| Wed 8 Jun 2011, 16:23 | | KIR - Kairos - Proposed Delisting of Kairos from the main board of the JSE |
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KIR
KIR
KIR - Kairos - Proposed Delisting of Kairos from the main board of the JSE
Limited and Withdrawal of Cautionary Announcement
Kairos Industrial Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/002927/06)
Share code: KIR ISIN: ZAE000011284
("Kairos" or "the Company")
PROPOSED DELISTING OF KAIROS FROM THE MAIN BOARD OF THE JSE LIMITED AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Proposal to delist
For the reasons mentioned below, the Kairos board of directors ("the
Board") has resolved that there is no ongoing merit in retaining the
listing of Kairos on the JSE Limited, as the costs of maintaining a listing
significantly overweigh the benefits of the listing and as such the
Company`s business will for now be best suited to an unlisted environment.
Should shareholder approval be received for the proposed delisting of
Kairos, the Company`s controlling shareholder, Shefa Equity Holdings (Pty)
Limited ("SEH") will in terms of paragraph 1.14(c) of the Listings
Requirements of the JSE Limited, make an offer to acquire all Kairos
ordinary shares held by minority shareholders, at an offer consideration of
1c (one cent) per share ("the Offer").
2. Rationale for the delisting
The rationale for the delisting is that:
- Kairos` operational and financial performance has for some time been
adversely affected by a number of well publicised factors. As a result
of these developments, the Board believes that the Company will be
better suited to an unlisted environment where its limited management
resources can be focused on operational issues without the distraction
from regulatory and shareholder issues;
- The Board has considered the ongoing cost of maintaining the required
levels of public disclosure and scrutiny which significantly
overweighs the benefits of a listing. It is estimated that the cost
savings associated with the delisting of the Company will amount to at
least R2 million per annum; and
- Approximately 82% of the Company`s ordinary shares are held by 7
shareholders leaving a free float of approximately 18% which partly
explains the illiquidity of the Kairos shares on the market. The Offer
will provide those shareholders who wish to exit, an opportunity to
dispose of their ordinary shares.
3. Conditions precedent
The proposed delisting is subject to inter alia, the fulfillment of the
following conditions precedent:
- The passing, by the requisite majority of Kairos shareholders at a
general meeting, of the resolutions required to implement the
delisting;
- The unconditional approval by the Takeover Regulation Panel ("TRP") of
the Offer; and
- The unconditional approval by the JSE of the application to delist the
Company`s ordinary shares.
4. Current Financial Performance
The Audited Financial Statements of Kairos for the year ending the 28th
February 2011 were published on SENS and distributed to all Kairos
shareholders on the 31st May 2011. As at 28 February 2011 the Group had a
negative Net Asset Value per share of 25.56 cents.
The audited financial position of Kairos as presented is as set out below:
2011 2010
As at 28 February Audited Audited
Loss for the year (R 000`s) (37 421) (89 303)
Total Comprehensive Loss (R 000`s) (38 383) (83 750)
Loss for the year per share (cents) (16.66) (39.77)
2
Headline Loss per share (cents) 2 (16.64) (40.65)
Net Asset Value per share (cents) 2 (25.56) (8.47)
Tangible Net Asset Value per share (26.67) (9.58)
(cents) 2
Ordinary Shares in issue 224 554 224 554
430 430
Weighted average number of ordinary 224 554 224 554
shares in issue 430 430
Notes:
1. This financial information is extracted from the audited consolidated
statement of comprehensive income of Kairos for the 12 months ended 28
February 2010 and 28 February 2011 respectively.
2. Calculated taking into account the 224 554 430 Kairos ordinary shares
in issue.
5. Fairness opinion
In compliance with the Section 1.13 to 1.16 of Listings Requirements the
Board has appointed an Independent Expert to consider whether the Offer is
fair to the Kairos shareholders. The opinion of the Independent Expert will
be included in the circular to shareholders.
6. Circular to shareholders
A circular containing the information required in terms of the Listings
Requirements and incorporating a notice convening a General Meeting of
Kairos shareholders to approve the delisting and the implementation of the
Offer will in due course, subject to the approval of the JSE and the TRP,
be posted to Kairos shareholders.
7. Salient dates and times
The salient dates and times pertaining to the offer will be published on
SENS prior to the issuing of the aforementioned circular. A further
detailed announcement will be published on SENS and in the press once the
full terms as well as the salient dates and times of the proposed delisting
have been finalised.
8. Withdrawal of Cautionary Announcement
Kairos shareholders are referred to various cautionary announcements
published on SENS between March 2010 and April 2011 in which the Board
advised shareholders of the disappointing financial performance and
position of Brokrew Industrial (Proprietary) Limited ("Brokrew"), a wholly
owned subsidiary of Kairos. The impact this has had on financial position
of Kairos has now been appropriately disclosed in the recently published
financial results for the year ended 28 February 2011, as well as the
annual report sent to shareholders.
Shareholders were advised that the financial restructuring of Brokrew was
being pursued. As disclosed in the annual report, this process has now
resulted in the support of the majority of affected Brokrew creditors for
the deferred payment of outstanding amounts, where repayments will occur on
an agreed and structured basis. Brokrew is also in the process of procuring
additional working capital funding.
As a result, the notice to shareholders to trade with caution is hereby
withdrawn.
Pretoria
8 June 2011
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 08/06/2011 16:23:01 Produced by the JSE SENS Department.
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