| Tue 22 Jun 2010, 7:18 | | BRT/BRN - Brimstone - Company Announcement |
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BRT BRN
BRT
BRT/BRN - Brimstone - Company Announcement
BRIMSTONE INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/010442/06)
Share Code: BRT
ISIN Number: ZAE000015277
Share Code: BRN
ISIN Number: ZAE000015285
("Brimstone" or "the Company")
ANNOUNCEMENT REGARDING THE RESTRUCTURE OF BRIMSTONE`S INTEREST IN LIFE
HEALTHCARE GROUP HOLDINGS LIMITED ("LIFE HEALTHCARE"), THE LISTING OF HEALTH
STRATEGIC INVESTMENTS LIMITED ("HEALTH") ON THE JSE, THE UNBUNDLING OF THE
MAJORITY OF BRIMSTONE`S RESTRUCTURED INTEREST TO BRIMSTONE SHAREHOLDERS AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Holders of ordinary and "N" ordinary Brimstone shares ("Brimstone
Shareholders") are referred to the SENS announcement and circular dated 23
April 2010 wherein it was announced that, subsequent to the successful
implementation of the listing of Life Healthcare on the exchange operated
by the JSE Limited ("JSE") on Thursday, 10 June 2010 ("Life Listing") and
the Life Buyback (as defined in paragraph 2 below) (including the Newshelf
831 Buyback (as defined in paragraph 2 below)) and the Newshelf 778 Buyback
(as defined in paragraph 2 below) ("Buybacks"), Brimstone, together with
Mvelaphanda Group Limited ("Mvelaphanda") planned to undertake a series of
internal restructurings that will culminate in the unbundling of certain
Brimstone and Mvelaphanda controlled entities` remaining shareholdings in
Life Healthcare to Brimstone Shareholders and holders of ordinary
Mvelaphanda shares ("Mvelaphanda Shareholders") respectively.
The purpose of this announcement is to provide Brimstone shareholders with
information relating to the Buybacks, the series of transactions undertaken
and/or to be undertaken by Brimstone, Mvelaphanda and various entities
controlled by Brimstone and Mvelaphanda, including the Share Exchange (as
defined in paragraph 3 below) ("Restructure"), the proposed unbundling by
Brimstone of all its directly held Health ordinary shares to Brimstone
Shareholders ("Unbundling"), the conditions precedent to which they are
subject and the proposed timetable applicable thereto.
A circular will be posted to Brimstone Shareholders in due course providing
information on the Restructure and the Unbundling ("the circular"), and
incorporating a notice convening a general meeting of Brimstone
shareholders ("general meeting") to approve the Restructure and the
Unbundling. The circular will be posted together with the Health pre-
listing statement ("Health PLS") which contains information relating to
Health, the listed entity which will hold Brimstone and Mvelaphanda`s
restructured interests in Life Healthcare, the shares of which are to be
unbundled to Brimstone and Mvelaphanda Shareholders respectively.
2. Progress of the Buybacks
Life Healthcare listed on the JSE on Thursday, 10 June 2010. Subsequent to
the Life Listing the following has been implemented:
- the buyback by Life Healthcare of 30.85% of the Life Healthcare
ordinary shares ("Life Healthcare ordinary shares") in issue prior to
the Life Listing ("Life Buyback"), including:
- a portion of the Life Healthcare ordinary shares held by Business
Venture Investments No 813 (Proprietary) Limited ("Bidco 813") ;
and
- a portion of the Life Healthcare ordinary shares held by Newshelf
831 (Proprietary) Limited, a wholly-owned subsidiary of Brimstone
("Newshelf 831") ("Newshelf 831 Buyback").
- the buyback of all of the Bidco 813 ordinary shares held by the Ammed
Management Trust ("Ammed") by Bidco 813;
- the buyback of all of the Bidco 813 ordinary shares held by Newshelf
779 (Proprietary) Limited ("Newshelf 779") by Bidco 813; and
- Bidco 813 has acquired a further 1.00% of Life Healthcare.
Subject to the relevant conditions precedent set out in paragraph 7 below,
it is anticipated that the following steps will have been completed before
Friday, 2 July 2010:
- the remaining cash proceeds in Bidco 813 will have been distributed
to Business Venture Investments No 931 (Proprietary) Limited ("Bidco
931") as a dividend;
- Bidco 931 will declare a dividend of R180 million each to both Health
and Newshelf 778 (Proprietary) Limited, a wholly-owned subsidiary of
Brimstone at the time ("Newshelf 778");
- Bidco 931 will have implemented a specific share buyback of Bidco 931
ordinary shares from Health for a consideration of R172.5 million and
Bidco 931 will have issued Bidco 931 A ordinary shares to Health; and
- the buyback of Bidco 931 ordinary shares held by Newshelf 778
("Newshelf 778 Buyback") will have been implemented utilising the
remaining proceeds (R412.6 million) in Bidco 931 and Bidco 931 will
have issued Bidco 931 A ordinary shares to Newshelf 778.
In aggregate Brimstone, through Newshelf 831 and Newshelf 778, will receive
cash proceeds of R527.4 million through the Newshelf 831 Buyback and the
Newshelf 778 Buyback and an additional R180 million as a dividend received
by Newshelf 778 from Bidco 931.
These proceeds have been and/or will be utilised to, inter alia, redeem
certain funding instruments in Newshelf 778 (including all of the IDC
preference share funding) and Newshelf 831 to the extent possible.
Through Newshelf 831, Brimstone will participate in the 30 day
overallotment option that Newshelf 831 (and other Life Healthcare
shareholders prior to the Life Listing) granted the joint-global
coordinators and joint bookrunners for the Life Listing ("Joint
Bookrunners") to purchase up to 8 725 477 additional Life Healthcare
ordinary shares from Newshelf 831 (0.84% of the Life Healthcare ordinary
shares in issue) ("Life Overallotment") at the price at which Life
Healthcare ordinary shares were issued to a person(s) or entity(ies) that
subscribed for and/or bought Life Healthcare ordinary shares on the Life
Listing ("Investing Life Shareholders") and which was determined through
the bookbuild of Life Healthcare (being R13.50) ("Life bookbuild price")
for the purpose of covering short positions resulting from overallotments
or from sales of Life Healthcare ordinary shares on or before the end of
the 30 day period from the Life Listing, ending on Friday, 9 July 2010
("Stabilisation Period"). An announcement will be released on SENS after
this date to inform Brimstone Shareholders of the exact number of Life
Healthcare shares disposed of by Brimstone in terms of the Life
Overallotment.
Following the implementation of the steps set out above but prior to the
implementation of the Restructure and the Unbundling, Brimstone will hold
an effective 15.63% interest in Life Healthcare. This effective holding
comprises the following:
- 3.27% through Newshelf 831 (excluding any participation in the
Life Overallotment); and
- 12.36% through Newshelf 778.
3. Overview of the Restructure and the Unbundling
3.1 The Restructure
Brimstone intends to exchange its entire indirect shareholding in Life
Healthcare, held through Newshelf 778 (approximately 12.36% of Life
Healthcare), for 128,849,235 ordinary shares in Health ("Health
ordinary shares") representing a 46.48% stake in the enlarged issued
share capital of Health (representing an effective 12.36% of Life
Healthcare) ("Share Exchange"). Health will then be listed on the JSE
as an Asset Backed Security on or about Monday, 16 August 2010
("Health Listing"). The only asset of Health at the time of the Health
Listing will be a 26.60% direct holding in Life Healthcare. At listing
Health will hold 1 ordinary share in Life Healthcare ("Life Healthcare
ordinary share") for every 1 Health ordinary share, resulting in 1
Health ordinary share effectively representing 1 Life Healthcare
ordinary share. The proposed transaction steps through which the Share
Exchange will occur are set out in paragraph 4 below.
Prior to the Unbundling Brimstone intends selling 14.90% (19,197,619
Health ordinary shares) of its then direct holding in Health to
Newshelf 1055 (Proprietary) Limited ("Subco"), a wholly-owned
subsidiary of Brimstone. This represents a 1.84% stake in Life
Healthcare.
3.1 The Unbundling
Following the Health Listing and in accordance with the salient dates
and times as set out in paragraph 10 below, Brimstone and Mvelaphanda
will unbundle their respective stakes in Health to Brimstone and
Mvelaphanda Shareholders respectively. Brimstone Shareholders will
receive 40 Health ordinary shares for every 100 Brimstone shares held
on Friday, 20 August 2010 ("the Record Date"). The Unbundling will not
include the Health ordinary shares sold to Subco prior to the
Unbundling.
Following the implementation of the Restructure and the Unbundling
Brimstone will retain an effective 6.25% interest in Life Healthcare
as follows:
- 3.27% in Life Healthcare through Newshelf 831 (prior to any
participation in the Life Overallotment);
- 6.93% in Health through Subco (representing an effective 1.84%
stake in Life Healthcare); and
- 4.28% in Health through treasury share holdings in Brimstone
(representing an effective 1.14% stake in Life Healthcare).
Pursuant to the Unbundling, Brimstone will effectively unbundle a
35.27% stake in Health (representing a 9.38% stake in Life Healthcare)
to Brimstone Shareholders.
Following the expiry of the Lock-up Period (as defined in paragraph 6
below), it is the intention of the directors of Health to unbundle the
underlying Life Healthcare ordinary shares to holders of Health
ordinary shares ("Health Shareholders").
4. Transaction steps of the Restructure and the Unbundling
Please refer to Brimstone`s website for additional diagrammatic information
regarding the structure of the Restructure and the Unbundling at:
www.brimstone.co.za/circulars.htm
The Restructure and the Unbundling will consist of the following steps:
4.1 Step 1
Mvelaphanda Strategic Investments (Proprietary) Limited ("MSI"), a
wholly-owned subsidiary of Mvelaphanda, will unbundle its 100%
shareholding in Health to Mvelaphanda in terms of section 46 of the
Income Tax Act, 1962 ("Income Tax Act").
4.2 Step 2 (a)
As set out in paragraph 3.1 above and subject to Brimstone Shareholder
approval as contained in the notice of general meeting forming part of
the circular referred to in paragraph 9 below, Brimstone will dispose
of its entire shareholding in Newshelf 778 in terms of section 42 of
the Income Tax Act and in exchange will receive 128 849 235 Health
ordinary shares (46.48% of the enlarged issued share capital of Health
and representing a 12.36% stake in Life Healthcare) as consideration
and as contemplated in the agreement governing the Share Exchange
("Newshelf 778 Sale of Shares Agreement"). In terms of section 228
("section 228") of the Companies Act, 1973, as amended ("Companies
Act"), the resolution to approve the Share Exchange requires the
approval of a 75% majority of Brimstone Shareholders as the Share
Exchange would in effect constitute a section 228 disposal ("Section
228 Disposal").
Brimstone`s (46.48%) and Mvelaphanda`s (53.52%) shareholdings in
Health will replicate Newshelf 778`s and Health`s respective
shareholdings in Bidco 931 prior to the Share Exchange.
4.3 Step 2 (b)
Simultaneously with step 2(a), Newshelf 778 will issue 900 Newshelf
778 A ordinary shares to Brimstone.
4.4 Step 3
Bidco 813 will (pursuant to a resolution in terms of section 90 of the
Companies Act by its board of directors) unbundle its 26.60% interest
in Life Healthcare to Bidco 931 by making a distribution in specie
thereof.
4.5 Step 4
Bidco 931 will (pursuant to a special resolution of its shareholders
in terms of section 228 of the Companies Act and a resolution in terms
of section 90 of the Companies Act by its board of directors) unbundle
its 26.60% interest in Life Healthcare to its shareholders, Newshelf
778 and Health, by making a distribution in specie thereof.
4.6 Step 5
Following step 4, Newshelf 778 (pursuant to a special resolution of
its shareholders in terms of section 228 of the Companies Act and a
resolution in terms of section 90 of the Companies Act by its board of
directors), in anticipation of liquidation, will distribute its 12.36%
interest in Life Healthcare and the Bidco 931 A ordinary shares
previously issued to Newshelf 778, to its sole shareholder, Health.
4.7 Step 6
Brimstone will sell 19 197 619 Health ordinary shares (representing
14.90% of Brimstone`s stake in Health and an effective 1.84% stake in
Life Healthcare) to Subco for additional shares in Subco;
4.8 Step 7
Newshelf 778 A ordinary shares issued to Brimstone in terms of step 2
(b) will be repurchased and cancelled by Newshelf 778.
4.9 Step 8
Health will be listed as an Asset Backed Security on the JSE on or
about Monday, 16 August 2010.
4.10 Step 9
Subject to various conditions precedent, including the necessary
approvals of their respective shareholders as further detailed in
paragraph 7 below. Brimstone and Mvelaphanda will unbundle their
respective interests in Health to their respective shareholders in
terms of section 90 of the Companies Act and section 46 of the Income
Tax Act on or about Monday, 23 August 2010. This will exclude the
Health ordinary shares now held by Subco as described in step 6 above.
Pursuant to the Unbundling, Brimstone Shareholders will receive 40
Health ordinary shares for every 100 Brimstone shares held and as a
result Brimstone will unbundle a 35.27% stake in Health (representing
a 9.38% stake in Life Healthcare) to Brimstone Shareholders.
5. Rationale for the Restructure and the Unbundling
The Restructure and the Unbundling will result in Brimstone Shareholders
directly holding Health ordinary shares, while retaining their existing
shareholdings in Brimstone, the value of which will adjust accordingly.
These Health ordinary shares will trade on the JSE with reference to the
underlying see-through value of Health`s 26.60% stake in Life Healthcare.
This could potentially unlock significant value for Brimstone Shareholders
and allows Brimstone Shareholders to trade their indirect interest in Life
Healthcare separately to their Brimstone shares.
6. Unbundling ratios and the lock-up period
Brimstone will distribute the Health distribution shares to its
shareholders by way of a distribution in specie and a reduction in
Brimstone`s reserves in terms of section 90 of the Companies Act and
section 46 of the Income Tax Act.
Brimstone Shareholders will receive 40 Health ordinary shares for every 100
Brimstone shares held on the Record Date.
In line with the lock-up period, being the period ending 180 days from the
date of the Life Listing during which time the holders of Life Healthcare
shares as represented on the share register of Life Healthcare on the date
the Memorandum of Understanding, an agreement entered into on Thursday, 4
March 2010, as subsequently amended and reinstated, that governed the Life
Listing process ("MOU") was signed ("Old Life Healthcare Shareholders") are
prohibited, in terms of, inter alia, the MOU, from disposing of Life
Healthcare ordinary shares other than as part of the Life Listing ("Lock-up
Period"), Brimstone Shareholders holding 56.70% of the Brimstone ordinary
shares in issue and 51.95% of the Brimstone N ordinary shares in issue have
undertaken not to dispose of their Health shares for a period of
approximately 180 days after the Life Listing. The remaining Brimstone
Shareholders can trade freely in their Health ordinary shares.
Following the expiry of the Lock-up Period, it is the intention of the
directors of Health to unbundle the underlying Life Healthcare ordinary
shares to Health Shareholders.
7. Conditions precedent to the Share Exchange and the Unbundling
7.1 Conditions precedent to the Share Exchange
By no later than 5 August 2010:
7.1.1.1 The special resolutions set out in the notice of general
meeting attached to this circular, authorising the Share
Exchange and the Unbundling, shall have been passed by a 75%
majority of the votes of Brimstone Shareholders and shall
have been registered at the Companies and Intellectual
Property Registrations Office in Pretoria;
7.1.1.2 The shareholders of Mvelaphanda shall have authorised, in
terms of section 228 of the Act, the Unbundling, by a
special resolution, and such resolution shall have been
registered at the Companies and Intellectual Property
Registrations Office in Pretoria;
7.1.1.3 The transactions contemplated in paragraph 2 and 4.1 above
shall have been validly implemented by the applicable
parties thereto (having obtained all requisite shareholder,
board and/or regulatory approvals);
7.1.1.4 The shareholder resolutions necessary to give effect to
steps 1 to 9 set out in paragraph 4 above, being resolutions
of the shareholder/s of Health, being Mvelaphanda; Newshelf
778, being Brimstone; Bidco 813, being Bidco 931; and Bidco
931, being Newshelf 778 and Health, shall have been passed
and, if applicable, shall have been registered with the
Companies and Intellectual Property Registrations Office in
Pretoria;
7.1.1.5 The JSE shall have approved the Health Listing;
7.1.1.6 Brimstone being satisfied with the results of its due
diligence investigation of Health; and
7.1.1.7 Mvelaphanda being satisfied with its due diligence
investigation of Newshelf 778.
7.2 Condition precedent to the Unbundling
By no later than 05 August 2010, Step 1 to Step 7 of the Restructure
(which includes the Share Exchange) set out in paragraph 4 above shall
have been validly implemented by the applicable parties thereto
(having obtained all requisite shareholder, board and/or regulatory
approvals).
8. Pro forma financial effects of the Buybacks, the Restructure and the
Unbundling
Based on Brimstone`s published consolidated audited results for the
financial year ended 31 December 2009, the pro forma financial effects of
the Buybacks, the Restructure and the Unbundling on Brimstone`s earnings
per share ("EPS"), headline earnings per share ("HEPS"), net asset value
("NAV") and tangible net asset value ("TNAV") are set out below. These
financial effects are prepared for illustrative purposes only in order to
assist Brimstone shareholders to assess the impact of the Buybacks, the
Restructure and the Unbundling, and, because of their nature, may not give
a fair presentation of Brimstone`s financial position after the Buybacks,
the Restructure and the Unbundling nor the effect thereof on Brimstone`s
future earnings. The financial effects are the responsibility of the board.
The material assumptions used in the preparation of the financial effects
are set out in the notes following the table.
The pro forma financial effects represented here are different to those
presented in the circular to Brimstone shareholders dated Friday, 23 April
2010 due to the use of the Life bookbuild price of R13.50 per Life
Healthcare ordinary share in this announcement as opposed to the carrying
value of Life Healthcare at 31 December 2009 used in the SENS announcement
on Friday, 23 April 2010. The pro forma financial effects assumes the Life
Overallotment option is fully exercised (and included as part of the
Buybacks pro forma financial effects) and that the Joint Bookrunners make
use of the full 0.84% of Life Healthcare ordinary shares available to them
from Newshelf 831 in terms of the Life Overallotment.
Before the After the After the % change
Buybacks Buybacks, but Restructure
before the and
Restructure Unbundling
and the
Unbundling
EPS (cents) 136.7 248.7 300.6 119.9%
HEPS (cents) 130.9 242.9 294.8 125.2%
NAV (cents) 1,030.3 1,147.2 671.5 (34.8%)
TNAV (cents) 922.1 1,039.0 563.2 (38.9%)
Number of shares in 239,324 239,324 239,324 -
issue (`000)
Weighted average 238,238 238,238 238,238 -
number of shares in
issue (`000)
Notes relating to the Buybacks:
1. The "Before the Buybacks" information has been extracted, without
adjustment, from Brimstone`s consolidated audited historical financial
information for the 12 months ended 31 December 2009.
2. These pro forma financial effects include the effect of the Life
Overallotment in the Buybacks, assuming the full allotment is
requested by the Joint Bookrunners.
3. The pro forma financial effects of the Buybacks are based on the
assumption that Brimstone disposes of an effective 6.85% of Life
Healthcare through the Buybacks and the Life Overallotment. Part of
this will be as cash received from the Newshelf 831 Buyback, the
Newshelf 778 Buyback and the Life Overallotment, and the remaining
cash will be received as a dividend of R180m from Bidco 931. Prior to
the Buybacks, Brimstone held 21.65% of Life Healthcare as a fair value
investment through profit or loss. After the Buybacks and the Life
Overallotment, Brimstone will have decreased its effective interest in
Life Healthcare to 14.80% (non-recurring). The remaining investment in
Life Healthcare will continue to be accounted for as a fair value
investment through profit or loss.
4. The Buybacks and the Unbundling and Restructure have been calculated
using the Life bookbuild price which equates to a valuation of R3,046m
for Brimstone`s 21.65% investment in Life Healthcare at 31 December
2009.
5. The gross Buybacks of R897m, received as:
- a cash dividend by Brimstone through the Newshelf 778 Buybacks of
R414m (net of STC, non-recurring);
- a cash dividend by Brimstone from Bidco 913 of R180m (net of STC,
non-recurring);
- a cash dividend by Brimstone through the Newshelf 831 Buyback of
R114.8m (net of STC, non-recurring);
- proceeds received by Brimstone through the Life Overallotment of
R104.3m (net of STC, non-recurring);
- STC on the above totalling R70.9m and CGT on the Life
Overallotment of R13.4m (non-recurring).
6. The EPS and HEPS figures as reflected in the "After the Buybacks but
before the Restructure and Unbundling" column are based on the
assumption that the Buybacks were implemented on 1 January 2009 for
the purposes of the statement of comprehensive income.
7. The EPS and HEPS figures were adjusted for the after tax effect (where
applicable) of:
a. An impairment of the investment in Life Healthcare due to the STC
incurred on the Buybacks and not received as cash of R70.9m (non-
recurring) and the maximum CGT on the overall Life Overallotment
of R13.5m.
b. A reduction in the amount of dividends received over the period
by Brimstone from Life Healthcare amounting to R38.5m
(recurring), and the resultant increase in the tax charge of
R3.8m (recurring).
c. An additional fair value gain on the investment in Life
Healthcare of R223.4m is recorded for the period, valued using
the Life bookbuild price.
d. A reduction in finance costs of R29.4m due to the settlement of
long-term funding (see note 10, below)(recurring);
e. A reduction in taxation primarily through the release of R128.4m
of deferred tax that was over-provided for on Brimstone`s
investment in Life Healthcare including the reduction in the
deferred tax liability due to the recognition of the STC credit
referred to in note 5 (above) of R70.9m (non-recurring).
f. transaction costs specific to the Buybacks of R30.4m (non-
recurring) which are non-deductible for income tax purposes.
8. The NAV and TNAV figures as reflected in the "After the Buybacks but
before the Restructure and Unbundling" column are based on the
assumption that the Buybacks were implemented on 31 December 2009 for
the purposes of the statement of financial position.
9. The NAV and TNAV figures were adjusted for the after tax effect (where
applicable) of:
a. an additional fair value gain on the investment in Life
Healthcare of R223.4m is recorded for the period, valued using
the Life bookbuild price.
b. transaction costs specific to the Buybacks of R30.4m (non-
recurring) which are non-deductible for income tax purposes.
c. a reduction in taxation through the release of R128.4m of
deferred tax that was previously provided for on Brimstone`s
investment in Life Healthcare and a corresponding decrease in the
deferred tax liability due to the recognition of the STC credit
referred to in note 5 (above) of R70.9m (non-recurring).
10 It has been assumed that Brimstone will utilise any cash proceeds or
STC credits received from the Buybacks to settle any long-term funding
in Newshelf 778 held against the investments in Life Healthcare, to
the extent possible.
Notes relating to the Restructure and the Unbundling:
11. The pro forma financial effects of the Restructure and the Unbundling
are based on the assumption that Brimstone disposes of an effective
9.38% of Life Healthcare through the Restructure and the Unbundling.
Immediately after the Buybacks, Newshelf 778 will retain a 12.36%
interest in Life Healthcare. 1.84% of this interest in Life Healthcare
will be transferred to another Brimstone subsidiary, Subco, leaving
Newshelf 778 with a 10.52% interest in Life Healthcare. This stake
will be unbundled to all Brimstone shareholders, including the
Treasury shares holding of 10.83% of Brimstone`s ordinary and N
ordinary shares. As a result, the net amount of shares disposed
through the Unbundling will be approximately 9.38%. Brimstone will
retain the remaining 1.84% of Life Healthcare through Subco.
12. The Buybacks and the Unbundling and Restructuring have been calculated
using the Life bookbuild price which equates to a valuation of R3,046m
for Brimstone`s 21.65% investment in Life Healthcare at 31 December
2009.
13. The EPS and HEPS figures as reflected in the "After the Unbundling"
column are based on the assumption that the Unbundling was implemented
on 1 January 2009 for the purposes of the statement of comprehensive
income.
14. The EPS and HEPS figures were adjusted for the after tax effect (where
applicable) of:
a. a reduction in the amount of dividends received over the period
by Brimstone from Life Healthcare amounting to R52.7m
(recurring), and the resultant decrease in the tax charge of
R5.3m (recurring).
b. transaction costs of R3.2m (non-recurring) which are non-
deductible for income tax purposes.
c. a reduction in taxation through the release of R185m of deferred
tax that was previously provided for on Brimstone`s investment in
Life Healthcare that is to be unbundled in terms of the
unbundling (non-recurring).
15. The NAV and TNAV figures as reflected in the "After the Restructure
and Unbundling" column are based on the assumption that the
Restructure and the Unbundling were implemented on 31 December 2009
for the purposes of the statement of financial position.
16. The NAV and TNAV figures were adjusted for the after tax effect (where
applicable) of:
a. the disposal of 9.38% of Life Healthcare to Brimstone shareholders
through the Unbundling valued at R1,320m (non-recurring); and
b. transaction costs of R3.2m as detailed, which are non-deductible for
income tax purposes (non-recurring);
c. a reduction in taxation through the release of R185m of deferred tax
that was previously provided for on Brimstone`s investment in Life
Healthcare that is to be unbundled in terms of the unbundling (non-
recurring).
9. Action required by Brimstone shareholders
In terms of the JSE Listings Requirements, the Restructure and the
Unbundling will be categorised as a Category 1 transaction. Furthermore,
the Restructure and the Unbundling are also classified as a Section 228
Disposal in terms of the Companies Act and these transactions accordingly
require approval from the Securities Regulation Panel, established in terms
of section 440B of the Companies Act.
A circular will be posted in due course to Brimstone shareholders providing
information on the Restructure and the Unbundling ("the circular"), and
incorporating a notice convening a general meeting of Brimstone
shareholders. The Health PLS will be posted together with the circular.
The circular will also be available on Brimstone`s website after it is
posted at: www.brimstone.co.za/circulars.htm
10. Salient dates and times
2010
Terms announcement released on SENS on Tuesday, 22 June
Terms announcement published in the South Wednesday, 23 June
African press on
Circular posted to Brimstone Shareholders Monday, 28 June
on
Distribution of Health pre-listing Monday, 28 June
statement to Brimstone Shareholders on
Forms of proxy (yellow) for the general Friday, 16 July
meeting to be received by 10h00 on
General meeting held at 10h00 on Tuesday, 20 July
Results of the general meeting announced Tuesday, 20 July
on SENS on
Results of the general meeting published Wednesday, 21 July
in the South African press on
Finalisation announcement released by no Thursday, 5 August
later than
Last day to trade in Brimstone shares on Friday, 13 August
the JSE to participate in the Unbundling
Listing of Health from the commencement Monday, 16 August
of business on
Brimstone shares trade ex the entitlement Monday, 16 August
to the Health distribution shares on
Announcement of the specified ratio in Wednesday, 18
respect of the apportionment of the August
costs/base costs of Health for
taxation/CGT purposes released on SENS on
Announcement of the specified ratio in Thursday, 19
respect of the apportionment of the August
costs/base costs of Health for
taxation/CGT purposes published in the
South African press on
Record date to participate in the Friday, 20 August
Unbundling on
Health distribution shares Unbundled to Monday, 23 August
Brimstone Shareholders
Health share certificates will be posted Monday, 23 August
by registered post, at the risk of the
Brimstone certificated shareholder
concerned, to Brimstone certificated
shareholders and Brimstone dematerialised
shareholders will have their accounts at
the CSDP or broker updated on
Note:
1. All times shown in this circular are South African times.
2. The above dates and times are subject to amendment. Any such
amendment will be announced on SENS and published in the South African
press.
3. Brimstone shares may not be dematerialised or rematerialised between
Monday, 16 August 2010 and Friday, 20 August 2010, both days
inclusive.
11. Irrevocable letters of undertaking
Brimstone directors and other Brimstone shareholders, who collectively hold
approximately 52% of the Brimstone voting rights, have provided irrevocable
letters of undertaking to vote in favour of the resolutions necessary to
approve the Restructure and the Unbundling at the general meeting.
12. Withdrawal of cautionary announcement
Brimstone shareholders are referred to the cautionary announcement dated
Monday, 8 March 2010 and the renewal of cautionary announcements dated
Friday, 23 April 2010 and Tuesday, 18 May 2010 and are advised that they
are no longer required to exercise caution when dealing in Brimstone
shares.
Cape Town
22 June 2010
Investment bank and sponsor Legal advisers
Nedbank Capital Edward Nathan Sonnenbergs
Independent reporting accountants Transaction communications advisor
Deloitte & Touche College Hill
Independent sponsor Structuring adviser
Deutsche Securities Rand Merchant Bank
Date: 22/06/2010 07:18:01 Produced by the JSE SENS Department.
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