| Mon 14 Dec 2009, 8:00 | | ALT - Altech - Announcement Regarding A Black Economic Empowerment Transaction |
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ALT
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ALT - Altech - Announcement Regarding A Black Economic Empowerment Transaction
In Respect Of The Altech Netstar Businesses
ALLIED TECHNOLOGIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/020415/06)
Share code: ALT & ISIN: ZAE000015251
("Altech")
ANNOUNCEMENT REGARDING A BLACK ECONOMIC EMPOWERMENT TRANSACTION IN RESPECT OF
THE ALTECH NETSTAR BUSINESSES
1. INTRODUCTION
Altech is pleased to announce a 25% + 1 share Black Economic Empowerment
("BEE") transaction (the "Transaction") in relation to its wholly owned
subsidiaries, Altech Netstar (Proprietary) Limited ("Altech Netstar"),
Comtech (Proprietary) Limited ("Comtech") and Altech Netstar Fleet
Solutions (Proprietary) Limited ("Fleet Solutions") (collectively the
"Netstar Businesses").
Altech Netstar`s primary business focus is providing stolen vehicle
tracking and recovery services to subscribers within Southern Africa,
while Comtech and Fleet Solutions provide fleet management solutions to
subscribers within the same region.
2. RATIONALE FOR THE TRANSACTION
Transformation is a key focus area for Altech and Altech participates in
opportunities which facilitate meaningful and sustainable growth for the
business of Altech as well as for individuals in South Africa. In
addition, Altech is committed to complying with the ownership
requirements of the Department of Trade and Industry BEE Codes of Good
Practice (the "Codes") and its transformation vision focuses on
empowerment through skills enhancement and widespread development of
disadvantaged communities by focusing on areas with maximum long-term
benefit.
In this context, Altech has entered into the Transaction with Thebe
Investment Corporation (Proprietary) Limited ("Thebe") and Identity
Capital Partners (Proprietary) Limited ("Identity Partners"),
(collectively, "BEE Partners").
Thebe is a diversified, black investment management company with 17 years
experience and has an established history of adding value to its
underlying investments whilst promoting the social and economic
development of black people and black women.
Identity Partners is a women owned and run investment firm, which also
provides advisory services and manages an SME development fund focussing
on black women and youth.
Altech believes that the Transaction will result in a long-term
sustainable relationship with the BEE Partners and a platform from which
both parties can participate in and benefit from the Netstar Businesses.
3. DETAILS OF THE TRANSACTION
In order to facilitate the Transaction, Altech will create a new wholly
owned subsidiary ("Newco"). Altech will dispose of its shares in Altech
Netstar at fair market value (approximately R1.5 billion) to Newco and
the consideration thereof will be settled by Newco issuing preference
shares to Altech. Altech Netstar will acquire the business operations of
Comtech and Fleet Solutions out of the respective companies at fair
market value (approximately R0.2 billion) and the consideration thereof
will be settled via inter-company loans (collectively the
"Restructurings"). Accordingly Newco will have a net asset value of nil
at inception.
Post the completion of the Restructurings Altech will dispose of 25% plus
1 share in Newco to the BEE Partners for a nominal value.
The agreements governing the Transaction include limited warranties and
terms and conditions that are customary to transactions of this nature.
The effective date of the Transaction will be the first day of the month
following the month in which the last conditions precedent in terms of
the agreements are fulfilled.
4. CONDITIONS PRECEDENT
The Transaction is subject to the conclusion and implementation of the
Restructurings.
5. PRO FORMA FINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects of the
Transaction on Altech`s earnings per share ("EPS"), headline earnings per
share ("HEPS") and adjusted headline earnings per share ("Adjusted HEPS")
based on the six months ended 31 August 2009. The unaudited pro forma
financial effects of the Transaction on Altech`s net asset value per
share and net tangible asset value per share are not significant (less
than 3%) and as a result have not been disclosed.
The unaudited pro forma financial effects of the Transaction for the year
ended 28 February 2009 has been presented purely for illustrative
purposes, in order to demonstrate the impact of the Transaction on Altech
for a full year, and because of their nature, may not give a true
reflection of Altech`s financial position, changes in equity, results in
operations or cash flows. The unaudited pro forma financial effects of
the Transaction for the six months ended 31 August 2009 are distorted due
to the share-based payment charge (refer to note 7 below) being
recognised immediately at implementation of the Transaction.
For the six months ended 31 For the year ended 28
August 20091 February 20092
Before After Percentag Befo After Percentage
the the e Change re the Change
Transact Transact the Transac
ion ion3 Tran tion4
(cents) (cents) sact (cents)
ion
(cen
ts)
EPS 294 284 -3.4% 569 559 -1.8%
HEPS 292 282 -3.4% 571 561 -1.8%
Adjusted 304 304 -0.1% 592 591 -0.2%
HEPS
Notes:
1. Extracted from the published unaudited financial results of Altech
for the six months ended 31 August 2009.
2. Extracted from the published audited financial results of Altech for
the year ended 28 February 2009.
3. For purposes of calculating the EPS, HEPS and Adjusted HEPS it was
assumed that the Transaction was effective on 1 March 2009. The
weighted average number of shares in issue of 96.72 million as at 31
August 2009 was used in the calculation of the EPS, HEPS and
Adjusted HEPS.
4. For purposes of calculating the EPS, HEPS and Adjusted HEPS it was
assumed that the Transaction was effective on 1 March 2008. The
weighted average number of shares in issue of 96.53 million as at 28
February 2009 was used in the calculation of the EPS, HEPS and
Adjusted HEPS.
5. Transaction costs of a non-occurring nature amounting to R2.1
million (net of taxation) relating to the Transaction have been
included in the determination of the calculation of the EPS and
HEPS.
6. Earnings have been reduced by R0.43 million and R0.86million for the
six months ended 31 August 2009 and for the year ended 28 February
2009, respectively for additional recurring expenses that will be
incurred as a result of the Transaction.
7. In accordance with IFRS 2 "Share-based Payment", earnings for the
six months ended 31 August 2009 and for the year ended 28 February
2009 have been reduced by R6.5 million, representing the full share-
based payment charge which is recognised on the implementation of
the Transaction.
8. Expenses of a non-recurring nature, namely the IFRS 2 charge and
transaction costs have not been included in the calculation of the
Adjusted HEPS.
6. CATEGORISATION
The Transaction has been classified as a category 2 transaction in terms
of section 9 of the JSE Limited Listings Requirements. Accordingly,
Altech shareholder approval is not required.
Johannesburg
14 December 2009
Investment Bank and Legal Advisor to Altech
Sponsor HR Levin Attorneys,
Investec Bank Limited Notaries & Conveyancers
(Registration number (Practice number M2841)
1969/004763/06)
Independent Reporting Legal Advisor to BEE
Accountants and Auditors Partners
to Altech
PKF (Jhb) Inc. Webber Wentzel
BEE Partners
Thebe Investment
Corporation (Pty) Ltd
Identity Capital Partners
(Pty) Ltd
Date: 14/12/2009 08:00:05 Produced by the JSE SENS Department.
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