| Wed 29 Dec 2010, 10:36 | | OLI - O-line Holdings Limited - Terms announcement relating to a specific share |
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OLI
OLI
OLI - O-line Holdings Limited - Terms announcement relating to a specific share
repurchase
O-line Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/034685/06)
Share code: OLI
ISIN: ZAE000110730
("O-line" or "the Company")
TERMS ANNOUNCEMENT RELATING TO A SPECIFIC SHARE REPURCHASE OF APPROXIMATELY 10%
OF O-LINE`S SHARES IN ISSUE BY WAY OF SET OFF AGAINST ARMCO MANAGEMENT`S LOAN
ACCOUNTS
1. SPECIFIC REPURCHASE OF SHARES
1.1. BACKGROUND
Shareholders are referred to the cautionary announcement released on SENS on 20
December 2010, and are informed that it related to the specific repurchase of
shares as set out in this announcement.
As part of the acquisition of the Armco group of companies ("ARMCO") by the
Company from Steelwood Africa (Pty) Limited ("Steelwood") with effect from 1
July 2008, ARMCO management acquired 25 076 250 O-line shares ("the Buy Back
Shares") as set out in more detail in the O-line circular to shareholders dated
6 November 2008(the "Circular").
The acquisition of the Buy Back Shares was originally funded through a loan
advanced by Steelwood that was subsequently refinanced by O-line on the terms
and conditions set forth in the O-line loan, pledge and session agreement ("the
O-line Loan Agreement")as set in more detail in the Circular.
Due to the interest charge on the loan advances as set forth in the O-line Loan
Agreement and historic poor market conditions ARMCO management requested that
the Company buy back the Buy Back Shares at the face value of the loan accounts
after taking into account the dividend declared by O-line in the dividend
announcement dated 17 December 2010. Therefore it is proposed, subject to
shareholder approval, that O-line buy back 21 196 250 O-line shares, at a price
of R 1.10 per O-line share, and 3 880 000 O-line shares, at a price of R 1.00
per O-line share, in full and final settlement of the outstanding loan account
in terms of the O-line Loan Agreement ("the Share Repurchase").
The Buy Back Shares are held ARMCO management and Andrew Dippenaar (he was a
member of ARMCO management at the time of the ARMCO transaction but subsequently
resigned when he immigrated to Australia) in the following ratio:
ARMCO management Incentive Shares Portion of loan
account
Dave Fensham 7 166 250 R7 875 236.31
Tom Loughran 4 455 000 R4 897 395.18
Nicholas Angelos 3 880 000 R4 280 317.27
Anthonie de Wit 3 730 000 R4 102 521.49
Anton Reddy 1 965 000 R2 158 703.64
Andrew Dippenaar* 3 880 000 R3 880 000.00
Total 25 076 250 R27,583,875.00
* Andrew Dippenaar has, subsequent to the ARMCO Transaction,
left the employment of ARMCO.
O-line signed share buy-back agreements with each of the above
members of ARMCO management on 22 December 2010.
1.2. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects of the Share Repurchase are presented
below. Such pro forma financial effects are the responsibility of the board of
directors of O-line and are presented for illustrative purposes only to provide
information on how the Share Repurchase may have impacted on the reported
financial information of the company if it had been implemented in the year
ended 30 June 2010. Because of their nature, the pro forma financial effects
may not give a fair indication of the company`s financial position at 30 June
2010 or its future earnings.
Before the After the Share %age change
Share Repurchase
Repurchase (ii)
(i)
Attributable earnings per 7.23 9.94 37.50
ordinary share for the year
ended 30 June 2010 (cents) (iii)
Headline earnings per ordinary 7.70 10.47 35.97
share for the year ended 30 June
2010 (cents) (iii)
Net asset value per ordinary 92.85 93.99 1.23
share at 30 June 2010 (cents)
(iv)
Net tangible asset value per 65.75 63.70 -3.12
ordinary share at 30 June 2010
(cents) (iv)
Weighted average number of 219 743 836 194 667 586 -11.41
ordinary shares in issue for the
period
Number of ordinary shares in 238 500 000 213 423 750 -10.51
issue at the end of the period
Notes:
i. The figures in this column are extracted from the audited annual financial
results of the company for the year ended 30 June 2010.
ii. The figures in this column are based on the figures set out in the previous
column, having adjusted for the effects of the Share Repurchase.
iii. For purposes of the pro forma attributable and headline earnings per
ordinary share it was assumed that the Share Repurchase was implemented and loan
settled with effect from 1 July 2009; and
iv. For purposes of net asset value and net tangible asset value per ordinary
share, it was assumed that the Share Repurchase was implemented and the loan
settled on 30 June 2010.
2. SHAREHOLDER APPROVAL AND FURTHER DOCUMENTATION
Shareholders are advised that the Share Repurchase constitutes a related party
transaction in terms of the JSE Listings Requirements and accordingly, the
implementation thereof is subject to shareholder approval, which will exclude
any of the related parties to the Share Repurchase voting on the Share
Repurchase resolution.
A circular setting out further details of the Share Repurchase described above
and containing independent advice regarding the fairness of the Share Repurchase
as well as a notice convening a general meeting to consider and vote on
resolutions relating to, inter alia, the Share Repurchase will be posted to
shareholders. An announcement confirming this date will be released in due
course.
3. WITHDRAWAL OF CAUTIONARY
Shareholders are advised that, in light of the information presented above,
there is no longer a need to exercise caution when dealing in the Company`s
shares.
29 December 2010
Selby
Designated Advisor
QuestCo Sponsors (Pty) Limited
Date: 29/12/2010 10:36:01 Produced by the JSE SENS Department.
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