| Tue 30 Aug 2011, 9:37 | | CDZ - Cadiz Holdings Limited - Unaudited pro forma financial effects of BNP |
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CDZ
CDZ
CDZ - Cadiz Holdings Limited - Unaudited pro forma financial effects of BNP
Paribas transaction and withdrawal of cautionary announcement
Cadiz Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1997/007258/06
JSE share code: CDZ & ISIN: ZAE000017661
("Cadiz" or "the Company")
UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE BNP PARIBAS TRANSACTION AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1 INTRODUCTION
Shareholders are referred to the cautionary announcement dated Thursday, 4
August 2011, in which shareholders were advised that Cadiz had entered into
agreements with BNP Paribas SA ("BNPP") in terms whereof BNPP would acquire
a 60% interest in the issued share capital of Cadiz Securities
(Proprietary) Limited and Cadiz Stock Broking (Proprietary) Limited (the
"Securities Companies") for an effective total consideration of
R150,000,000 (the "Transaction") on the basis that the net asset value
("NAV") of the Securities Companies will only include the nominal share
capital of R200.
Investec Bank Limited is authorised to announce the unaudited pro forma
financial effects of the Transaction on the Company. Shareholders are
advised to consider the contents of this announcement together with the
earlier announcement.
2 UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The table below sets out the unaudited pro forma financial effects of the
Transaction on Cadiz. The unaudited pro forma "After" column has been
provided for illustrative purposes only and, because of its nature, may not
give a true picture of Cadiz`s financial position or results of its
operations post the Transaction. The unaudited pro forma financial
information is the responsibility of the Cadiz board. The material
assumptions used in the preparation of the unaudited pro forma financial
effects are set out in the notes following this table.
Actual Pro forma Change
"Before" "After" %
Earnings per share (cents) ("EPS")
- basic 24.11 98.75 310%
- diluted 23.48 96.15 310%
Headline earnings per share (cents)
("HEPS")
- basic 24.11 18.29 -24%
- diluted 23.48 17.81 -24%
Net asset value per share (cents) ("NAV") 3.04 3.80 25%
Net tangible asset value per share 1.77 2.57 46%
(cents) ("NTAV")
Notes:
1. The actual "Before" column has been extracted without adjustment from the
published audited consolidated results of Cadiz for the financial year
ended 31 March 2011.
2. The EPS and HEPS figures, as reflected in the pro forma "After" column are
based on the assumption that the Transaction was implemented on 1 April
2010.
3. The EPS and HEPS as reflected in the pro forma "After" column of the table
are based on the published audited consolidated statement of comprehensive
income of Cadiz after removing the after tax historical income and expenses
of the Securities Companies of R25,768,000 for the year ended 31 March
2011, and after adjusting for the following:
3.1 Interest income has been increased by R11,725,000 based on a return of
6% per annum on the following:
3.1.1 Cash proceeds of R118,000,000, and the distribution of the net
asset value of R82,993,000; and
3.1.2 Less estimated transaction and retention payments of R5,569,000.
3.2 Operating expenses have been increased by R3,687,000 due to an
accelerated share based payment charge incurred by Cadiz Group, in
terms of IFRS 2.
3.3 Surplus on disposal of the Securities Companies of R193,838,000 calculated
as follows:
3.3.1 Cash proceeds of R118,000,000 from the disposal;
3.3.2 Plus the fair value of Cadiz`s remaining 40% shareholding in the
Securities Companies of R81,408,000, as valued by an external
valuation expert; and
3.3.3 Less directly attributable transaction costs of R2,569,000 and
retention payments of R3,000,000 as a result of the Transaction.
3.4 Normal taxation and capital gains tax of R18,371,000 as a result of the
Transaction.
3.5 The income from Cadiz`s 40% share of the Securities Companies of R8,160,000
has been calculated taking into account the historical earnings of the
Securities Companies adjusted for the following:
3.5.1 The after tax interest earned of R3,585,000 by the Securities
Companies on the NAV distributed at transaction date;
3.5.2 Less Cadiz`s R888,000 share of the after tax amortisation charge
on the intangible assets identified in the Securities Companies;
and
3.5.3 Increased by Cadiz`s R175,000 share of the after tax reduction in
the charge for cash settled share appreciation rights ("SARS")
resulting from the change in the method of calculating the
liability in respect of the SARS held by the Securities Companies
employees. (Prior to the Transaction these were accounted for in
terms of IFRS2 but will now be accounted for in terms of IAS 19
after the Transaction.)
3.6 HEPS has been adjusted by the surplus realised on disposal of the
Securities Companies, net of taxation of R178,844,000.
4. The NAV and NTAV as reflected in the pro forma "After" column of the table
are based on the assumption that the Transaction was implemented on 31
March 2011.
5. The NAV and NTAV as reflected in the pro forma "After" column of the table
are based on the published audited consolidated statement of financial
position of Cadiz after taking into account the removal of the historical
assets and liabilities of the Securities Companies as at 31 March 2011 (The
NAV of the Securities Companies will be equal to R200) after adjusting for
the following;
5.1 Investment in associate increasing by R81,408,000 based on the fair value
of Cadiz`s 40% shareholding in the Securities Companies, as valued by an
external valuation expert.
5.2 Inclusion of the cash proceeds of R118,000,000 received from the
Transaction.
5.3 Inclusion of R14,951,000 of normal taxation, capital gains tax and deferred
tax as a result of the Transaction.
5.4 Trade payables increasing by R5,569,000 being the transaction costs of
R2,569,000 and retention payments of R3,000,000.
5.5 Cash settled share based payment liabilities of R6,029,000 removed from the
historical liabilities of the Securities Companies, which are recognised as
equity settled share appreciation rights by Cadiz, have been reclassified
to reserves.
3. WITHDRAWAL OF CAUTIONARY
Further to the earlier announcement, shareholders are advised, that as a
result of the publication of the unaudited pro forma financial effects of
the Transaction, caution is no longer required to be exercised by
shareholders when dealing in their Cadiz shares.
4. CIRCULAR
The circular containing the details of the transaction, and the details of
the general meeting of shareholders convened to consider and approve the
Transaction, will be posted to shareholders on or about 26 September 2011.
Cape Town
30 August 2011
Sponsor: (INVESTEC BANK LIMITED)
(Registration number: 1969/00473/06)
Attorneys: (CLIFFE DEKKER HOFMEYR) - legal advisor to Cadiz
Advisor: (CADIZ CORPORATE SOLUTIONS) - corporate advisor to Cadiz
Date: 30/08/2011 09:37:29 Produced by the JSE SENS Department.
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