| Fri 2 Mar 2001, 0:00 | | Proposed Specific Repurchase Of Aquila Ordinary Sh |
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Aquila Growth Limited
(Registration number 1995/003158/06)
("Aquila" or "the company")
Proposed specific repurchase of Aquila ordinary shares
1. Introduction
Real Africa Durolink Investment Bank Limited ("RAD") is authorised to announce
that Aquila and its subsidiary will make specific offers to repurchase Aquila
ordinary shares ("shares") from Aquila ordinary shareholders ("shareholders")
pro rata to their ordinary shareholding in Aquila subject, inter alia, to the
approval of shareholders, by way of a special resolution, in general meeting,
in terms of sections 85 to 89 of the Companies Act (61 of 1973) as amended
("the Act"), and the listings requirements of the JSE Securities Exchange South
Africa ("JSE").
In addition, the Directors of Aquila ("the Directors") propose that
shareholders approve and renew the Directors mandate to repurchase shares by
way of general authority.
2. Rationale
The Directors have considered a number of proposals aimed at delivering optimal
shareholder value. The specific repurchase is seen as the best alternative and
the Directors are of the opinion that the implementation thereof should:
- enhance Aquila's net asset value per ordinary share;
- increase the return on shareholders' equity; and
- reduce the discount at which the shares are trading relative to their
underlying value.
3. Terms of the Specific Repurchase
In terms of the specific repurchase, Aquila and its subsidiary will propose to
acquire from shareholders, pro rata to their shareholding, 16 000 000 shares in
aggregate, comprising approximately 11,2% of the issued ordinary share capital
of Aquila ("the pro rata offer"). Shareholders may elect to tender further
shares in excess of the pro rata offer. In the event that shares are tendered
in excess of
16 000 000 shares, Aquila may choose to acquire such further shares, pro rata
to the excess shares tendered, from shareholders, as the Directors resolve,
subject to a maximum number of shares of 40 000 000 (collectively, "the
specific repurchase").
It is proposed that:
- Aquila will repurchase from shareholders all shares tendered in excess of
14 310 494, which shares will be cancelled, subject to a minimum of 1 689 506
and maximum of 30 000 000; and
- a subsidiary of Aquila will purchase from shareholders all shares tendered
up to a maximum of 14 310 494 shares, which shares will be held as treasury
stock.
The purchase price per share payable to shareholders in terms of the specific
repurchase is a payment of R1.25 per share, payable in cash ("the offer
consideration").
The cash cost to Aquila and its subsidiary in respect of the price payable in
terms of the specific repurchase will be approximately R20 million, if 16 000
000 shares are repurchased. The maximum cash cost to Aquila and its subsidiary
in terms of the specific repurchase is approximately R50 million, and only if
the Directors resolve to repurchase 40 000 000 shares.
No final dividend in respect of the 2001 financial year will be declared.
4. Conditions precedent
The specific repurchase is, inter alia, subject to the following suspensive
conditions which have not yet been fulfilled:
- the passing of the requisite resolutions by shareholders in general meeting,
approving the specific repurchase in accordance with the requirements of the
JSE and the Act; and
- obtaining the requisite approvals of the JSE and Securities Regulation
Panel, in so far as it may be required.
5. Salient dates relating to the implementation of the specific repurchase
2001
Last day to lodge forms of proxy for the shareholders'
meeting by 09:00 on Tuesday, 10
April
Shareholders' meeting to be held at 09:00 on Wednesday, 11
April
Last day to register in order to participate in the offer Thursday, 12
April
Specific repurchase offer opens at 09:00 Tueday, 17
April
Cheques posted or electronically transferred to shareholders for the pro rata
offer accepted,if documents of title are received on or prior to
Friday, 20 April Monday, 23
April
(or, failing such receipt, within five business days of documents of title
being received by the transfer secretaries, cheques will be posted)
Specific repurchase offer closes at 16:00 Monday, 7
May
Cheques posted or electronically transferred to shareholders for shares in
excess of the pro rata offer tendered by shareholders and accepted by the
Directors, if documents of title are received on or prior to Monday, 7 May
Tuesday, 8 May
Notes:
1. The above dates and times are subject to amendment. Any such amendment will
be published in the press (Business Day and Beeld) and on the Stock Exchange
News Service ("SENS").
6. Financial Effects on Aquila
The pro-forma financial effects of the specific repurchase on net asset value
and earnings per share, before and after the specific repurchase, are set out
below:
Before After
Notes (cents per share) (cents per share) Chang
Net asset value 1 176 182 3,4
Earnings 2 (1,4) (2,1) 0,7 cent
The above calculations are based on 16 000 000 shares being repurchased, and
148 971 614 Aquila shares in issue before the specific repurchase and 132 971
614 Aquila shares in issue after the specific repurchase (i.e. excluding the
shares which are cancelled and which are held in treasury).
Notes:
1. Based on the published unaudited interim balance sheet of Aquila at 31
August 2000 on the assumption that the specific repurchase was effective on
that date.
2. Based on the published unaudited interim results for the six months ended
31 August 2000. The amount in the "After" column represents the earnings that
would have accrued per Aquila ordinary share had the specific repurchase been
effective from 1 March 2000, on the assumption that the income on cash balances
foregone accrued at an average interest rate of 10.5% p.a.
7. The pro forma financial effects of the sprecific repurchase on a shareholder
Before After
Notes (cents per share) (cents per share)
Change
Earnings 1 (1,4) 4,7 6,1
cents
Market value 2 110,0 125,0
3,6%
Notes:
1. Based on the published unaudited interim balance sheet of Aquila at 31
August 2000. The amount in the "After" column represents the interest after tax
which a shareholder with a marginal tax rate of 30% would have earned, had the
Aquila ordinary shareholder invested an amount equal to the offer consideration
for the
6 months ended 31 August 2000 at an approximate average interest rate over that
period, being 10.5%, compounded monthly in arrears.
2. The amount in the "Before" column is based on the share price of Aquila
shares at the close of business on 1 March 2001 on the JSE, the date prior to
the publication of this announcement. The amount in the "After" column
represents the offer consideration.
8. Funding of the Specific Repurchase
Aquila and its subsidiary intend to make use of a bridging facility from RAD
and anticipated cash flows from underlying investments to fund the specific
repurchase.
The Directors have satisfied themselves as to the liquidity and solvency of the
company for the 12-month period immediately following the implementation date.
9. GENERAL AUTHORITY TO REPURCHASE SHARES
The Directors seek authorisation, subject to the provisions of the Act and the
rules and requirements of the JSE, to acquire ordinary shares in the company's
issued share capital from time to time.
The intention of the Directors is to utilise the authority if the shares issued
by the company, in the opinion of the directors, are trading at a discount to
their intrinsic value. The method by which the company intends to repurchase
its securities and the date on which such repurchase will take place, if any,
have not yet been determined.
10. STATEMENT BY DIRECTORS
The Directors of Aquila have considered the effect of the specific repurchase
and any general repurchase and are of the opinion that:
- the company will be able in the ordinary course of business to pay its debts
for a period of 12 months after the date of this announcement;
- the assets of the company will be in excess of the liabilities of the
company for the period of 12 months after the date of this announcement. For
this purpose, the assets and liabilities will be recognised and measured in
accordance with the accounting policies used in the latest audited annual group
financial statements for Aquila;
- the ordinary capital and reserves of the company will be adequate for the
company's requirements for a period of at least 12 months after the date of
this announcement; and
- the working capital available to the company will be sufficient for the
company's requirements for a period of at least 12 months after the date of
this announcement.
11. General Meeting
A circular to shareholders setting out details of the specific repurchase and
the renewal of a general authority to directors to repurchase shares, and
including a notice of the general meeting and proxy will be posted to
shareholders in 28 days.
Bryanston
2 March 2001
Investment Bank and Corporate Adviser
RAD
Real Africa Durolink Investment Bank Limited
(Registration number 1987/005258/06)
www.radbank.co.za
Attorneys
VORSTER
PEREIRA INC
Sponsor
RAD
Real Africa Durolink Investment Bank Limited
(Registration number 1987/005258/06)
www.radbank.co.za
