| Mon 14 Nov 2011, 16:16 | | UBU - Ububele Holdings Limited - Update on acquisition by yield Chemicals |
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UBU
UBU
UBU - Ububele Holdings Limited - Update on acquisition by yield Chemicals
Group of Erintrade and R.T. Chemicals and specific issue of 1 250 000
ordinary shares to AIP
Ububele Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/011074/06)
Share code: UBU
ISIN Code: ZAE000144739
("Ububele" or "the Company")
UPDATE ON ACQUISITION BY YIELD CHEMICALS GROUP OF ERINTRADE AND R.T.
CHEMICALS AND SPECIFIC ISSUE OF 1 250 000 ORDINARY SHARES TO AIP
1. PROPOSED ACQUISITION OF ERINTRADE AND R.T. CHEMICALS
Shareholders are referred to the Company`s detailed announcement on SENS
dated 16 September 2011 ("the Announcement") regarding the proposed
acquisition of Erintrade (Pty) Limited ("Erintrade") and R.T. Chemicals
(Pty) Limited ("R.T. Chemicals"), whereby Yield Chemicals Group (Pty)
Limited ("Yield Chemicals Group"), a wholly-owned subsidiary of the
Company had entered into a sale of shares agreement with Messrs Richard
Peter Wimbush, Richard Trevor Wimbush and JJ Faul (collectively
hereinafter "the Sellers"), in terms of which the Sellers will dispose of
49.9% of the entire issued share capital in Erintrade and R.T. Chemicals,
to Yield Chemicals Group ("the Proposed Acquisition") for the total
purchase consideration of R40 million. Subsequent to the successful
implementation of Proposed Acquisition, Erintrade and R.T. Chemicals will
become wholly-owned subsidiaries of Yield Chemicals Group.
2. PROPOSED SPECIFIC ISSUE OF SHARES
Shareholders are further advised that Ububele has proposed to issue 1 250
000 ordinary shares in Ububele to Arcay Investment Portfolio (Pty)
Limited ("AIP"), based on a subscription price of 100 cents per Ububele
ordinary share ("the Proposed Specific Issue of Shares"), subject to
approval from shareholders. The Proposed Specific Issue of Shares is in
lieu outstanding fees for services rendered to Ububele by Arcay Corporate
Finance (Pty) Limited ("Arcay CF"), as previous corporate advisor to
Ububele during the reverse listing of Ububele into Milkworx Limited in
November 2009. Subsequent to the services being rendered, Arcay CF ceded
the outstanding fees claim to AIP.
3. CHANGES TO THE PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Proposed Acquisition, as disclosed
in the Announcement, have been updated in terms of Section 9.17 of the
JSE Listings Requirements and the pro forma financial effects of the
Proposed Specific Issue of Shares have been included.
The pro forma financial effects of the Proposed Acquisition and the
Proposed Specific Issue of Shares are presented for illustrative purposes
only and because of their nature may not give a fair reflection of the
Company`s financial position nor of the effect on future earnings after
the Proposed Acquisition and the Proposed Specific Issue of Shares.
Set out below are the unaudited pro forma financial effects of the
Proposed Acquisition and the Proposed Specific Issue of Shares, based on
the reviewed abridged results for the year ended 30 June 2011. The
directors of Ububele are responsible for the preparation of the unaudited
pro forma financial information.
Reviewed Unaudited Change Unaudited Change (%)
results pro forma (%) pro forma
before after after
acquisition acquisition acquisition
and (cents) and
specific specific
issue of issue of
shares shares
(cents) (cents)
Basic 1.25 1.38 10.40% 1.72 24.64%
earnings
per share
Basic 1.27 1.40 10.24% 1.74 24.29%
headline
earnings
per share
Net asset 73.81 57.36 (22.29%) 57.65 0.51%
value per
share
Net 7.13 (9.32) (230.72%) (8.55) 8.26%
tangible
asset
value per
share
Weighted 177 161 405 177 161 405 - 178 411 405 0.71%
average
number of
shares in
issue
Number of 177 167 822 177 167 822 - 178 417 822 0.71%
shares in
issue
Notes
1. The "Reviewed results before acquisition and specific issue of
shares" figures have been extracted from the reviewed results
of Ububele for the year ended 30 June 2011.
2. The basic earnings per share and basic headline earnings per
share figures in the "Unaudited pro forma after acquisition"
and "Unaudited pro forma after acquisition and specific issue
of shares" columns have been calculated on the basis that the
acquisition and the specific issue of shares was effected on 1
July 2010.
3. The net asset value per share and net tangible asset value per
share figures in the "Unaudited pro forma after acquisition"
and "Unaudited pro forma after acquisition and specific issue
of shares" columns have been calculated on the basis that the
acquisition and the specific issue of shares was effected on
30 June 2011.
4. A taxation rate of 28% is assumed.
5. The basic earnings per share and basic headline earnings per
share figures have been calculated based on the weighted
average number of shares in issue at 30 June 2011.
6. The net asset value per share and net tangible asset value per
share figures have been calculated based on the number of
shares in issue at 30 June 2011.
7. The "Pro forma adjustments for the acquisition" figures are
based on the audited financial results of Erintrade and R.T.
Chemicals for the year ended 30 June 2011.
8. Ububele acquired 49.9% of the equity interest of Erintrade and
R.T. Chemicals for R40 million.
9. The R40 million for the acquisition was financed by Land Bank,
at an interest rate of prime.
10. Transaction costs of R780 000 plus VAT for the acquisition and
specific issue of shares, to be settled in cash, were assumed.
11. Ububele issued 1 250 000 ordinary shares at 100 cents per share
to AIP, in terms of the issue of shares for cash. The directors
deemed the fair value to be 50c at the time of the issue. The
difference in the fair value of the shares to be issued and the
debt being extinguished resulted in a profit of R625 000 which
was taken directly to the statement of comprehensive income
12. All adjustments, except for transaction costs, are expected to
have a continuing effect.
4. UPDATE REGARDING THE CIRCULAR TO SHAREHOLDERS
Ububele is currently in the process of finalising the circular to
shareholders in respect of the Proposed Acquisition and the Proposed
Specific Issue of Shares ("the Circular") and it is anticipated that the
Circular will be posted to Ububele shareholders on or about Tuesday, 15
November 2011.
14 November 2011
Designated Adviser
PSG Capital
Date: 14/11/2011 16:16:02 Produced by the JSE SENS Department.
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