| Mon 14 Sep 2009, 11:43 | | COL - Colliers South Africa Holdings - Related Party Disposal |
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COL
COL
COL - Colliers South Africa Holdings - Related Party Disposal
COLLIERS SOUTH AFRICA HOLDINGS LIMITED
(Registration number 1998/012245/06)
(Incorporated in the Republic of South Africa)
("Colliers" or "the company")
JSE Code: COL ISIN Code: ZAE 000099461
RELATED PARTY DISPOSAL BY A WHOLLY OWNED SUBSIDIARY OF COLLIERS SOUTH AFRICA
HOLDINGS LIMITED OF ITS HUMAN RESOURCE AND PAYROLL BUSINESS
1. Introduction
On 9 September 2009 Colliers entered into an agreement to dispose of its
Human Resource ("HR") and Payroll businesses, which provide recruitment,
labour broking, HR, and Payroll, outsource solutions, with effect from 1
September 2009. ("the disposal") for a consideration of R 8 500 000.
The disposal to management constitutes a related party transaction in
terms of the JSE Listings Requirements and accordingly requires the
approval of the shareholders of Colliers in a general meeting.
A circular containing details of the disposal and a notice convening a
general meeting of shareholders of the company and incorporating the
special and ordinary resolutions required for implementation of the
disposal will be sent to shareholders in due course
2. Conditions precedent
The conditions precedent to which the disposal is subject are
2.1 approval of the disposal and the resolutions required for its
implementation by the shareholders of the company in general
meeting;
2.2 registration by CIPRO to the extent necessary of the resolutions
approved by the shareholders of the company; and
2.3 JSE and other regulatory approvals
3. Assets disposed of and profits attributable there to
The combined net asset value of the disposal amounts to approximately
R6,7 million which equals 5% of the consolidated net assets of Colliers
at 28 February 2009
The combined after tax profits of the disposal amounts to approximately
R1,4 million which is 8.4% of the consolidated earnings of Colliers for
the year ended 28 February 2009
4. Terms of the disposal
The disposal consideration will be paid as follows:
4.1 R4 250 000 (interest free) in cash over a period of 6 months with
the first payment being made on 30 September 2009; and
4.2 R4 250 000 (together with interest at a rate equal to the ruling
yield on the R153 (less 2%) at the date of payment) over a period of
60 months commencing on 31 March 2010
5. Rationale for the disposal
The Board is of the opinion that the disposal is positive and necessary
for the group in that:
5.1 the Human Resource and Payroll businesses are unrelated to the other
operations of Colliers and are not seen to be core to the business
of Colliers.
5.2 Colliers, after the disposal will be focussed on its core business
as a property company;
5.3 the company`s capital management will be enhanced; and
5.4 the company will be appropriately valued by the market as a property
company.
6. Pro forma financial effects of the disposal
The table below sets out the unaudited pro forma financial effects of the
disposal on the earnings, headline earnings, net asset value and net
tangible asset value per share of Colliers based on the published audited
results of the company for the financial year ended on 28 February 2009.
The unaudited pro forma financial effects, which are the responsibility
of the directors of the company, are prepared for illustrative purposes
only and, because of their nature, may not fairly present the financial
position of the company, changes in its equity or the results of its
operations or cash flows after the disposal.
Before the After the Percentage
disposal disposal change
(cents) (cents) (increase/
(decrease))
Earnings per 30,0 28,6 (4.6)
share
Headline earnings (12,9) (15.9) (23.3)
per share
Tangible net 238,7 240,5 0.7
asset value per
share
Net asset value 240,2 240,8 0.2
per share
Number of shares
in issue 55914802
Notes:
1. It has been assumed for the purpose of the unaudited pro forma
financial effects that the disposal took place on 1 March 2008 for
income statements purposes and on 28 February 2009 for balance sheet
purpose.
2. Proceeds in the form of the up front payment were applied to reduce
bank borrowings
3. Costs of the transaction of R0.6 million have been taken into
account
4. Interest saving on cash receipts have been taken at 15.1% being the
average rate for the year ended 28 February 2009 payable on
overdraft.
5. Notional taxation of 28% has been assumed in respect of revenue and
expenditure items and 14% in respect of capital gains items
7. Shareholder approval
The disposal requires the approval of Colliers shareholders in general
meeting. A circular, containing full details of the disposal and
incorporating a notice of general meeting, will be posted to shareholders
within approximately 28 days of this announcement.
The directors of Colliers have obtained a fairness opinion from an
independent professional advisor in respect of the related party
transaction
8. Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement dated 21 August
2009, and are advised that the negotiations regarding the disposal are
now complete and caution is no longer required to be exercised by
shareholders when dealing in their securities.
14 September 2009
Sponsor
Arcay Moela Sponsors
Date: 14/09/2009 11:43:01 Produced by the JSE SENS Department.
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