| Thu 1 Apr 2010, 16:19 | | HCI - Hosken Consolidated Investments - Revised timetable for the proposed |
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HCI
HCI
HCI - Hosken Consolidated Investments - Revised timetable for the proposed
merger of Tsogo and Gold Reef
Hosken Consolidated Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
(Share code: HCI ISIN: ZAE000003257)
("HCI" or "the Company")
REVISED TIMETABLE FOR THE PROPOSED MERGER OF TSOGO SUN HOLDINGS (PROPRIETARY)
LIMITED ("TSOGO") AND GOLD REEF RESORTS LIMITED ("GOLD REEF") AND UPDATED
FINANCIAL EFFECTS
Further to the SENS announcement released on 18 February 2010 regarding the
proposed merger of Tsogo and Gold Reef, HCI shareholders are hereby informed
that the circular to HCI shareholders will be posted on Saturday, 3 April 2010.
In addition, shareholders should note the revised salient dates and times below:
Salient dates and times 2010
Salient dates and times announcement released on Thursday, 1 April
SENS
Circular posted to HCI shareholders on Saturday, 3 April
Salient dates and times announcement published in Tuesday, 6 April
the South African press on
Last day for the receipt of proxy forms for the Friday, 23 April
HCI General Meeting by 10:00 on
HCI General Meeting held at 10:00 on Monday, 26 April
Results of the HCI General Meeting released on Monday, 26 April
SENS on
Results of the HCI General Meeting published in Wednesday, 28 April
the South African press on
Special resolution lodged for registration with Wednesday 28 April
CIPRO on
Notes:
All times shown above are South African local times.
These salient dates and times are subject to amendments. Any such relevant
amendments will be released on SENS and published in the South African press.
HCI shareholders are referred to the Gold Reef announcement to be released on
SENS today (Thursday, 1 April 2010) outlining the revised salient dates and
times for Gold Reef shareholders which are in line with the dates and times
above.
UNAUDITED PRO FORMA FINANCIAL EFFECTS
HCI shareholders should note that the unaudited pro forma financial effects
presented in the circular differ to those disclosed in the SENS announcement to
HCI shareholders on 18 February 2010 due to:
an increase in the estimated transaction costs for the Proposed Transaction; and
the settlement of the Gold Reef executives` Service Agreement as explained in
the note 6 to the pro forma financial effects below.
In addition, the JSE has requested that the pro forma effects are shown for two
scenarios:
after the implementation of the Nafhold transaction; and
excluding the Nafhold transaction.
and that the pro forma financial effects are disclosed based on both Gold Reef`s
interim results (as shown in the SENS announcement on 18 February 2010 and in
the HCI circular), as well as the latest six months results for Gold Reef to 31
December 2009 which are calculated by subtracting the interim consolidated
results to 30 June 2009 from the reviewed annual results to 31 December 2009.
The unaudited pro forma financial effects of HCI shown below have been prepared
for illustrative purposes only to assist HCI shareholders to assess how the
Proposed Transaction might impact on the financial position and results of HCI.
The unaudited pro forma financial effects have been disclosed in terms of the
JSE Listings Requirements and because of their nature may not fairly reflect
HCI`s financial position or results. The unaudited pro forma financial effects
are the responsibility of the directors of HCI.
The updated pro forma financial effects are shown below.
PRO FORMA FINANCIAL RESULTS BASED ON THE HCI INTERIM FINANCIAL INFORMATION TO
SEPTEMBER 2009 AND THE INTERIM GOLD REEF FINANCIAL INFORMATION TO JUNE 2009
Pro forma financial effects after the Nafhold transaction
The pro forma financial effects below are shown assuming that the Nafhold
transaction which was announced on 14 December 2009 is implemented.
As After % After %
reporte the Change the Change
d 30 Nafhold Proposed
Septemb transac Transact
er 2009 tion ion
(1) (10) (2)(3)
(4) (5)
(6)(7)
Earnings per HCI 100.09 115.37 15.3% 4,639.52 3,921.6
share (cents) %
Headline earnings 104.02 119.30 14.7% 94.64 -20.7%
per HCI share
(cents) (5) (8)
Net asset value 3,324.1 3,324.1 0.0% 7,197.52 116.5%
("NAV") per HCI 6 6
share (cents) (9)
Net tangible 1,620.8 1,152.1 -28.9% 6,614.74 474.1%
asset value 1 7
("NTAV") per HCI
share (cents)
Weighted average 124,916 124,916 0.0% 124,916 0.0%
number of HCI
shares
(thousands)
Actual number of 125,239 125,239 0.0% 125,239 0.0%
HCI shares
(thousands)
Notes:
The unaudited pro forma financial information of the transactions are indicative
only and have been based on the assumptions set out below:
The published unaudited consolidated interim results of HCI for the six -month
period ended 30 September 2009 have been used.
The Nafhold transaction and the Proposed Transaction were effected on 1 April
2009 for income statement purposes and on 30 September 2009 for balance sheet
purposes.
The effects of the Proposed Transaction have been calculated using the unaudited
consolidated interim results of Gold Reef for the six-month period ended 30 June
2009.
It has been assumed that after the implementation of the Proposed Transaction
HCI will hold an effective 41% of Gold Reef (which is HCI`s effective holding
post the implementation of the Nafhold transaction) and will exert significant
influence over Gold Reef. As a result, it is assumed that TSH is accounted for
as an associate and will no longer be consolidated as a subsidiary of HCI.
Transaction costs of R 43 million, which are once-off in nature. If the effect
of these once-off transaction costs and the costs referred to in note 6 are
excluded, the Proposed Transaction would result in a 2.9% increase in headline
earnings per share.
Costs of R42.8 million (after tax effects) incurred by Gold Reef, which arise
from the No Fault Termination (as defined in the Gold Reef executives` Service
Agreements) of the Gold Reef executives` Service Agreements based on the
assumption of the No Fault Termination being on 31 December 2010, and at the
Gold Reef pre-cautionary share price, which are once-off in nature. If the
effect of these once-off costs and the once-off transaction costs referred to in
note 5 are excluded, the Proposed Transaction would result in a 2.9% increase in
headline earnings per share.
A market value of R19.25 per Gold Reef share, being the closing price on 29
January 2010 which is the day the HCI cautionary announcement was released, has
been used to calculate the pro forma gain on the loss of control ("pro forma
gain") of TSH. A corporate tax rate of 28% with the Capital Gains Tax inclusion
rate of 50% is assumed.
The pro forma gain arises as a result of TSH no longer being consolidated, and
the investment in the associate being accounted for at its fair value at the
transaction date. The pro forma gain is calculated as the difference between the
fair value of the Gold Reef shares received as consideration for the NAV of TSH
which is no longer consolidated as a subsidiary. The pro forma gain is excluded
from headline earnings per share and accounts for the difference in the effect
on earnings and headline earnings per share.
The increase in NAV is attributable to the net effect of the gain on the loss of
control and the deconsolidation of TSH.
Notes relating to the Nafhold transaction:
Separate disclosure of the effects of the Nafhold transaction are shown based on
assumptions which are consistent with those used in the announcement released on
SENS on 14 December 2009:
The cash portion of the TIH repurchase consideration would otherwise have been
invested with financial institutions at daily call rates. An average call rate
of 7.53%, after deducting taxation of 28%, was used for the period.
The coupon on the preference shares to be issued as part of the TIH repurchase
consideration has been assumed to be 8.27%. It has been assumed that TIH will
have sufficient STC credits at the relevant dividend dates.
Pro forma financial effects excluding the Nafhold transaction
The pro forma financial effects below are shown excluding the effect of the
Nafhold transaction which was announced on 14 December 2009.
As After the % Change
reported Proposed
30 Transactio
September n (2)(3)
2009 (1) (4) (5)
(6)(7)
Earnings per HCI 100.09 3,478.12 3,375.0%
share (cents)
Headline earnings 104.02 85.61 -17.7%
per HCI share
(cents) (5) (8)
Net asset value 3,324.16 6,048.13 81.9%
("NAV") per HCI
share (cents) (9)
Net tangible asset 1,620.81 5,465.35. 237.2%
value ("NTAV") per
HCI share (cents)
Weighted average 124,916 124,916 0.0%
number of HCI
shares (thousands)
Actual number of 125,239 125,239 0.0%
HCI shares
(thousands)
Notes:
The unaudited pro forma financial information of the transactions are indicative
only and have been based on the assumptions set out below:
The published unaudited consolidated interim results of HCI for the six -
month period ended 30 September 2009 have been used.
The Proposed Transaction was effected on 1 April 2009 for income statement
purposes and on 30 September 2009 for balance sheet purposes.
The effects of the Proposed Transaction have been calculated using the unaudited
consolidated interim results of Gold Reef for the six-month period ended 30 June
2009.
It has been assumed that after the implementation of the Proposed Transaction
HCI will hold an effective 31% of Gold Reef and will exert significant influence
over Gold Reef. As a result, it is assumed that TSH is accounted for as an
associate and will no longer be consolidated as a subsidiary of HCI.
Transaction costs of R 43 million, which are once-off in nature. If the effect
of these once-off transaction costs and the costs referred to in note 6 are
excluded the transaction would result in a 2.5% increase in headline earnings
per share.
Costs of R42.8 million (after tax effects) incurred by Gold Reef, which arise
from the No Fault Termination (as defined in the Gold Reef executives` Service
Agreements) of the Gold Reef executives` Service Agreements based on the
assumption of the No Fault Termination being on 31 December 2010, and at the
Gold Reef pre-cautionary share price, which are once-off in nature. If the
effect of these once-off costs and the once-off transaction costs referred to in
note 5 are excluded, the Proposed Transaction would result in a 2.5% increase in
headline earnings per share.
A market value of R19.25 per Gold Reef share, being the closing price on 29
January 2010 which is the day the HCI cautionary announcement was released, has
been used to calculate the pro forma gain on the loss of control ("pro forma
gain") of TSH. A corporate tax rate of 28% with the Capital Gains Tax inclusion
rate of 50% is assumed.
The pro forma gain arises as a result of TSH no longer being consolidated, and
the investment in the associate being accounted for at its fair value at the
transaction date. The pro forma gain is calculated as the difference between the
fair value of the Gold Reef shares received as consideration for the NAV of TSH
which is no longer consolidated as a subsidiary. The pro forma gain is excluded
from headline earnings per share and accounts for the difference in the effect
on earnings and headline earnings per share.
The increase in NAV is attributable to the net effect of the pro forma gain and
the deconsolidation of TSH.
PRO FORMA FINANCIAL RESULTS BASED ON THE HCI INTERIM FINANCIAL INFORMATION TO
SEPTEMBER 2009 AND THE SIX MONTH RESULTS FOR GOLD REEF ENDED 31 DECEMBER 2009
BASED ON THE YEAR END REVIEWED FINANCIAL INFORMATION TO DECEMBER 2009
Pro forma financial effects after the Nafhold transaction
The pro forma financial effects below are shown assuming that the Nafhold
transaction which was announced on 14 December 2009 is implemented.
As After % After %
reporte the Change the Change
d 30 Nafhold Proposed
Septemb transac Transact
er 2009 tion ion
(1) (10) (2)(3)
(4) (5)
(6)(7)
100.09 115.37 15.3% 4,661.74 3,940.8
Earnings per HCI %
share (cents)
Headline earnings 104.02 119.30 14.7% 116.86 -2.0%
per HCI share
(cents) (5) (8)
Net asset value 3,324.1 3,324.1 0.0% 7,197.52 116.5%
("NAV") per HCI 6 6
share (cents) (9)
Net tangible 1,620.8 1,152.1 -28.9% 6,614.74 474.1%
asset value 1 7
("NTAV") per HCI
share (cents)
Weighted average 124,916 124,916 0.0% 124,916 0.0%
number of HCI
shares
(thousands)
Actual number of 125,239 125,239 0.0% 125,239 0.0%
HCI shares
(thousands)
Notes:
Refer to the notes in section 2.1 above which apply except for in the case of
the notes below which replace the relevant note from section 2.1:
The effects of the Proposed Transaction have been calculated based on the six
month results for Gold Reef to December 2009 which have been calculated by
subtracting the consolidated interim results of Gold Reef for the six-month
period ended 30 June 2009 from the year end consolidated reviewed results for
the year ended 31 December 2009.
Transaction costs of R 43 million, which are once-off in nature. If the effect
of these once-off transaction costs and the costs referred to in note 6 are
excluded, the Proposed Transaction would result in a 21.6% increase in headline
earnings per share.
Costs of R42.8 million (after tax effects) incurred by Gold Reef, which arise
from the No Fault Termination (as defined in the Gold Reef executives` Service
Agreements) of the Gold Reef executives` Service Agreements based on the
assumption of the No Fault Termination being on 31 December 2010, and at the
Gold Reef pre-cautionary share price, which are once-off in nature. If the
effect of these once-off costs and the once-off transaction costs referred to in
note 5 are excluded, the Proposed Transaction would result in a 21.6% increase
in headline earnings per share.
Pro forma financial effects excluding the Nafhold transaction
The pro forma financial effects below are shown excluding the effect of the
Nafhold transaction which was announced on 14 December 2009.
As After the % Change
reported Proposed
30 Transactio
September n (2)(3)
2009 (1) (4) (5)
(6)(7)
Earnings per HCI 100.09 3,494.71 3,391.6%
share (cents)
Headline earnings 104.02 102.20 -1.7%
per HCI share
(cents) (5) (8)
Net asset value 3,324.16 6,048.13 81.9%
("NAV") per HCI
share (cents) (9)
Net tangible asset 1,620.81 5,465.35. 237.2%
value ("NTAV") per
HCI share (cents)
Weighted average 124,916 124,916 0.0%
number of HCI
shares (thousands)
Actual number of 125,239 125,239 0.0%
HCI shares
(thousands)
Notes:
Refer to the notes in section 2.2 above which apply except for in the case of
the notes below which replace the relevant note from section 2.2:
The unaudited pro forma financial information of the transactions are indicative
only and have been based on the assumptions set out below:
The effects of the Proposed Transaction have been calculated based on the six
month results for Gold Reef to December 2009 which have been calculated by
subtracting the consolidated interim results of Gold Reef for the six-month
period ended 30 June 2009 from the year end consolidated reviewed results for
the year ended 31 December 2009.
Transaction costs of R 43 million, which are once-off in nature. If the effect
of these once-off transaction costs and the costs referred to in note 6 are
excluded the transaction would result in a 18.5% increase in headline earnings
per share.
Costs of R42.8 million (after tax effects) incurred by Gold Reef, which arise
from the No Fault Termination (as defined in the Gold Reef executives` Service
Agreements) of the Gold Reef executives` Service Agreements based on the
assumption of the No Fault Termination being on 31 December 2010, and at the
Gold Reef pre-cautionary share price, which are once-off in nature. If the
effect of these once-off costs and the once-off transaction costs referred to in
note 5 are excluded, the Proposed Transaction would result in a 18.5% increase
in headline earnings per share.
Cape Town
1 April 2010
Sponsor to HCI
Investec Bank Limited
Investment bank to HCI and Tsogo
Investec Corporate Finance
Independent expert to HCI
PKF Corporate Finance
Independent reporting accountants to HCI
PKF (Jhb) Inc.
Legal adviser to Tsogo
Tabacks
Legal advisers to HCI and TIH
Edward Nathan Sonnenbergs Inc
Date: 01/04/2010 16:19:28 Produced by the JSE SENS Department.
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