| Mon 31 Oct 2011, 12:53 | | AET - Alert Steel Holdings Limited - Pro-forma restructured statement |
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AET
AET
AET - Alert Steel Holdings Limited - Pro-forma restructured statement
of financial position
ALERT STEEL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2003/005144/06)
JSE code: AET ISIN: ZAE000092847
("Alert Steel" or "the company" or "the group")
Pro-forma restructured statement of financial position
1. Introduction and purpose
Due to the material nature of the post balance sheet events that have
taken place subsequent to the 30 June 2011 year end, the board of Alert
Steel would like to update investors on what the effect of these events
would have been on the statement of financial position, had the
transactions taken place on 30 June 2011.
Shareholders are referred to the provisional financial results of Alert
Steel as announced on SENS on 17 October 2011 where these pro-forma
financial results were disclosed.
2. Summary of post balance sheet events
A summary of the individual post balance sheet events has been provided
in paragraphs 2.1 to 2.4 below.
2.1 Rights offer
Shareholders are referred to an announcement released on SENS on 12
October 2011 in which the results of the rights offer were communicated
to investors.
In terms of the rights offer, a total of 1 515 151 515 new ordinary
shares were issued at a price of 3.3 cents per rights offer share,
resulting in a total cash inflow to Alert Steel of R50 000 000.
2.2 Restructuring of loan
Following the completion of the rights offer, Nedbank Limited
("Nedbank") agreed to restructure the overdraft owing by Alert Steel
amounting to R90 000 000.
In terms of the restructuring, the overdraft was converted into long
term loan owing to Nedbank, the terms of which are as follows:
- R70 000 000 bears interest at prime minus 2 percent and is
repayable on the fifth anniversary of the advance date; and
- R20 000 000 bears interest at prime and is repayable in 24
equal monthly installments, starting in month 13.
The loan was secured by a cession of debtors and general notarial bonds
of R162 000 000.
2.3 Murray & Roberts transaction
The group has entered into a transaction with Murray & Roberts Steel
(Pty) Ltd, in terms of which the group disposed of RSC Polokwane
division and its shares in Alert Reinforcing (Pty) Ltd while acquiring
the balance of the shares in Alert Steel Polokwane (Pty) Ltd (the
"indivisible transactions").
Shareholders are referred to the circular posted to shareholders on 29
August 2011 wherein, the full details of the indivisible transactions
were disclosed to shareholders and the SENS announcement on 29
September 2011, informing shareholders of the approval of, inter alia,
the resolutions relating to the indivisible transactions in general
meeting.
2.4 Alert Steel North West transaction
The group acquired 100% of the shares in and claims against Alert Steel
North West (Pty) Ltd ("Alert Steel North West"), effective 1 February
2011.
Per the sale agreement and as disclosed in the circular posted to
shareholders on 29 August 2011, the purchase consideration for the
shares so acquired was determined in accordance with an agreed formula
which is dependent on the net asset value of Alert Steel North West at
a date determined by Alert Steel which is more than twenty four months
but less than thirty six months after the closing date of this
transaction ("the Conversion Date").
The purchase consideration for the claims so acquired is the face value
of all claims against Alert Steel North West so acquired. The portion
of the purchase consideration relating to acquired claims was
discharged by the creation of a loan claim by Alert Steel in favour of
the seller, Capital Africa Steel (Pty) Ltd ("CAS").
The loan so created bears interest at prime plus 2%. Both the loan
claim so created and the purchase consideration for the shares acquired
will be discharged by conversion into ordinary shares in Alert Steel on
the Conversion Date referred to above.
Shareholders are referred to the circular posted to shareholders on 29
August 2011, wherein the full details of the Alert Steel North West
transaction were disclosed to shareholders and the SENS announcement on
29 September 2011, informing shareholders of the approval of the
resolutions relating to, inter alia, this transaction in general
meeting.
3. Pro-forma financial effects
The pro-forma financial effects are presented for illustrative purposes
only and, because of their nature, may not fairly present Alert Steel`s
financial position after the transactions have been implemented.
The pro-forma financial effects are the responsibility of the directors
of Alert Steel.
The effect on the statement of financial position, had the transactions
taken place on 30 June 2011, is as follows:
PRO-FORMA RESTRUCTURED STATEMENT OF FINANCIAL POSITION
Loan
Before Rights restruc-
R`000 offer ture
Assets
Non-current assets 139 485 - -
Current assets 238 803 - -
Assets held for sale 20 187 - -
Total assets 398 475 - -
Equity and liabilities
Equity (28 132) 50 000 -
Non-current liabilities 72 452 - 90 000
Current liabilities 340 867 (50 000) (90 000)
Liabilities held for sale 13 288 - -
Total liabilities 426 607 (50 000) -
Total equity and
liabilities 398 475 - -
PRO-FORMA RESTRUCTURED STATEMENT OF FINANCIAL POSITION continued
Murray & North
Roberts West Re-
trans acqui- struct-
R`000 action sition ured
Assets
Non-current Assets 979 6 747 147 211
Current Assets 30 095 25 556 294 454
Assets held for sale (20 187) - -
Total Assets 10 887 32 303 441 665
Equity and liabilities
Equity - - 21 868
Non-current liabilities - 21 709 184 161
Current liabilities 24 175 10 594 235 636
Liabilities held for sale (13 288) - -
Total liabilities 10 887 32 303 419 797
Total equity and
liabilities 10 887 32 303 441 665
3.1 Basis of preparation
This pro-forma statement of financial position has been prepared in
terms of International Financial Reporting Standards ("IFRS") and the
Revised Guide on Pro-Forma Financial Information issued by the South
African Institute of Chartered Accountants.
3.2 Notes and assumptions
- The financial information as set out in the "Before" column has
been extracted without adjustment from the reviewed published
provisional results of Alert Steel for the financial year ended 30
June 2011.
- The column headed "Rights Offer" has been calculated as the actual
number of shares taken up in terms of the Alert Steel rights offer
of 1 515 151 515 shares issued at a rights offer price of 3.3
cents per rights offer share thereby generating a cash inflow of
R50 000 000.
- The column headed "Loan Restructure" refers to the restructuring
of the Nedbank loan subsequent to the completion of the rights
offer and on the terms disclosed in paragraph 2.2. The proceeds on
the Nedbank loan were applied by Alert Steel to settle the bank
overdraft.
- The column headed "Murray & Roberts" transaction has been
extracted from the reviewed published pro-forma financial results
of the indivisible transactions as published in the circular
posted to shareholders on 29 August 2011, and adjusted for the net
change in the net asset value of the divisions forming the
indivisible transactions. The Reporting Accountant of Alert Steel
has reviewed this calculation.
- The column headed "Alert North West acquisition" has been
extracted from the reviewed published pro-forma financial results
as published in the circular posted to shareholders on 29 August
2011, and adjusted for the net change in the net asset value of
Alert Steel North West in terms of the formula as disclosed in the
above mentioned circular. The Reporting Accountant of Alert Steel
has reviewed this calculation.
- The pro-forma adjustments as disclosed above are expected to have
a continuing effect on the company.
4. Reporting accountants` limited assurance report on the pro-forma
consolidated financial effects
The reporting accountants of Alert Steel have performed a limited
assurance engagement in respect of the pro-forma restructured statement
of financial position. The limited assurance report states that, based
on the reporting accountants` examination of the evidence obtained,
nothing has come to their attention that causes them to believe that:
- the pro-forma restructured financial position has not been
properly compiled on the basis stated;
- such basis is inconsistent with the accounting policies of
Alert Steel; and
- the adjustments are not appropriate for the purposes of the
pro-forma financial information as disclosed pursuant to
sections 8.17 and 8.30 of the JSE Listings Requirements.
The Reporting Accountants have consented to the references made to
their opinion letter in this announcement and have not withdrawn this
consent subsequent to the date of publishing of this announcement.
A copy of the Reporting Accountants` limited assurance report is
available for inspection at the company`s registered office, cnr
Engelbrecht and Lanham Streets, East Lynne, Pretoria.
By order of the Board
For and on behalf of the board
M McCulloch J du Toit
Chairman Chief executive
31 October 2011
Pretoria
Designated Advisor
QuestCo Sponsors (Pty) Ltd
Date: 31/10/2011 12:53:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
