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COMPANY
Y2KTEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration No 1999/02149/06)
("Y2KTec" or "the company")
1.
THE DISPOSAL
Further to the cautionary announcement dated 17 February 2001, The Janus
Corporation (Pty) Ltd is authorised to announce that Y2KTec has entered into
an agreement ("the disposal agreement") with Nomalanga Trading Enterprises
CC ("the purchaser") (the sole shareholder of whom is Mr I Adams), in terms
of which Y2KTec proposes to dispose of its entire share holding in its
wholly-owned operating subsidiary company, Y2KTec (SA) (Pty) Ltd on the
terms and conditions as set out below.
2.
RATIONALE FOR THE DISPOSAL
In 1999 it was projected that the Labour Rites programme and the Windows
version of the Payslyp package were to be released during that year with
sales of both programmes expected to make a positive impact on the financial
results for the year ending 28 February 2001. The development of these two
programmes has not been completed. The company has accordingly not been able
to meet its profit objectives, resulting in the dissipation of its available
capital.
The Johannesburg office was closed with effect from 1 March 2001 resulting
in a substantial savings in monthly cash outflow. The continuation of the
business of the subsidiary company through its Cape Town office is totally
dependent on members of management.
The inability to achieve the 1999 objectives has left the subsidiary company
vulnerable to resignations from key personnel without whom the subsidiary
company cannot continue to exist. The remaining directors are of the opinion
that a disposal of the subsidiary to the purchaser is the only way of
ensuring value for the company.
3.
TERMS AND CONDITIONS OF THE DISPOSAL
3.1
The purchaser, who has concluded a satisfactory due diligence investigation,
will acquire the ownership and risk in and benefit attaching to the sale
shares with effect from 1 March 2000.
3.2
Possession and effective control of the sale shares will be acquired by the
purchaser on the first business day after the date on which the suspensive
conditions are met.
3.3
The consideration payable by the purchaser to Y2KTec for the sale shares is
the sum of R500 000 (five hundred thousand rand) which will be payable in
cash in three equal instalments on the 30th day of August, September and
October 2001 respectively.
4.
FINANCIAL EFFECTS OF THE DISPOSAL ON Y2KTec SHAREHOLDERS
4.1
Had the transaction been effective at the beginning of Y2KTec's last
financial period, i.e. 1 March 2000, the effect on the Y2KTec headline
earnings and net asset value per share as at 1 March 2000 would have been as
follows:
Y2Ktec Y2Ktec
Before the disposal After the disposal
(cents) (cents) Change
(%)
Loss per share (5.0) 0,2 104,0
Headline loss per share (1.6) 0,2 112,5
Net asset value per share 21.1 2.9 (86.3)
Net tangible asset value
per share 3.8 2.9 (23.7)
4.2
The financial effects as calculated have been based on the assumptions that
:
the remaining assets of about R1,2 million would have been invested to yield
10% per annum after tax; and
the share incentive scheme loan has been written off along with intangibles
to determine net tangible asset value per share.
5.
SUSPENSIVE CONDITIONS
5.1
The following suspensive conditions are to be met:
All necessary regulatory approvals have been obtained including the
approvals of the JSE Securities Exchange (SA) ("the JSE"); and
The holding of a general meeting of Y2KTec shareholders (in terms of Section
228 of The Companies Act) to approve the passing of the requisite
resolutions for the implementation of the disposal.
6.
DOCUMENTATION
A circular giving further details of the disposal and containing a notice
convening a general meeting of Y2KTec shareholders to approve and implement
the disposal will, subject to JSE approval, be posted Y2KTec shareholders
within 28 days of this notice.
7.
CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS
The following directors have resigned from the board of directors:
The two executive directors, Messrs Black and Roth, with effect from 1 July
2000 and 24 January 2001 respectively;
Kritzinger and Paterson-Jones with effect from 2 February 2001 and 2 January
2001 respectively.
The following directors have been appointed to the board of directors
joining Dr GS Mahlati:
Ms Nadia Solomon and Ms Afifa Adams with effect from 2 February 2001 and 9
February 2001 respectively.
8.
FUTURE PLANS FOR THE COMPANY
Following the implementation of the disposal of the subsidiary, Y2KTec will
effectively become a cash shell. Shareholders will be advised in due course
about future plans for the company.
Johannesburg
15 May 2001
Sponsor
The Janus Corporation (Pty) Ltd
Corporate Financial Adviser
General Guarantee & Trust Company
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