| Thu 4 Aug 2011, 15:43 | | HUG - Huge Group Limited - Specific repurchase of shares from related parties |
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HUG
HUG
HUG - Huge Group Limited - Specific repurchase of shares from related parties
HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
("Huge" or "the Group" or "the Company")
SPECIFIC REPURCHASE OF SHARES FROM RELATED PARTIES
1. Shareholders are advised that the board of directors of Huge ("Board") has
resolved to exercise the following call options held against certain past
serving directors of Huge Telecom Proprietary Limited, a wholly owned
subsidiary of the Company, subject to all shareholder, banking and
regulatory approvals (including the approval of the JSE Limited) with
regard to the following:
a) The acquisition of 233 600 Huge Group ordinary shares ("Ordinary
Shares"), by way of a specific authority to repurchase these Ordinary
Shares, from Michelle Allison Meth, a related party to the Company,
for a purchase consideration of R120 000;
b) The acquisition of 233 600 Ordinary Shares, by way of a specific
authority to repurchase these Ordinary Shares, from Barend Jacobus
Vorster, a related party to the Company, for a purchase consideration
of R120 000;
c) The acquisition of 233 600 Ordinary Shares, by way of a specific
authority to repurchase these Ordinary Shares, from Eugene Volschenk,
a related party to the Company, for a purchase consideration of R120
000; and
d) The acquisition of 233 600 Ordinary Shares, by way of a specific
authority to repurchase these Ordinary Shares, from Gregory Wayne
Wright, a related party to the Company, for a purchase consideration
of R120 000.
2. In summary, Huge may, subject to the approvals referred to in the
aforesaid, acquire a total of 934 400 Ordinary Shares in the issued share
capital of the Company, at a price of 51.4 cents per Ordinary Share,
representing a discount of 29.8 % to the 30 day weighted average share
price ("the Acquisitions") of 73.21 cents per share. The Acquisitions are
in line with the Company`s continuing strategy of acquiring its own
Ordinary Shares when it is in the interests of the Company to do so. The
Ordinary Shares shall be acquired using available working capital resources
of the Company.
3. The Acquisitions will be from related parties, and shall therefore be
subject to the inclusion of a statement by the Board, in a circular,
confirming whether the Acquisitions are fair insofar as the shareholders
(excluding the related parties) of the Company are concerned. The Board
shall be advised by an independent expert in this regard and obtain a
fairness opinion from the independent expert.
4. The Board, after considering the effect of such Acquisitions, confirms that
the Company is in compliance with the provisions of section 4 of the
Listings Requirements of the JSE Limited, and section 48 of the Companies
Act, Act 71 of 2008, and:
a) the Company and the Group will be able, in the ordinary course of
business, to pay its debts for a period of 12 months after the dates
of the approval of the circular to be issued in this regard;
b) the assets of the Company and the Group will be in excess of the
liabilities of the Company and the Group for a period of 12 months
after the date of the approval of the circular to be issued in this
regard;
c) the share capital and reserves of the Company will be adequate for
ordinary business purposes for a period of 12 months after the date of
the circular to be issued in this regard; and
d) the working capital of the Company and the Group will be adequate for
ordinary business purposes after the date of the approval of the
circular to be issued in this regard.
5. The Board proposes the granting, by shareholders of the Company, of a
specific authority to repurchase the foregoing Ordinary Shares by means of
a special resolution to be tabled before shareholders at a general meeting,
on the basis that the Company has passed the solvency and liquidity test,
and since the test was performed no material changes to the financial
position of the Company or the Group have been noted.
6. Pro-forma effects
The table below sets out the unaudited pro forma financial effects of the
Acquisitions on Huge`s basic loss and headline loss, net asset value and
net tangible asset value per Ordinary Share.
The unaudited pro forma financial effects have been prepared to illustrate
the impact of the Acquisitions on the provisional condensed reviewed
results of Huge for the year ended 28 February 2011 after adjusting for the
disposal of a 49% interest in TelePassport Communications Proprietary
Limited ("TelePassport" or "the Associate") ("the Sale Transaction"), which
was announced on 8 July 2011, had the Acquisitions occurred on 1 March 2010
for income statement purposes and on 28 February 2011 for statement of
financial position purposes.
The unaudited pro forma financial effects set out below are the
responsibility of the Board and have been prepared for illustrative
purposes only and because of their nature may not fairly present the
financial position, changes in equity, results of operations or cash flows
of Huge after the Acquisitions:
Before (1) After the After the Percentage
Sale Sale change (4)
Transaction Transaction
(2) and
Acquisitions
(3)
Basic (loss) / (15.34) (14.66) (14.90) (1.61)
earnings per share
(cents)
Headline (loss) / (15.41) (18.02) (18.20) (1.00)
earnings per share
(cents)
Net asset value per 245.54 252.36 254.37 0.79
share (cents)
Net tangible asset 2.72 0.34 (0.23) (166.36)
value per share
(cents)
Total number of 95,901 92,401 91,467 (1.01)
shares in issue
(`000)
Weighted average 97,663 94,163 93,229 (0.99)
number of shares in
issue (`000)
NOTES:
1. The "Before" basic and headline loss per share, and the net asset
value and net tangible asset value per share have been extracted
without adjustment from the provisional condensed reviewed results of
Huge for the year ended 28 February 2011. The "Before" net asset value
and net tangible asset value per share have been calculated from the
financial information presented in the provisional condensed reviewed
results of Huge for the year ended 28 February 2011.
2. The "After the Sale Transaction" column assumes:
a. Recognition of the profit on sale of the Associate, being the
excess of the expected proceeds on the sale of the Associate over
the carrying value of the Associate as at 28 February 2011;
b. Reversal of share of Associate profit of R1 438 375 for the year
ended 28 February 2011;
c. Payment of R478 135 in respect of transaction costs relating to
the Sale Transaction;
d. Reversal of the carrying value of the investment in Associate;
e. Reduction in share capital and share premium amounting to R 4 900
000, due to the repurchase of 3 500 000 shares by Huge at 140
cents per share.
3. The "After the Sale Transaction and Acquisitions" column assumes:
a. the adjustments detailed in note 2 above;
b. reduction in the interest received on the cash balance, due to
the acquisition of 934 400 Ordinary Shares being settled in cash;
c. payment of R46 865 in respect of transaction costs relating to
the Acquisitions;
d. reduction in share capital and share premium amounting to R 480
282, due to the repurchase of 934 400 Ordinary Shares by Huge at
51.4 cents per Ordinary Share.
4. The "Percentage change" column has been based on the "after the Sale
Transaction and Acquisitions" column as a percentage of the "after the
Sale Transaction" column.
7. A circular to shareholders containing details of the foregoing is currently
being prepared. It is anticipated that the general meeting in this regard
will be held 15 business days after the posting of the circular, and it is
expected that the Ordinary shares in questions will be cancelled and the
listing thereof terminated as soon as practicably possible thereafter.
Johannesburg
4 August 2011
Designated Advisor
Arcay Moela Sponsors Proprietary Limited
Date: 04/08/2011 15:43:14 Produced by the JSE SENS Department.
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