| Thu 1 Sep 2011, 13:50 | | CDZ - Cadiz Holdings Limited - Related Party Transaction |
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CDZ
CDZ
CDZ - Cadiz Holdings Limited - Related Party Transaction
CADIZ HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1997/007258/06
ISIN: ZAE000017661
JSE Share code: CDZ
("Cadiz" or "the company")
ANNOUNCEMENT - RELATED PARTY TRANSACTION
TRANSACTION AND RATIONALE
Cadiz Special Projects Limited, a wholly owned subsidiary of Cadiz, reached
agreement with Makana Investment Corporation (Pty) Ltd ("Makana") to redeem
the existing R19.6 million convertible redeemable preference shares issued by
Makana with a preference share dividend of 47.619% of the prime rate, which
were convertible into a 24.81% ordinary shareholding in Makana on 6 April
2011("Original Preference Shares"), and to subscribe for R19.6 million
convertible redeemable preference shares with a preference dividend equal to
32.996% of any ordinary dividends declared by Makana (equal to 24.81% of the
total dividends including the preference share dividend), which are
convertible into a 24.81% ordinary shareholding in Makana at any time up until
7 April 2016 ("New Preference Shares").
This will enable Makana to maintain its current Broad-based Black Economic
Empowerment credentials as conversion by Cadiz would have diluted Makana`s
almost 100% black ownership.
FINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects of the
decision to replace the Original Preference Shares with the New Preference
Shares issued by Makana ("the Transaction"). These unaudited pro forma
financial effects are the responsibility of the directors of Cadiz. The
unaudited pro forma financial effects are presented for illustrative purposes
only and because of their nature may not give a fair reflection of Cadiz`
results and financial position after the Transaction.
Pro Pro
forma forma Change
"Before" "After"
(cents) (cents)
Earnings per share 24.1 24.5 -1.2%
Diluted earnings per share 23.5 23.9 -1.3%
Headline earnings per share 24.1 24.5 -1.2%
Diluted headline earnings per share 23.5 23.9 -1.3%
Net asset value per share 304 304 0.0%
Net tangible asset value per share 177 177 0.0%
Number of shares in issue (`000) 245 339 245 339 0.0%
Consolidated number of shares in issue (`000) 225 205 225 205 0.0%
Weighted average number of shares in issue 222 262 222 262 0.0%
(`000)
Diluted weighted average number of shares in 228 276 228 276 0.0%
issue (`000)
The unaudited pro forma financial effects are based on Cadiz`s published
consolidated statement of financial position and statement of comprehensive
income for the year ended 31 March 2011, assuming:
1. For the purposes of calculating earnings per share and headline earnings
per share, that the transaction was effective on 1 April 2010; and
2. For the purposes of calculating net asset value and net tangible asset
value per share, that the transaction was effective on 31 March 2011.
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 for the financial year ended 31 March 2011 after adjusting for
the following:
3.1 Deducting the historical dividends received of R947,000 on the Original
Preference Share;
3.2 Deducting effective interest of R950,000 recognised based on the
measurement of the Original Preference Shares at amortised cost using the
effective interest rate method;
3.3 Mark to market of R632,000 in respect of the conversion option in the New
Preference Shares;
3.4 Including effective interest of R927,000 recognised based on the
measurement of the New Preference Shares at amortised cost using the effective
interest rate method; and
Costs of R320,000 relating to the Transaction.
4. 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 as at 31 March 2011 after adjusting for the following:
4.1 Financial assets increasing by R632,000 due to the mark to market in
respect of the conversion option in the New Preference Shares offset by the
measurement of the New Preference Shares at amortised cost using the effective
interest rate method; and
4.2 Trade and other payables increasing by R320,000 for the costs related to
the Transaction.
CONDITIONS PRECEDENT
The implementation of the Transaction is subject to
finalisation of the subscription agreements relating to the issue of the New
Preference Shares.
SMALL RELATED PARTY TRANSACTION
Makana is a 13.6% shareholder in Cadiz and has therefore been treated as a
related party. Ernst & Young Advisory Services Ltd, as the independent
professional expert, has confirmed that the Transaction is fair and their
fairness opinion is available for inspection at Cadiz`s registered office
until 12 October 2011.
Cape Town
1 September 2011
Sponsor: Investec Bank Limited
Date: 01/09/2011 13:50:01 Produced by the JSE SENS Department.
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