| Fri 12 Feb 2010, 16:41 | | TMT - Trematon Capital Investments - Financial effects for the disposal |
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TMT
TMT
TMT - Trematon Capital Investments - Financial effects for the disposal
by Trematon of its 20.8% equity interest in Ingenuity Property
Investments Limited ,withdrawal of cautionary announcement
Trematon Capital Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1997/008691/06
Share code: TMT
ISIN: ZAE000013991
("Trematon" or "the Company")
-FINANCIAL EFFECTS FOR THE DISPOSAL BY TREMATON OF ITS 20.8% EQUITY
INTEREST IN INGENUITY PROPERTY INVESTMENTS LIMITED
-WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction and terms
Shareholders are referred to an announcement released on SENS on 31
December 2009 and published in the press on 4 January 2010 wherein it was
announced that Trematon, through its wholly-owned subsidiaries Tremgrowth
(Proprietary) Limited and Tremtrade (Proprietary) Limited, had entered
into sale of shares agreements dated 30 December 2009 in terms of which
Trematon will dispose of 137 million ordinary shares in Ingenuity
Property Investments Limited ("Ingenuity"), constituting 20.8% of the
issued ordinary share capital of Ingenuity, for a consideration of R68,5
million to Jacana Assets Limited and Mr L I Frenkel("the disposal").
2. Financial effects
The unaudited pro forma financial effects of the disposal which are based
on the published audited group results of Trematon for the year ended 31
August 2009 are set out below.
The unaudited pro forma financial effects have been prepared for
illustrative purposes only to provide information on how the disposal may
have impacted on the results, financial position and the changes in
equity of Trematon. Preparation of the unaudited pro forma financial
effects is the responsibility of the directors. Because of their nature,
the unaudited pro forma financial effects may not fairly present
Trematon`s results, financial position and the changes in equity after
the disposal:
Before the Adjustments - After disposal Total
disposal DisposalCents adjustmentsCen percentage
ts change%
Loss per share (1.3) (3.5) (4.8) 269.2
(cents per
share)
Headline 4.5 (0.7) 5.2 (0.2)
earnings
(cents per
share)
Net asset 81 (8) 73 (9.9)
value and net
tangible asset
value (cents
per share)
Weighted 174 872 545 - 174 872 545 -
average number
of shares in
issue
Number of 174 872 545 - 174 872 545 -
shares in
issue
Notes and assumptions:
1. The "before" financial information is based on Trematon`s published
audited results for the year ended 31 August 2009.
2. The "after" pro forma earnings and headline earnings are based on
Trematon`s published audited results for the year ended 31 August 2009
after taking into account the pro forma adjustments set out below.
3. The unaudited pro forma earnings figures illustrate the possible
financial effects for the year ended 31 August 2009 if the disposal had
been implemented on 1 September 2008 for income statement purposes and 31
August 2009 for balance sheet purposes.
4. The adjustments to the pro forma income statement assume that 137
million shares in Ingenuity were disposed of at 1 September 2008,
resulted in an overall accounting loss of R3.5 million on the disposal
and that a tax charge was raised as the transaction returned a taxable
capital profit of R19.8 million.
5. The income statement effects resulting from the transaction can be
summarised as follows:
a. Revenue has been adjusted to include a loss of R4 million arising on
the sale of Ingenuity shares held for capital appreciation (investment
in
associate) and a profit of R500 000 incurred on the sale of Ingenuity
shares held for trading (current investment). Interest on the cash
received amounting to R6.7 million has also been included in revenue.
b. Trading losses has been adjusted for a net loss of R3.5 million as
described above, the reversal of the fair value loss of R1.06 million
arising on the held for trading shares in Ingenuity and estimated
transaction costs of R0.5 million.
c. Interest income has been adjusted to include interest earned on the
cash received on the sale. The interest has been calculated using the
call rate the company earns on its current funds.
d. Profit on change in shareholding in associate and subsidiary has
been adjusted for the reversal of R0.6 million in Ingenuity
e. Profit from equity accounted earnings has been adjusted to include a
reversal of equity accounted earnings in Ingenuity amounting to R6.19
million
f. The adjustments to income tax are in respect of Capital gains tax of
R2 777 974 arising on the sale of the shares in Ingenuity which were
held for capital appreciation and the reversal of the recorded deferred
tax asset on the fair value decrease on the Ingenuity shares held for
trading amounting to R0.4 million. No taxable profit was recorded on
the sale of the shares in Ingenuity that was held for trading.
6.The balance sheet effects resulting from the transaction can be
summarised as follows:
a. Non-current investments has been adjusted for the reversal of the
equity accounting earnings amounting to R6.1 million, the decrease of
R602 419 on the profit on change in shareholding in Ingenuity and a
further decrease of on the opening equity accounted investment in
Ingenuity amounting to R59 518 165
b. Deferred tax has been adjusted for the previously recorded deferred
tax asset of R436 800 on the fair value decrease on the Ingenuity shares
held for trading
c. Current investments have been adjusted for the disposal of the
Ingenuity shares that were held for trading at fair value
d. Cash and cash equivalents have been adjusted to account for the
proceeds of R68.5 million received on the sale of Ingenuity shares
e. Accumulated losses will increase by R12.9 million which is the net
accounting loss for the year effect in the income statement resulting
from the transaction
f. Current tax liabilities has been adjusted to include capital gains
tax of R2.7 million in respect of the sale of shares in Ingenuity held
for capital appreciation
g. The increase in trade and trade payables results from estimated
transaction costs of R0.5 million
3. Withdrawal of cautionary announcement and further documentation
Having regard to the information disclosed above, shareholders are
advised that they no longer need to exercise caution when dealing in the
company`s securities.
A circular with information on the disposal and convening a general
meeting of shareholders will be posted to shareholders on or about 19
February 2010.
Cape Town
12 February 2010
Sponsor: Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 12/02/2010 16:41:02 Produced by the JSE SENS Department.
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