| Mon 16 Aug 2010, 17:02 | | MZR - Mazor Group Limited - Company announcement |
|
MZR
MZR
MZR - Mazor Group Limited - Company announcement
Mazor Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2007/017221/06)
Share code: MZR ISIN: ZAE000109823
("Mazor" or "the Company")
THE PROPOSED PROVISION OF FINANCIAL ASSISTANCE TO CLOUDBERRY INVESTMENTS 18
(PTY) LIMITED IN ORDER TO MAINTAIN ITS BLACK ECONOMIC EMPOWERMENT ("BEE")
CREDENTIALS
1. Introduction
On 22 November 2007, Doba Judith Mazor and Shlomo Mazor, the founding
shareholders of Mazor, entered into an agreement with a BEE investor,
Cloudberry Investments 18 (Pty) Limited ("Cloudberry Investments") in
terms of which Cloudberry Investments acquired 18 million Mazor ordinary
shares at R3.23 per share being a total consideration of R58.14 million
("the acquisition consideration"). The acquisition consideration was
partly funded by Nedbank Limited ("Nedbank"). Cloudberry Investments has
since entered into a new funding arrangement with FirstRand Bank Limited
("FNB") to settle the outstanding loan with Nedbank.
2. The transaction
In light of the current market volatility and its effect on the market
value of securities, and in order for Mazor to retain its BEE
credentials, the Mazor board agreed, subject to statutory and regulatory
requirements, to the provision of a suretyship and cession to FNB in
respect of a maximum amount of R20 million ("the transaction").
3. Salient terms of the transaction
FNB has granted a loan facility to Cloudberry Investments of R42 million
for a period of 2 years from the disbursement date at an interest rate of
prime less 50 basis points. FNB requires security from the shareholders
of Cloudberry Investments in the form of suretyships to the value of R42
million as well as the cession and pledge of 18 million Mazor shares
held by Cloudberry Investments as well as a suretyship and cession of R20
million from Mazor.
Furthermore, should the Mazor share price on the JSE close below R2 for
five consecutive days, FNB may require Cloudberry Investments to provide
additional security to FNB`s reasonable satisfaction. If the additional
security is not provided FNB is entitled to demand that Cloudberry
Investments shareholders purchase the pledged Mazor shares from
Cloudberry Investments to settle the outstanding balance on the loan.
In the event of default, FNB has agreed to first offer the pledged shares
to Mazor for an amount equal to the then outstanding balance of the loan.
4. Rationale for the transaction
The directors believe that the transaction is in the best interest of
Mazor as this will allow the Company to maintain its BEE credentials. As
a significant player in the construction sector, the BEE credentials are
prudent in the future growth and success of the Company.
5. Conditions precedent
The implementation of the transaction is subject to approval by the JSE
and Mazor shareholders at a general meeting.
6. Pro forma financial effects of the transaction
The pro forma financial effects of the transaction on Mazor earnings,
headline earnings, net asset value and net tangible asset value per share
are, in terms of IAS39 Financial Instruments: Recognition and
Measurement, less than 3% and therefore have not been presented.
7. Regulatory approvals
In terms of section 226 of the Companies Act, the transaction requires
Mazor shareholder approval of a special resolution necessary to give
effect to the provision of financial assistance.
Given that Cloudberry Investments currently holds more than 10% of the
vote and has a director, Abubaker Varachhia, serving on the Mazor board,
Cloudberry Investments is classified as a related party in terms of the
Listings Requirements, accordingly will not be entitled to vote at the
general meeting. In compliance with the Listings Requirements, the board
of Mazor will appoint an Independent Professional Expert to provide a
fairness opinion on the transaction.
8. Circular to shareholders
A circular to shareholders setting out full details of the transaction
and incorporating the notice of the general meeting and form of proxy
will be distributed to shareholders within 28 days from the date of this
announcement.
Cape Town
16 August 2010
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 16/08/2010 17:02:03 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
