| Thu 28 Feb 2013, 17:15 | | HUDACO INDUSTRIES LIMITED - Changes in BEE financing arrangements |
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HDC 201302280088A
Changes in BEE financing arrangements
HUDACO INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1985/004617/06)
Share code: HDC & ISIN: ZAE000003273
(“Hudaco” or “the company”)
CHANGES IN BEE FINANCING ARRANGEMENTS
In a business update released on 12 February 2013, the company advised that a communication was
received from SARS regarding Hudaco’s BEE transaction. The communication referred to a number
of other arrangements that were apparently connected to the BEE transaction, ascertained by SARS
from third parties and about which Hudaco had no previous knowledge.
In the light of this information, changes in tax legislation and the fact that SARS had issued revised
assessments to Barbara Road Investments Proprietary Limited (“BRI”), a subsidiary of Hudaco, BRI
has exercised its right to request Cadiz to gross up the dividend on the Cadiz preference shares held
by BRI (“the preference shares”). In response thereto, Cadiz has exercised its right to redeem the
preference shares instead of grossing up the preference dividend. As a result of the redemption of
the preference shares, Morgan Stanley, the existing funder of the BEE transaction, exercised its
option to put to BRI the debenture issued by Hudaco Trading Proprietary Limited (“Hudaco
Trading”).
The effect of the restructuring described above, which is effective from 28 February 2013, is that the
BEE funding arrangements that were intended to be financed externally until August 2017 are now
financed internally by the Hudaco group.
As a result of the restructuring:
the group statement of financial position will no longer reflect a preference share investment of
R2 181m or a subordinated debenture liability of R2 181m;
the group statement of comprehensive income will no longer reflect preference dividends
received of R201m per annum or debenture interest paid of R234m per annum;
basic earnings and headline earnings will decrease by approximately R33m or 103 cents per
share per annum;
for the financial year ending 30 November 2013, the effect on basic and headline earnings per
share is expected to be 77 cents; and
the BEE shareholders will continue to hold their shares in Hudaco Trading and the BEE
credentials of all entities in the Hudaco group will remain intact.
Shareholders are advised that the above information has not been reviewed or reported on by the
company’s auditors.
Johannesburg
28 February 2013
Sponsor
Nedbank Capital
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