| Mon 15 Mar 2010, 7:05 | | HCI - HCI - Voluntary announcement - Proposed disposal of HCI`s interests in |
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HCI
HCI
HCI - HCI - Voluntary announcement - Proposed disposal of HCI`s interests in
Clover Industries Limited
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
(Share code: HCI ISIN: ZAE000003257)
("HCI")
Voluntary announcement - Proposed disposal of HCI`s interests in Clover
Industries Limited
1 Introduction
HCI owns indirectly through various 100% owned subsidiaries (collectively
"HCI and Immediate Holdco"), the following investment in Clover Industries
Limited ("Clover"):
* 30 881 374 million ordinary shares in the capital of Clover ("Clover
Ordinary Shares"), owned by HCI Food & Beverage Investments
(Proprietary) Limited,
* 38 057 908 million participating preferences shares in the capital of
Clover ("Clover Preference Shares"), owned collectively by Sagewise
118 (Proprietary) Limited and Move On Up 104 (Proprietary) Limited.
HCI has entered into an agreement with Clover Industries Limited for the
disposal of its ordinary shares to Clover and a restructuring of the
existing preference shares presently issued by Clover.
2 Rationale
HCI believes it would be opportune to realise its investment in Clover.
3 Particulars of the transaction
Shareholders of HCI are advised that HCI and Intermediate Holdco have
entered into a binding transaction with Clover Industries Limited
("Clover") pursuant to which:
* Clover will repurchase from HCI and Intermediate Holdco all of the
Clover ordinary shares ("Sale shares") held by HCI and Intermediate
Holdco, being 34,99% of the issued ordinary shares of Clover, for an
aggregate purchase price of R 337,4 million, to be applied against the
reserves of Clover and such shares to be cancelled and restored to the
status of authorised share capital in Clover ("the Buy-Back
Transaction"), and
* Clover will pay a special dividend to all holders of Clover Preference
Shares of R4.10 per Clover Preference Share ("the Special Dividend").
HCI will receive an amount of R156 million as a special dividend, and
* the rights attaching to the preference shares shall will be amended
such that the Clover Preference Shares cease to participate in Clover
beyond a fixed dividend (calculated at 90% of the Prime rate of ABSA
Bank Limited) and such that the Clover Preference Shares shall be
redeemed by Clover after three years and one day from the date of such
amendment ("the Preference Share Amendment"). HCI`s remaining
investment in Clover will be an amount of R110 million in the form of
preference shares, which Clover will be obliged to redeem at a fixed
date in three years time.
(collectively "the Proposed Transactions").
A further transaction has been proposed pursuant to which certain employees
of Clover will acquire 30% of the Clover Ordinary Shares ("the Management
Transaction"). HCI and intermediate Holdco are not parties to the
Management Transaction.
4 Conditions Precedent
The transaction is subject to the fulfilment of the following conditions
precedent:
* The Buy-Back Transaction, the Special Dividend, the Preference Share
Amendment and the Management Transaction are inter-conditional such
that none of them will be implemented unless the others become
unconditional, and
* The Proposed Transactions and The Management Transaction are
conditional on, inter alia, required shareholder and regulatory
approvals being obtained by not later than 30 April 2010 or such later
date as may be agreed between HCI and Intermediate Holdco and Clover.
5 Sale consideration
The sale consideration for the Sale Shares is the sum of R337,4 million.
6 Financial effects
The pro forma financial effects of the Transaction on HCI`S earnings per
share, headline earnings per share, net asset value per share and net
tangible asset value per share for the six months ended 30 September 2009
are not significant (i.e. are less than 3%), and have therefore not been
disclosed.
15 March 2010
Cape Town
Investment bank and Sponsor
Investec Corporate Finance
Date: 15/03/2010 07:05:11 Produced by the JSE SENS Department.
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