| Thu 3 Jun 2010, 16:30 | | SKJ - Sekunjalo Investments Limited - Sekunjalo Subscribes For Up To 25% |
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SKJ
SKJ
SKJ - Sekunjalo Investments Limited - Sekunjalo Subscribes For Up To 25%
Shareholding in SAAB SA and Completes New Strategic Agreement With SAAB AB
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/006093/06)
Share code: SKJ & ISIN: ZAE000017893
("Sekunjalo" or "the company")
SEKUNJALO SUBSCRIBES FOR UP TO 25% SHAREHOLDING IN SAAB SA AND COMPLETES NEW
STRATEGIC AGREEMENT WITH SAAB AB WITH STRONG FOCUS ON THE DEFENSE SECTOR IN SUB
SAHARAN AFRICA AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
1. INTRODUCTION
Shareholders are hereby advised that Sekunjalo has concluded an agreement ("the
agreement"), on 27 May 2010, with Saab AB and Saab SA ("the parties"), whereby
the parties agreed to form a strategic relationship in relation to the defence
and civil security business performed by Saab SA and in terms of which Sekunjalo
will become a shareholder of Saab SA (hereinafter referred to as "the
transaction").
2. SALIENT TERMS OF THE TRANSACTION
In terms of the aforesaid agreement Sekunjalo shall acquire an upfront equity
interest in Saab SA entitling Sekunjalo to 25% voting rights and 5% economic
entitlement. Sekunjalo will be entitled to increase its economic interest to a
maximum of 25% which is based on the performance of Saab SA over the 5 year
period. Such economic interest will entitle Sekunjalo to participate in the
distribution of assets or capital of Saab SA (including, inter alia, dividends,
payments and other distributions), as determined in accordance with a
predetermined formula in terms of the agreement.
Due to the focus of the transaction being in the defence sector, Sekunjalo`s
investment in Saab SA excludes any entitlement to participate in profits of or
any distribution of the assets or capital and/or vote in any matters related to
the subsidiaries of Saab SA, Saab Grintek Technologies (Pty) Limited, and
Fullinput (Pty) Limited.
Sekunjalo will also be entitled to appoint 2 directors to the board of directors
of Saab SA.
3. BUSINESS OF SAAB SA
Saab SA is a subsidiary of Saab AB, a listed company in Sweden, and serves the
global market with world leading products, services and solutions ranging from
defence to civil security. Saab AB is desirous to improve its global market
position and more specifically in South Africa and the Sub-Saharan region.
Saab`s key offerings include command and control solutions, tactical
communication systems and products, aerospace, surveillance and sensor systems,
and a wide range of civil security applications including disaster management
solutions and integrated security solutions for the protection of national key
points.
4. RATIONALE FOR THE TRANSACTION
Sekunjalo is firmly established as the pre-eminent black empowerment group
continuously looking for strategic opportunities. This relationship with Saab AB
is in line with the company strategy to becoming a partner of choice to
multinationals. The company`s World Economic Forum Global status provides a
network platform with the international business community which brings
strategic partners and opportunities to the Sekunjalo Group. This transaction
reflects Sekunjalo`s value of job creation, alleviating poverty and finding
solutions in Africa and this also reinforces Saab AB`s commitment to industrial
growth and future prosperity of South Africa.
PURCHASE CONSIDERATION
The purchase consideration for the transaction is a nominal amount for the 372
subscription shares.
6. EFFECTIVE DATE
The effective date is the last date of the calendar month during which all of
the conditions precedent to the transaction has been fulfilled. The transaction
is subject to conditions normal for a transaction of this nature.
7. OTHER INFORMATION TO SHAREHOLDERS
To the extent required by the JSE , shareholders will be advised in due course
of any action that may be required of them in terms of the transaction.
8. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects of the transaction are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of Sekunjalo`s financial position nor of the effect on future
earnings after the transaction. Set out below are the unaudited pro forma
financial effects of the transaction based on Sekunjalo`s unaudited interim
results for the 6 months ended 28 February 2010, The directors of Sekunjalo are
responsible for the preparation of the unaudited pro forma financial effects.
Unaudited Unaudited % change
Audited after
before transaction
transaction (2)(3)(4)
(1)
EPS (cents) 0.71 5.06 610.76%
HEPS(cents) 0.23 4.58 1900.45%
NAV per 81.26 85.63 5.38%
share
(cents)
NTAV per 64.56 68.91 6.74%
share
(cents)
Shares in 489 339 489 339 -
issue (`000)
Weighted 489 339 489 339 -
average
number of
shares in
issue (`000)
Notes:
1. Extracted from Sekunjalo`s unaudited interim results for the period
ended 28 February 2010;
2. The unaudited pro forma financial effects after the transaction has
been calculated based on the assumption that the transaction was
effected on 1 September 2009 for the purposes of calculating the
earnings per share ("EPS") and headline earnings per share ("HEPS")
effects and based on the assumption that the transaction was effected
on 28 February 2010 for purposes of calculating the net asset value
("NAV") per share and net tangible asset value ("NTAV") per share;
3. The deferred tax is calculated at an effective tax rate of 14%; and
4. The investment in Saab SA is accounted as a financial investment at
fair value through profit and loss based on the directors` valuation
of Saab SA at transaction date.
9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Sekunjalo shareholders are referred to the cautionary announcement dated 11 May
2010, and caution is no longer required to be exercised by shareholders when
dealing in their securities.
Cape Town
3 June 2010
Sponsor to Sekunjalo
PSG Capital (Pty) Limited
Investment Bank to Saab SA
Investec Corporate Finance
Date: 03/06/2010 16:30:01 Produced by the JSE SENS Department.
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