| Fri 4 Mar 2011, 16:40 | | ITR - Intertrading Limited - Proposed acquisition of a 60% shareholding in |
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ITR
ITR
ITR - Intertrading Limited - Proposed acquisition of a 60% shareholding in
Connectnet Broadband Wireless (PROPRIETARY) Limited and cautionary announcement
INTERTRADING LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004777/06)
Share code ITR ISIN ZAE000015566
("Intertrading" or "the company")
PROPOSED ACQUISITION OF A 60% SHAREHOLDING IN CONNECTNET BROADBAND WIRELESS
(PROPRIETARY) LIMITED
CAUTIONARY ANNOUCEMENT
1. Introduction
Shareholders are referred to the SENS announcement released by the JSE Limited
("JSE") on 11 November 2010 informing shareholders of the suspension of
Intertrading in terms of 3.26 of the Listings Requirements.
The purpose of this announcement is to inform shareholders about the Proposed
Acquisition referred to below which, if all the requirements are met, will
result in Intertrading retaining its listing on the JSE and becoming a
technology focused company.
2. The Proposed Acquisition
On 1 February 2011 Encha Tech (Proprietary) Limited ("Encha") offered to
purchase 150 ordinary shares representing 60% of the issued share capital of
ConnectNet Broadband Wireless (Proprietary) Limited ("ConnectNet") from Fast
Communication Systems (Proprietary) Limited ("FastComm") for a cash
consideration of R45,6 million ("the Offer") which Offer has been accepted by
FastComm.
In terms of the Offer, Encha is entitled to cede and transfer all of its rights
and obligations to its holding company or its subsidiary company or other
nominee ("the Encha nominee") provided that Encha shall guarantee the
performance of the obligations of the Encha Nominee.
On 21 February 2011, Intertrading accepted a proposal from Encha to assume
Encha`s rights and obligations in terms of the Offer ("the Proposed
Acquisition") and thereby acquire 60% of ConnectNet through the issue of
ordinary Intertrading shares to FastComm at a price of 15 cents per share.
On 22 February 2011, Encha notified FastComm in writing of its election to cede
its rights in terms of the Offer to Intertrading which election was accepted by
FastComm.
3. Encha Subscription
Encha has entered into an agreement with FastComm in terms of which Encha will
acquire all Intertading shares issued to FastComm at a price of 15 cents per
share (the "Encha subscription").
Furthermore, Encha has undertaken to subscribe and/or to cause to be subscribed
for as many new ordinary shares in Intertrading as may be necessary to ensure
that Intertrading complies with clause 4.28(c) of the JSE Listings Requirements
of having a subscribed share capital post the Proposed Acquisition of not less
than R25 million.
4. The business of Encha
Encha is owned by Encha Group Limited, an investment holding company with
interests in mineral exploration, industrial, technology and property assets.
Encha Group is controlled by the Moseneke family.
5. The business of ConnectNet
Connectnet Broadband Wireless (Proprietary) Limited is a provider of value-added
wireless data services for business-to-business and machine-to-machine
applications. Established in 2004, ConnectNet is a leader in GSM Data
(GPRS/EDGE/3G/HSDPA/HSUPA) service provision, with blue chip clients in the
retail, financial, security, telemetry, healthcare and pharmaceutical sectors.
6. Rationale for the Proposed Acquisition
The rationale for the Proposed Acquisition is to lift the suspension of trading
in Intertrading. It has always been the intention of the board of Intertrading
to find a suitable acquisition. The Proposed Acquisition gives shareholders
exposure to an exciting technology company or the opportunity to accept the
mandatory offer as mentioned in paragraph 8 below.
It is the intention of Encha Group Limited to pursue its technology interests
through Intertrading and to grow a substantial listed technology group by way of
acquisition and organic growth. It is optimal for Encha to achieve its
aggressive growth plans via a listed entity, enabling it to access the capital
raising opportunities presented by a JSE listing and to ensure the growth of the
group with other investors. The Proposed Acquisition provides the first step in
such a strategy.
It is proposed that the existing Board of Intertrading will appoint a new Board
to be nominated by Encha and the current Board members will tender their
resignations.
This will enable the new board members to pursue and bed down the Proposed
Acquisition in the short term, and to set the strategy for the new technology
company.
7. Conditions precedent
The Proposed Acquisition is subject to the fulfillment of inter alia, the
following conditions precedent:
- Intertrading having obtained all regulatory approval, including, but not
limited to, the approval of the Securities and Regulation Panel("SRP") and the
JSE;
- the shareholders of Intertrading passing in a general meeting such resolutions
as may be necessary for the proposed acquisition.
8. Change of control and mandatory offer
The Encha subscription will constitute a change in control, an "affected
transaction" in terms of the SRP Code.
Accordingly, Encha will make a mandatory offer at a price of 15 cents per share
to all shareholders of Intertrading.
9. Financial effects
The financial effects of the Proposed Acquisition have not yet been determined
and will be announced in due course.
10. Cautionary announcement and further documentation
Shareholders are advised that once the final agreements and financial effects
relating to the Proposed Acquisition have been finalised, a detailed terms
announcement will be released on SENS and published in the press. Shareholders
are accordingly advised to exercise caution when dealing in the company`s
securities until a further announcement is made.
A circular to shareholders containing the requisite information pertaining to
the Proposed Acquisition and convening a meeting of shareholders will be posted
to shareholders in due course.
4 March 2011
Waverley, Johannesburg
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Date: 04/03/2011 16:40:01 Produced by the JSE SENS Department.
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