| Fri 26 Nov 2010, 16:05 | | WEA - WG Wearne Limited - Financial effects of the disposal of Portland |
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WEA
WEA
WEA - WG Wearne Limited - Financial effects of the disposal of Portland,
extension of a suspensive condition and withdrawal of the cautionary
announcement
WG WEARNE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005983/06)
JSE code: WEA
ISIN: ZAE000078002
("Wearne" or "the company")
FINANCIAL EFFECTS OF THE DISPOSAL OF PORTLAND, EXTENSION OF A SUSPENSIVE
CONDITION AND WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Shareholders are referred to the announcement, dated 15 October 2010, relating
to the following disposals by Wearne in terms of:
* a sale of shares agreement with Anco Besigheids Trust ("Anco"), Willchrest
Besigheids Trust and Portland Readymix Trust (collectively "the vendors")
in terms of which 56 616 370 ordinary shares ("sale shares") in the company
held by the vendors will be returned to the company in exchange for the
entire issued share capital in Portland Holdings (Pty) Limited
("Portland"); and
* a sale of business enterprise agreement regarding the sale of the business
enterprise comprising Portion 8 of the Farm Hoogekraal No 1098, District of
Bellville, Cape Town ("the property") together with lease agreements with
Portland Hollowcore Slabs (Pty) Limited and Portland Readymix (Pty) Limited
regarding tenancy of portions of the property, to Scholgard (Pty) Limited
("Scholgard") for R30 million.
The transactions as contemplated in the abovementioned agreements are
indivisibly linked and are referred to as "the transaction" and the sale of
shares agreement and the sale of business enterprise agreement are referred to
as "the agreements".
UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The unaudited pro forma financial effects of the transaction, for which the
directors are responsible, are provided for illustrative purposes only to show
the effect of the transaction on loss per share ("LPS") and headline loss per
share ("HLPS") as if the transaction had taken effect on 1 March 2010 and on net
asset value per share ("NAVPS") and net tangible asset value per share
("NTAVPS") as if the transaction had taken effect on 31 August 2010. Because of
their nature, the unaudited pro forma financial effects may not give a fair
presentation of the group`s financial position and performance. The unaudited
pro forma financial effects have been compiled from the unaudited consolidated
financial results for the six months ended 31 August 2010 and are presented in a
manner consistent with the format and accounting policies adopted by Wearne and
have been adjusted as described in the notes below:
%
Before After change
LPS (cents) 1.3 27.3 2
000.0
HLPS (cents) 1.1 2.6 136.4
NAVPS (cents) 83.3 73.4 (11.9)
NTAVPS (cents) 74.9 73.4 (2.0)
Shares in issue at period end 250 092 193 475 (22.6)
(`000)
Weighted average number of shares
in issue (`000) 249 852 193 236 (22.7)
Notes:
1 The "Before" column has been extracted from the unaudited results of Wearne
for the six months ended 31 August 2010.
2 LPS and HLPS effects, as reflected in the "After" column are based on the
following assumptions and information:
- the transaction was effective 1 March 2010;
- the consolidated trading results of Portland and the property for the
six months ended 31 August 2010 were reversed;
- the cash proceeds of the disposal of the property of R30 million were
received, the 56 616 370 Wearne shares received and cancelled and
transaction costs of R0.6 million paid on 1 March 2010;
- R10 million of the disposal proceeds was utilised as working capital
and R20 million to settle interest-bearing debt, which debt would have
attracted interest at 11% per annum pre-tax, resulting in a reduced
finance cost;
- a loss on sale of Portland of R47 million was recognised, which loss
is excluded when calculating HLPS; and
- the interest saving and the reversal of the trading results of
Portland and the property referred to above will have a continuing
effect on Wearne. All other adjustments are once-off adjustments.
3 NAVPS and NTAVPS effects, as reflected in the "After" column are based on
the following assumptions and information:
- the transaction was effective 31 August 2010; and
- the disposal proceeds were received, the Wearne shares cancelled and
transaction costs paid on 31 August 2010 in the manner described in
note 2 above.
SUSPENSIVE CONDITION EXTENSION
The suspensive condition relating to Scholgard obtaining a loan on security of a
first mortgage bond over the property from a financial institution in the amount
of R30 million, together with a further loan of R3 million as working capital,
has been extended to 8 December 2010.
WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
Pursuant to the release of the financial effects of the transaction, the
cautionary announcement is hereby withdrawn.
Randburg
26 November 2010
Designated adviser
Vunani Corporate Finance
Date: 26/11/2010 16:05:01 Produced by the JSE SENS Department.
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