| Tue 24 May 2011, 17:49 | | BCX - Business Connexion Group Limited - Announcement relating to the disposal |
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BCX
BCX
BCX - Business Connexion Group Limited - Announcement relating to the disposal
of BCX`S 70% shareholding in and all of its loan claims against Destiny
Electronic Commerce (Proprietary) Limited and further cautionary announcement
Business Connexion Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/005282/06)
(ISIN: ZAE000054631)
(Share code: BCX)
("BCX" or "the Company")
ANNOUNCEMENT RELATING TO THE DISPOSAL OF BCX`S 70% SHAREHOLDING IN AND ALL OF
ITS LOAN CLAIMS AGAINST DESTINY ELECTRONIC COMMERCE (PROPRIETARY) LIMITED AND
FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement released by BCX on SENS on Thursday, 12
May 2011 and in the press on Friday 13 May 2011, BCX shareholders are hereby
advised that BCX and certain other parties has entered into a share purchase
agreement with VeriFone Singapore PTE. Limited, an indirect subsidiary of
VeriFone System Inc., ("VeriFone or the Purchaser"), an American public company
listed on the New York Stock Exchange ("NYSE") relating to the sale of Destiny
Electronic Commerce (Proprietary) Limited ("Destiny") dated 24 May 2011 ("the
Share Purchase Agreement"), in terms of which BCX ("the Seller") will sell its
70% shareholding in and all claims on loan accounts against Destiny on the terms
and conditions set out below ("the Disposal").
2. Rationale
As announced on SENS on Thursday 5 May 2011, BCX concluded the acquisition (`the
Acquisition") of five companies ("Target Companies") from UCS Group Limited
("UCS") which included Destiny. BCX acquired 70% of the shareholding in Destiny
as a result of the Acquisition.
Destiny is an authorised VeriFone International Partner for VeriFone payment
systems into sub-Saharan Africa and has sale and distribution rights for such
terminals into the territory. Destiny further provides software payment
solutions and field support services for use with and relation to the payment
devices and/or systems. VeriFone is looking to establish a business in Africa
and identified Destiny as part of their Africa Strategy.
During the conclusion of the Acquisition, VeriFone approached BCX and UCS with
an interest to acquire the entire shareholding in Destiny.
BCX is of the opinion that it is in BCX shareholders` best interest to dispose
of Destiny given that VeriFone is the sole the supplier of the payment devices
represented by Destiny.
3. Details of the Disposal
3.1. Salient details
The SENS announcement dated 15 December 2010 outlined the process for the
potential disposal of a Target Company purchased from UCS, within 12 months of
the effective date of the Acquisition. In terms of the Purchase Agreement signed
in relation to the Acquisition, UCS has the right to elect that in respect of
one disposal, UCS shall be entitled to 70% of the net proceeds of such disposal
where the net proceeds are in excess of R144,000,000.00 (one hundred and forty
four million),realised and actually received by BCX, up to R100,000,000.00 (one
hundred million), and thereafter 100% of the balance of the net proceeds
exceeding the aforesaid R100,000,000.00 (one hundred million) threshold.
VeriFone will acquire the entire issued share capital of Destiny from BCX and
the other management shareholders in Destiny.
3.2. Disposal Price
The purchase price payable by VeriFone to BCX shall be an amount equal to
R255, 000,000.00 (two hundred and fifty five million) (the "Purchase Price")
which shall be allocated as follows:
i) an amount of R44,896,337.00 (forty four million eight hundred ninety six
thousand three hundred thirty seven) in relation to the BCX Shareholder Claims
which BCX acquired from UCS in terms of the Acquisition (being the face value
thereof);
ii) as to the remaining balance in relation to the 70% shareholding held by BCX
in Destiny;
4. Pro forma financial effects of the Disposal on BCX shareholders
The unaudited pro forma financial effects of the Disposal on BCX shareholders
are in the process of being finalised and will be released in a separate
announcement to shareholders.
5. Suspensive conditions
The Disposal has been approved by the board of directors of BCX, but remains
subject to the fulfilment or waiver (where applicable) of the following
suspensive conditions:
- All exchange control approvals which are required from the Exchange Control
Department of the South African Reserve Bank under the Exchange Control
Regulations, or otherwise, being duly obtained;
- That key management enter into employment agreements with Destiny and that
certain incentive bonus amounts relating to key management are settled;
- Delivery to the Purchaser of written confirmation (in a form acceptable to the
Purchaser, acting reasonably) from Destiny`s existing bankers confirming that
all existing banking facilities will remain in place pursuant to the Disposal;
and
- Delivery to the Purchaser of written confirmation (in a form acceptable to the
Purchaser, acting reasonably) from certain key customers of Destiny confirming
that they consent to the Disposal (to the extent required).
6. Effective date
The Disposal will be effective on the last business day of the month in which
the last of the suspensive conditions has been fulfilled or waived, as the case
may be.
7. Classification of the Disposal
The Disposal is classified as a category 2 transaction in terms of the JSE
Listings Requirements and accordingly this announcement is for information
purposes only with no action being required by BCX shareholders.
8. Cautionary announcement
As the pro forma financial effects of the Disposal have not been provided, BCX
shareholders are advised to continue exercising caution when dealing in their
BCX shares until a further announcement is made.
Midrand
24 May 2011
Merchant bank and sponsor to BCX
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Attorneys to BCX
Glyn Marais Inc
Date: 24/05/2011 17:49:04 Produced by the JSE SENS Department.
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