| Wed 2 May 2012, 7:05 | | BDM - Buildmax Limited - Proposed Consolidation of Share Capital |
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BDM
BDM
BDM - Buildmax Limited - Proposed Consolidation of Share Capital
BUILDMAX LIMITED
Incorporated in the Republic of South Africa
Registration No. 1995/012209/06)
Share Code: BDM
ISIN Code: ZAE000011250
("Buildmax" or "the Group" or "the Company")
PROPOSED CONSOLIDATION OF SHARE CAPITAL
1. INTRODUCTION
The board of directors of Buildmax ("the Board") wishes to advise
shareholders of Buildmax ("Shareholders") of a proposed restructuring of
the authorised and issued share capital of the Company by the consolidation
of every 19 ordinary shares ("Shares") currently held in Buildmax with a
par value of 1 (one) cents each into 1 (one) Share with a par value of 19
(nineteen) cents each ("the Share Consolidation"). As a result of the Share
Consolidation Buildmax will have 181,300,839 Shares in issue and
315,789,474 authorised Shares.
The proposed Share Consolidation follows on the successful disposal of all
discontinued operations (as announced on SENS on 2 February 2012, 17
February 2012 and 9 March 2012), which has enabled management to focus all
their attention on Buildmax`s growth ambitions by leveraging the Group`s
systems, assets and intellectual capital within the Mining Services and
Quarries Divisions to grow the Company and transform the Group into an
opencast mining supply chain services and bulk civils earth works company.
The Share Consolidation is in line with the Board`s strategy of
restructuring the Company in order to deliver adequate returns to
Buildmax`s shareholders.
2. RATIONALE FOR THE SHARE CONSOLIDATION
The Board proposes the Share Consolidation for the following reasons:
2.1 It is expected that by consolidating the number of Shares, there will
be a narrowing of the spread between the bid-to-buy price and the
offer-to-sell price, resulting in a more stable market capitalisation
of the Company. It is the opinion of the Board that shares that trade
below R1.00 on the JSE Limited have a much higher spread between the
bid-to-buy price and the offer-to-sell price, which can result in
significant movements in the share price on small volumes traded.
2.2 The instability in the market capitalisation of the Company, as
explained in point 2.1 above, ultimately affects shareholder value,
which, in turn, may discourage potential investors. As a result, a
Share Consolidation will not only provide additional confidence to
existing shareholders, but also increase the attractiveness of
Buildmax to other investors.
3. SUSPENSIVE CONDITIONS
The Share Consolidation is subject to, inter alia, Shareholder and JSE
Limited approval.
4. CIRCULAR TO SHAREHOLDERS
A circular to Shareholders, setting out, inter alia, the proposed salient
dates and times of the Share Consolidation and containing, inter alia, a
notice of general meeting, will be posted to Shareholders within the next
two months ("the Circular") and a further announcements will be released on
SENS and published in the press when the Circular is posted.
Benoni
2 May 2012
Sponsor
QuestCo (Pty) Limited
Date: 02/05/2012 07:05:04 Produced by the JSE SENS Department.
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