| Fri 5 Nov 2010, 9:53 | | DLG - Dialogue Group Holdings Limited - Disposal by Dialogue of its 51% interest |
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DLG
DLG
DLG - Dialogue Group Holdings Limited - Disposal by Dialogue of its 51% interest
in the ordinary share capital of Callforce Direct (Proprietary) Limited
("Callforce")
DIALOGUE GROUP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 2005/039219/06)
Share Code: DLG ISIN: ZAE000083820
("Dialogue" or "the Company" or "the Group")
DISPOSAL BY DIALOGUE OF ITS 51% INTEREST IN THE ORDINARY SHARE CAPITAL OF
CALLFORCE DIRECT (PROPRIETARY) LIMITED ("CALLFORCE")
1. THE DISPOSAL
1.1 Further to the renewal of the cautionary announcements released on
SENS, the last of which was dated 6 October 2010 ("the cautionary"),
shareholders are hereby advised that Dialogue has entered into an
agreement dated 2 November 2010 ("the Signature Date") ("the
Agreement") whereby, subject to the terms and conditions of the
Agreement, Dialogue will dispose of its 51% interest in the ordinary
share capital of CallForce, a subsidiary of Dialogue, to Ms Candice
Roberts ("the Purchaser") ("the Disposal"). The effective date of the
Disposal is the Signature Date.
1.2 CallForce is a call-centre recruitment specialist with offices in
Johannesburg, Cape Town and Durban.
2. RATIONALE FOR THE DISPOSAL
The board of directors believes the Disposal to be the correct action to
take in achieving its objective of maximising value for shareholders.
3. THE PURCHASE CONSIDERATION
3.1. The consideration payable in respect of the Disposal amounts to R2.09
million ("the Purchase Consideration").
3.2 The Purchaser has paid to Dialogue an amount of R1.03 million in
respect of the Purchase Consideration. The balance, amounting to R1.06
million, will be settled in cash by the end of November 2010.
3.3 The board of directors of Dialogue will determine, depending on the
needs of the Company, the optimum utilisation of the proceeds of the
Disposal in due course.
4. FINANCIAL EFFECTS
4.1 The table below sets out the unaudited pro forma financial effects on
Dialogue before and after the Disposal and are the responsibility of
the Company`s directors. The pro forma financial effects have been
prepared for illustrative purposes only to show how the Disposal may
have affected Dialogue`s results for the six months ended 30 June
2010, based on the assumptions that:
4.1.1 for purposes of the earnings and headline earnings per share
calculations, the Disposal was effective from 1 January
2010; and
4.1.2 for purposes of the net asset value and net tangible asset
value per share calculations, the Disposal was effected on
30 June 2010.
4.2 It should be noted that the unaudited pro forma financial effects have
been prepared on Dialogue`s latest unaudited results for the six
months ended 30 June 2010 taking into consideration the Disposal, and
because of their nature, may not fairly reflect Dialogue`s financial
performance and position after the Disposal.
Unaudited(1) Pro forma Change
Before the After the
Disposal Disposal
(cents) (cents)
Earnings per share(3) 12.4 11.8 (4.8%)
Headline earnings per share(3) 1.1 0.5 (54.5%)
Net asset value per share(4) 26.3 25.9 (1.5%)
Net tangible asset value per 10.4 10.6 1.9%
share(4)
Notes
1. Extracted from the published unaudited interim financial statements of
Dialogue for the six months ended 30 June 2010.
2. Adjustments reflect the once-off effects of the Disposal, namely:
R2.09 million (comprising the Purchase Consideration), R1.26 million
recovered against outstanding shareholder loans owed by CallForce and
its subsidiaries ("the shareholder loans") and interest adjusted for a
before-tax return of 5.6% on the Purchase Consideration and cash
recovered against the shareholder loans.
3. Calculation based on a weighted average of 299 074 619 shares in issue
during the six months ended 30 June 2010.
4. Calculation based on 299 074 619 shares in issue at 30 June 2010.
5. No taxation was provided for on the Disposal due to an assessed loss
in Dialogue.
6. There were no additional transaction costs.
5. OTHER PROVISIONS OF THE AGREEMENT
5.1 In terms of the Agreement, all the directors of CallForce, who had
been appointed as such by Dialogue by virtue of its shareholding in
CallForce, have tendered their resignations, save for one director who
shall remain on the board of CallForce, and who shall deliver his
written resignation to CallForce once Dialogue and the Purchaser have
discharged their joint obligations as set out in paragraph 5.3 below.
5.2 The Purchaser agreed to settle Dialogue`s claims in respect of loans
to CallForce and its subsidiaries for an amount of R1.26 million.
5.3 Dialogue and the Purchaser have undertaken to use their reasonable
commercial endeavours to procure Dialogue`s release from the
suretyship signed by Dialogue in favour of Standard Bank in respect of
the debts of CallForce and its subsidiaries, which suretyship amounts
to a maximum value of R5.15 million.
6. DOCUMENTATION AND CATEGORISATION
In terms of the Listings Requirements of the JSE Limited ("the Listings
Requirements"), the Disposal is deemed to be a Category 2 transaction, and
does therefore not require shareholder approval.
The Disposal is a related party transaction in terms of the Listings
Requirements as Ms Candice Roberts was the minority shareholder in
CallForce. However, due to the Purchase Consideration falling below the
required thresholds in terms of the Listings Requirements, shareholder
approval and/or a fairness opinion will not be required.
7. CAUTIONARY
Shareholders of Dialogue are advised that the cautionary has now been
withdrawn.
Johannesburg
5 November 2010
Designated Adviser: PSG Capital (Proprietary) Limited
Date: 05/11/2010 09:53:01 Produced by the JSE SENS Department.
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