| Mon 14 Jun 2010, 11:39 | | BCX - Business Connexion Group Limited - Disposal of assets between Group |
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BCX
BCX
BCX - Business Connexion Group Limited - Disposal of assets between Group
Companies
Business Connexion Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/005282/06)
Share code: BCX
ISIN: ZAE000054631
DISPOSAL OF ASSETS BETWEEN GROUP COMPANIES
1. INTRODUCTION
Shareholders are advised that given a number of events driven by the Group`s
revitalisation programme it was necessary to revisit and simplify the Group
structure. The Business Connexion Group Limited ("Business Connexion" or "the
company" or "the Group") Board has approved the following transaction in terms
of which it will dispose of assets owned by its wholly-owned subsidiary,
Business Connexion Technology Holdings (Pty) Limited ("BCTH"), to another
subsidiary, Business Connexion (Pty) Limited ("BCX PTY"), which is 79.99% owned
by Business Connexion with the remaining 20.01% held by its Black Economic
Empowerment ("BEE") partner, Gadlex (Pty) Limited ("Gadlex"). The assets to be
disposed of by BCTH to BCX PTY are Nanoteq (Pty) Limited("Nanoteq")(100% owned)
and the two data centre buildings NDC1 on Erf 12 Midridge Park Ext 8 and NDC2 on
Erf 47 Midridge Park Ext 10 ("the Disposal").
Nanoteq is a supplier of high-grade cryptographic security products and
solutions. Due to the specialist nature of cryptographic security and the
limited size of the market, Nanoteq represents the bulk of the investment of the
SA Government in this domain.
The Tier IV data centres (design certification as awarded by the Uptime
Institute) continue to be a major part of the Group`s infrastructure. In
preparation for the world of cloud computing, significant capability has been
built in services-on-demand. Services-on-demand allows clients to select
affordable, standardised services such as flexible computing and storage as well
as secure messaging and e-mail. The ability to deliver a scalable and cost
effective service is facilitated by means of shared information technology
infrastructure.
2. THE DISPOSAL
Nanoteq will be sold for R35,5m and the two data centre buildings for R132,4m.
These considerations are at market value as determined by independent valuators
and will be used to settle existing inter-group loan accounts. The combined
consideration to be received by BCTH from BCX PTY is R167,9m. The non-
controlling interest in this consideration at, 20.01%, when divided by Business
Connexion`s current market capitalisation of approximately R1.5bn equates to a
categorisation calculation of approximately 2.2%. This falls below the Category
2 transaction threshold in terms of the JSE Limited ("JSE") Listings
Requirements. However, as explained in paragraph 4 below, the Disposal is deemed
to be a small related party transaction and therefore must be announced.
The effective date of the Disposal is 1 June 2010.
The pro forma financial effects of the Disposal on the Group`s earnings per
share, headline earnings per share, net asset value per share and net tangible
asset value per share for the period ended 28 February 2010 are not significant
(i.e. are less than 3%), and have therefore not been disclosed.
3. CONDITIONS PRECEDENT
The implementation of the Disposal is not subject to any conditions precedent.
4. SMALL RELATED PARTY TRANSACTION
Gadlex is a 20.01% shareholder in BCX PTY and as such the JSE Listings
Requirements require written confirmation from an independent professional
expert, confirming that the Disposal is fair to Business Connexion`s
shareholders. Deloitte and Touche Corporate Finance has confirmed that the
Disposal is fair and their report is available for inspection at Business
Connexion`s registered office.
Midrand
14 June 2010
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 14/06/2010 11:39:01 Produced by the JSE SENS Department.
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