| Tue 5 Apr 2011, 11:45 | | VUN - Vunani Limited - Sale of Vunani`s Ordinary Shareholding and Preference |
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VUN
VUN
VUN - Vunani Limited - Sale of Vunani`s Ordinary Shareholding and Preference
Shareholding in Rapicorp 59 (Pty) Ltd ("Rapicorp 59")
VUNANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
JSE code: VUN
ISIN: ZAE000110359
("Vunani")
SALE OF VUNANI`S ORDINARY SHAREHOLDING AND PREFERENCE SHAREHOLDING IN RAPICORP
59 (PTY) LTD ("RAPICORP 59")
BACKGROUND
On 27 July 2006 Vunani concluded an agreement with Peregrine Holdings Limited
("Peregrine") to establish and lead a broad based black economic empowerment
consortium to acquire an equity stake in Peregrine.
The transaction was concluded on 23 October 2006 wherein Rapicorp 59 acquired 15
027 210 shares in Peregrine at an average price of R6.50 per share. This
shareholding represented approximately 7,5% of Peregrine`s issued ordinary
shares at the time.
Vunani Capital (Pty) Ltd. ("Vunani Capital"), a wholly owned subsidiary of
Vunani, owns 100% of the ordinary shares in Rapicorp 59 as well as 19 500 B
class redeemable cumulative participating preference shares.
Funding for Rapicorp 59 was arranged from Absa Bank Limited ("Absa Bank")
through a subscription of 81 500 A class redeemable cumulative participating
preference shares in Rapicorp 59 ("A class prefs") for an amount of R81 500 000
(eighty one million five hundred thousand rand) and from Vunani Capital through
a subscription of 19 500 B class redeemable cumulative participating preference
shares in Rapicorp 59 ("B class prefs") for an amount of R19 500 000 (nineteen
million five hundred thousand rand).
Of the amount invested by Vunani Capital into Rapicorp 59, funding of R12 000
000 (twelve million rand) was arranged through an issue by Vunani Capital of 12
000 redeemable cumulative preference shares to Absa Bank ("the Absa prefs").
SALE OF RAPICORP 59
During recent discussions with Peregrine and Absa Bank it became apparent that
an opportunity existed to refinance the funding provided to Rapicorp 59 and
concurrently to facilitate a long term and sustainable BEE ownership structure
for Peregrine.
These discussions have culminated in a series of related and conditional
agreements being entered into by Vunani Capital, Absa Bank, Rapicorp 59 and
Windfall 52 Properties (Pty) Ltd. ("Windfall"), (a new BEE company established
and majority owned by the Peregrine Education Trust, the Peregrine Community
Development Trust and a Peregrine Employee Trust) dated 31 March 2011, whereby,
inter alia, Vunani Capital shall dispose of its ordinary shares in Rapicorp 59
to Windfall and Rapicorp 59 shall arrange third party funding to redeem both the
A class prefs and the B class prefs.
The effect of the above is that Vunani Capital shall receive an amount of R39
000 0000 (thirty nine million rand) ("the total consideration") which has been
broken down as follows:
* Windfall shall acquire Vunani Capital`s shareholding in Rapicorp 59
for R15 000 000 (fifteen million rand) ("the ordinary share
transaction"); and
* Rapicorp 59 shall redeem the B class prefs for an amount of R24 000
000 (twenty four million rand) ("the B class prefs transaction").
Vunani Capital shall in turn redeem the Absa prefs for an amount of R14 000 000
(fourteen million rand). Therefore, the net consideration that shall be
received by Vunani, after redeeming the Absa prefs, is an amount of R25 000 000
(twenty five million). The transaction will result in Vunani reducing its
overall gearing and bolster cash available to operations.
TRANSACTION RATIONALE
The transaction set out in this announcement allows all the relevant parties to
meet their immediate and longer term objectives. In this regard,
* Absa Bank shall unwind the funding that it provided to Rapicorp 59
* Peregrine shall be in a position to introduce and structure a
sustainable long term BEE partner
* Vunani shall unlock value from its investment in Peregrine thereby
providing a capital injection to strengthen its core operations
Vunani would like to wish Peregrine all the best in its future endeavours as
this chapter in the long relationship between the companies comes to an end and
looks forward to working together on a different level, as Peregrine continues
to hold a significant interest in Vunani Fund Managers (Proprietary) Limited.
Vunani would also like to take this opportunity to thank Absa Bank for all its
support and its partnership over the past five years. Vunani will continue to
have an ongoing relationship with the bank at a shareholding, funding and
operational level.
EFFECTIVE DATE, CLOSING DATE AND CONDITIONS PRECEDENT
The effective date of the ordinary share transaction is 31 March 2011 and the
closing date shall be seven days after fulfilment of the conditions precedent.
The remaining substantive outstanding conditions that must be met before 15
April 2011 (or such later date as the parties may agree in writing) are:
* An agreement between Absa and Rapicorp 59 on the redemption of the A
class prefs; and
* Rapicorp 59 finalising the necessary funding to enable it to redeem
the A class prefs and the B class prefs
FINANCIAL EFFECTS
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"), headline loss per share
("HLPS"), diluted loss per share ("DLPS") and diluted headline loss per share
("DHLPS") as if the transaction had taken effect on 1 January 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 December 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 reviewed consolidated
financial results for the year ended 31 December 2010 and are presented in a
manner consistent with the format and accounting policies adopted by Vunani and
have been adjusted as described in the notes below:
%
Before After Change
LPS (cents) (2.5) (2.3) 8%
DLPS (cents) (2.5) (2.3) 8%
HLPS (cents) (3.0) (2.8) 6.7%
DHLPS (cents) (3.0) (2.8) 6.7%
NAVPS (cents) 5.1 5.2 2%
NTAVPS (cents) 4.0 4.1 2.5%
Shares in issue at period end (`000) 4 763 502 4 763 502 0%
Weighted average number of shares in 4 282 465 4 282 465 0%
issue (`000)
Notes:
1 The "Before" column has been extracted from the reviewed results of Vunani
for the year ended 31 December 2010.
2 LPS, HLPS, DLPS and DHLPS effects, as reflected in the "After" column are
based on the following assumptions and information:
i The transaction was effective 1 January 2010.
ii The total loss attributable to Rapicorp 59 in Vunani`s statement
of comprehensive income amounted to R5.5 million. As it is
assumed that the transaction was effective 1 January 2010, this
loss has been added back.
Iii It has been assumed that the net proceeds of R25 million have
been utilised in the operations of the company.
3 NAVPS and NTAVPS effects, as reflected in the "After" column are based on
the following assumptions and information:
i The transaction was effective 31 December 2010.
ii The consolidated net asset value of the disposal at 31 December 2010
accounted for was R33.7 million. The consolidated net profit on the
disposal amounted to R5.1 million.
CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE Limited.
Sandton
5 April 2011
Independent Lead Designated Adviser
Grindrod Bank Limited
Corporate Adviser and Joint Designated Adviser
Vunani Corporate Finance
Date: 05/04/2011 11:45:01 Produced by the JSE SENS Department.
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