955)
Net financing costs (94,425) (91,042)
Loss before taxation (170,145) (949,868)
Taxation (28,006) (116,581)
Loss after taxation (142,139) (833,287)
Condensed statement of changes in equity for the year ended 30 June
2009
Issued Non- Distri- Total
capital distri- butable
butable reserve
reserves
Balance as at 25 June 2,040 125,860 145,314 273,214
2007
Fair value adjustment on (243,051)
preferred ordinary shares (243,051)
Deferred tax on fair 34,027 34,027
value adjustment
Net loss recognised (209,024)
directly in equity (209,024)
Net loss for the period
(833,287) (833,287)
Balance as at 30 June 2,040 (83,164)
2008 (687,973) (769,097)
Fair value adjustment on 34,395 34,395
preferred ordinary shares
Deferred tax on fair (4,815) (4,815)
value adjustment
Net profit recognised 29,580 29,580
directly in equity
Loss for the period
(142,139) (142,139)
Balance as at 30 June 2,040 (53,584)
2009 (830,112) (881,656)
Company Secretary
RA Venter
By order of the Board
26 August 2009
BEDFORDVIEW
Date: 26/08/2009 09:48:01 Produced by the JSE SENS Department.
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